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Friday, March 5, 2010

General Commentary: The Bull in the China Shop

Recently, a prominent Chinese dealer published an extensive buy list for stamps of the P.R.C., with buy prices which significantly increased the wholesale values of key P.R.C. stamps. The most dramatic increases seem to be for many of the better souvenir sheets and for issues of the Cultural Revolution. The question is: does this represent a pivotal event for the P.R.C. market, and perhaps for the global stamp market as a whole, comparable in its implications for the stamp market to the effect of the failure of Lehman Brothers on the stock market (except, of course, that the new buy prices represent a positive development rather than a negative one)?

It's quite possible that the buy list was simply an attempt to manipulate prices upward, so as to increase the value of a dealer's inventory. But does this even matter? The Chinese stamp market has been hot for a while now, and it would be surprising if price manipulation was not utilized as a catalyst every now and then.

It's also possible that the new buy list is evidence of a bubble.

"The Entire Nation is Red" Design Error (Scott #999A)

To attempt to get a better idea of what is going on in the market for better P.R.C., I've done a little research, comparing buy prices of a few key items over the last 6 years. These quotations are approximate representations of wholesale value, and not by any means comprehensive, in that they do not take into account all P.R.C. buy lists for any given period.

(Prices are for VF NH)

1958 Kuan Han-ching s/s (Scott #357a):

2004: $ 65.00
2006: $ 75.00
2007: $ 85.00
2008: $ 130.00
March, 2010: $ 215.00 ; April, 2010: $ 340.00

1961 Table Tennis s/s (Scott #566a):

2004: $ 180.00
2206: $ 225.00
2007: $ 225.00
2008: $ 275.00
March, 2010: $ 800.00; April,2010: $ 1,180.00

1962 Mei Lan-fang s/s (Scott #628):

2004: $ 1,800.00
2006: $ 2,500.00
2007: $ 3,000.00
March, 2010: $ 10,000.00; April, 2010: $ 11,000.00

1964 Peonies s/s (Scott #782):

2004: $ 400.00
2006: $ 500.00
2007: $ 500.00
March, 2010: $ 2,000.00; April, 2010: $ 3,650.00

1967 Thoughts of Chairman Mao- unfolded strip of 5 (Scott #948a):

2004: $ 325.00
2006: $ 750.00
2007: $ 750.00
March, 2010: $ 2,500.00; April, 2010: $ 3,300.00

1967-68 Poems by Chairman Mao (Scott #967-80):

2004: $ 475.00
2006: $ 800.00
2007: $ 800.00
2008: $ 1,300.00
March, 2010: $ 2,200.00; April, 2010: $ 3,000.00

1968: "The Entire Nation is Red" (Scott #999A):

2004: $ 8,000.00
2006: $ 10,000.00
2007: $ 10,000.00
March, 2010: $ $ 60,000.00; April, 2010: $ 75,000.00

1978 Science Conference s/s (Scott #1383a):

2004: $ 140.00
2006: $ 150.00
2007: $ 160.00
March, 2010: $ 400.00; April, 2010: $ 490.00

1979 Study Science s/s (Scott #1518):

2004: $ 300.00
2006: $ 510.00
March, 2010: $ 1,600.00; April, 2010: $ 1,950.00

1980 Year of the Monkey (Scott #1586):

2004: $ 100.00
2006: $ 215.00
2007: $ 200.00
March, 2010: $ 800.00; April, 2010: $ 975.00

The gains are astounding, to the extent that they defy analysis. In certain respects, the situation certainly looks like a bubble. As the expression goes: "If it walks like a duck and quacks like a duck, then it probably is a duck." The only problem is that in this case, we're dealing with Peking Duck, a bionic "superduck" powered by tens of millions of Chinese collectors.

On the one hand, I can not advise buying many of the dramatically revalued items at their new stratospheric levels. On the other, I've been bullish about the Chinese stamp market for decades, and will not bet against it. In the long run, even the items which are currently being hysterically bid upward may turn out to be good investments. My recommendation is to wait until at least some of the dust has cleared, and the shock has at least partly worn off, and then target better items which have not been as hyped, and which haven't experienced such rapid increases in value. They represent safer bets, and their day will come.


  1. One thing to remember about cultural revolution issues is that any stamp picturing Lin Piao together with Mao Tse-tung goes for about 4 to 5 (or more, now!) times other stamps in the set. The 1967 "Long Live Chairman Mao" pictorial set of eight has two such stamps and there are also two stamps ('67 and '68) featuring Lin Piao's calligraphy which probably carry a premium too.

    When I was in China (1990-91) I found that the 1967 Lin Piao stamps were virtually unavailable and that Lin's face was often defaced with ballpoint pen or scratched out on others. (Likewise, books with Lin's picture or works usually had the offending pages torn out). This was of course because of Lin's disgrace after an attempted 1971 coup, when it became dangerous to possess anything to do with Lin Piao.

    For the 1967 set of eight, back then I paid RMB15-25 for a good postally-used stamp from the set but RMB70-120 for the only three copies of the Lin stamps I was able to obtain. These must be even more prized by Chinese collectors today! Does Scott make a distinction?

  2. Kreditanstalt-
    I checked the two items in my Scott, and I didn't see a major distinction in cat. values, although it must be emphasized that Scott often makes errors when it comes to valuing stamps. I think that the boom in PRC stamps, especially those of the Cultural Revolution, is unprecedented in scale. Certainly I haven't seen anything like it in my over three decades as a stamp collector and dealer, and I've witnessed many stamp market booms and bubbles.