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Stuck On Stamps

The Thrill of the Chase Keeps Collectors Stuck on Stamps
Edward Kiersh
From the Print Edition:
James Woods, May/Jun 97

The "Ugly Duckling" was about to be auctioned off, and as an overflow crowd streamed into a Geneva gallery last November, a palpable sense of tension filled the hall.

Collectors had long been fascinated by this rather ordinary looking "work of art," and while knowing it was one of the world's great rarities, they joked about its bland, partially obliterated design. While expecting it to sell for more than $1 million, they never imagined the Tre Skilling Yellow, a faded 1855 stamp from Sweden with a big, black cancellation mark, would suddenly make history.

But once the crowd settled into their seats, and the bidding leaped from 900,000 to 1.2 million Swiss francs in a matter of seconds, serious stamp collectors immediately had reason to feel bullish.

Their rare and most prized holdings had risen steadily in value these past five years, appreciating about 14 percent to 20 percent annually, according to market indexes and auctioneers. Now, though, as the bidding for the Yellow continued to escalate, collectors' minds flashed back to the early 1980s, when speculators and syndicates were paying unheard of sums for investment-quality pieces such as "Graf Zeppelins" or the British Guiana one-cent magenta, and again fantasized about all hell breaking loose in the marketplace.

"1.3," signaled a prospective buyer from the back of the gallery.

"1.4," quickly countered another bidder. * Now reduced to a duel between two agents for anonymous collectors, the bidding war momentarily stopped. In fear of influencing the sale, auctioneer David Feldman, who's also an internationally renowned "collection builder," tried to disguise his surprise that the bids had moved into record-setting territory for a single stamp. Yet once the battle resumed, a few gasps were heard, as the two bidders finally drove the Yellow's price to 2.875 million francs ($2.3 million, or $1 million more than its previous sales tag in 1990)--and in effect gave all investors in rare, investment-quality stamps a resounding boost of confidence.

"When a stamp like the Tre Skilling realizes such a high price, it gives a lot of confidence to collectors holding rarities, even $10,000 stamps, and also to people thinking about investing," says Feldman, who recently sold a group of 1847 Mauritius stamps for $5 million. "Now collectors are spending more money on selective pieces. There's a new bullishness in stamps these days."

The "thrill of the hunt" is one reason for this fascination with stamps. Finding rare items at auctions or networking with dealers isn't exactly the stuff of Indiana Jones. Yet, according to one collector, "It's a macho thing. Landing a rare piece lets me say to the world, 'I've got it and the other guy doesn't.'"

According to the American Philatelic Society, about 50,000 "serious" collectors make up the core of an estimated 4.4 million hobbyist stamp collectors in the United States.

Along with the chase, which pits enthusiasts against the laws of supply and demand, collectors know that filling in album spaces is potentially profitable. Now, American baby boomers and new legions of collectors in Europe and the Far East are driving prices up from 1991 lows, when the stamp market stumbled. A prized block of four U.S. #2 stamps which had then dropped in value to $50,000, is now worth more than $100,000, as stamp prices have rebounded and generally kept pace with the Standard & Poor's 500-stock index, which has risen an average of 14.3 percent annually over the past five years.

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