Stamp collecting is a hobby! But is it an investment?
Yes, it can be a profitable hobby. But the cost structure of
the stamp business does not lend to the rapid run-up in value of a
philatelic investment. Consider that at auction the seller generally pays 15%
of the hammer price to the auctioneer and the buyer pays an additional 10% over
the closing bid. Thus, purchasing a stamp or cover at auction puts one back
25%, requiring a healthy run-up in the stamp market to get back to even.
This evasive nature of profits from collecting often leads
the unwary down a path of folly. Take the example of the ‘bargain’ found on
eBay for a small percentage of the Scott Catalog Value (SCV). Close scrutiny of
the ‘bargain’ too often reveals ‘fakes’. Unlike forgeries, fakes begin as
genuine stamps that are then altered to increase value.
Common methods of producing fakes are regumming or
perfing/reperfing. There are also the washed cancels producing seeming mint
stamps. Regum the stamp and the faker has a Mint Never Hinged stamp. Poorly
centered? The fakers can reperf to
produce a better-centered stamp, or eliminate a straight edge to increase the
value.
The buyer must also be aware of the valuable
Washington/Franklin coils that began life as imperforates. A simple addition of
perforations and the common imperforate pair becomes a valuable coil pair.
According to 1847USA (a terrific website for the study of U.S. Classic
Stamps), the Scott 388 is considered to be one of the most commonly faked
stamps in U.S. philately. With a catalog value for the MNH pair of $7,500 and
higher still for the guideline pair, this valuable ‘investment stamp’ may be
produced by adding perforations to a pair of the imperforate #384 valued by
Scott at $22.00.
Pictured above is a Scott #493 line pair valued by Scott at $230.00, with a Certificate shown at the bottom of this page. Without a certificate you could be looking at an reperf of imperf #483 valued at $47.50 if it is truly MNH and not also regummed
We have all seen an attractive stamp with a thin? A faker
can use this stamp as an opportunity to regum, thus hiding the thin, and
producing a MNH valuation.
But all is not lost. The collector of classics can use a few
common sense rules to insure their collection includes genuine stamps of value.
First, know your source. Those of us who are members of the
American Philatelic Society (APS) are pledged to uphold a standard of integrity
that precludes knowingly dealing in fakes and altered stamps. But even the best
of us could potentially pass along a fake or a forgery out of ignorance.
So the second rule is to have your higher value ‘investment
stamps’ expertized. I recommend the Professional Stamp Experts (PSE), American
Philatelic Society’s American Philatelic Expertizing Service (APEX), and The
Philatelic Foundation. There are also specialty groups for the stamps of
particular countries and eras.
What these organizations have that the rest of us do not
have, in addition to a committee of experts who have collectively seen it all,
are tools we would all love to have for measuring and magnifying. But probably
just as important are references of the genuine stamps, discovered fakes and
forgeries.
It is also worth noting that a dealer or knowledgeable
collector will not buy at a reasonable price an ‘investment grade’ stamp that
does not carry a certificate from a reputable expertizer.
So, enjoying stamp collecting as a hobby and with some
degree of caution and savvy you may over time realize some maintenance of value
from the eventual sale of your collection.
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