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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.

ussm493lpThe 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 to1847USA (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.

493cert_smSo the second rule is to have your higher value ‘investment stamps’ expertized. I recommend the Professional Stamp Experts (PSE), American Philatelic Society’s AmericanPhilatelic 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.