In history, few things repeat themselves as frequently as
financial crises in Argentina. They’ve
had a dozen since Juan Peron took power in the 1930’s and established a
political movement that has dominated that country for most years since. At present, the country faces another return
to power by the Peronist party which is having a significant impact on the
remittance of funds into and out of the country. The country has also, again, defaulted on a
debt payment. This time it involves debt
issued to refund a previous default. The
Argentine people face having their savings frozen into devaluations and massive
inflation. In short, the need for an
underground currency is once again on the rise.
So, what does this mean for collectors of that country’s stamps and for
investors looking for stamps with investment potential?
As we have pointed out in the analysis of similar situations
where the political and financial outlook of a country deteriorates, stamps
take on a heightened importance since they are one of few safe-harbor assets
which are locally available, portable and not subject to government actions by
fiat. Let’s examine how well Argentine
stamps have done historically. StampFinder®
has been tracking and evaluating stamps from an investment perspective since
1995. For Argentina, we track some 568
stamps of higher value. For the last 25
years the mint issues appreciated 137% and the used 119%. Also, 86% showed increases versus 14% with
zero or small decreases. These results
are attractive in a variety of ways. For
investors seeking a safe-haven asset, these results of 5.48% and 4.76% appreciation
per year are very attractive. For
collectors who are generally missing the higher value items, now is the time to
acquire such stamps because dealers rely on the Scott Catalogue for guidance on
pricing and that catalogue appears to not have done a general review of these
stamps in a decade. Such a review will boost
prices to reflect increasing demand. The
increased demand will come from Argentinians who will be buying up these stamps
and using them to preserve their wealth.
The soft spot in demand will be in the modern lower priced
Argentine material since residents tend to buy at the post office thinking they
will be able to preserve the value of their savings in this way. It never works, it only creates a glut of
material that can never appreciate; witness the stamps of Germany from the
early 1920s and Brazil from the 1950s.
Even United States stamps issued since the 1940’s sell for less than
their face value.
Below is a selection of Argentine stamps priced below $1000
which have been top performers:
|
Scott # |
Type (M)int (U)sed |
25Yr % Appreciation |
|
7c |
M |
1300% |
|
O6a |
M |
1233% |
|
53a |
M |
566% |
|
54b |
M |
566% |
|
49b |
M |
515% |
|
62a |
M |
445% |
|
66a |
M |
400% |
|
59c |
M |
372% |
|
49c |
M |
354% |
|
67 |
M |
338% |
|
51c |
U |
550% |
|
96b |
U |
400% |
|
O9a |
U |
270% |
|
O23a |
U |
253% |
|
7a |
U |
233% |
|
O2a |
U |
220% |
|
41c |
U |
214% |
|
9 |
U |
206% |
|
O16a |
U |
196% |
|
57a |
U |
170% |