Tuesday, April 5, 2011
As a stamp dealer, I'm frequently contacted by collectors who have large accumulations of mint U.S. stamps issued over the last 40 to 70 years. As most experienced U.S. collectors know, the vast majority of these stamps are common, and accumulations are often sold at a discount to face value at stamp auctions. Typically, stamp dealers offer 60% - 70% of face value for such stamps, and then either use them as postage, or try to resell them at 80%-90% of face. Using the stamps as postage can present an interesting challenge, at it can be difficult to fit enough 3c or 4c stamps on an envelope to make up the first class rate.
Over a very long period of time, there is a attrition of supply of these stamps, as collectors and dealers use them up as postage. Every 15 or 20 years, a few of the earliest stamps that were formerly considered discount postage take on a slight premium. This has begun to happen for some issues of the late '30s and early '40s, especially if they are in sheet or plate block form.
I do not recommend buying huge accumulations of U.S. discount postage and then waiting decades for the stamps to increase in value. However, if one is purchasing an accumulation to either re-sell or use as postage, some consideration should be given as to which are sold or used first, and which are held back. Clearly, a slight premium should be assigned to plate blocks of 4 of the mid-'60s and earlier -those issued before the Postal Service ruined the plate block market by producing sheets with multiple plate numbers. The same holds true for plate number strips and line pairs of coil issues.
Another factor to consider when determining whether to favor certain of these stamps is topical interest. Value appreciation can be significantly accelerated by a surge in demand for a particular topic. Two examples of common U.S. mint stamps acquiring significant premiums are the 1938 3c Baseball Centennial stamp (Scott #855; 81 million+ issued; Scott '11 CV as unused = $1.75 ) and the 1942 5c Chinese Resistance Stamp (Scott #906; 21 million+ issued; Scott '11 CV as unused = $1.40 ). #855, and many more recent U.S. Baseball issues, jumped in value in the '80s during the boom in Baseball card and memorabilia collecting. #906 has been pushed up due to its appeal as a Chinese history topical, as supplies of the stamp have begun to be sucked up by the white-hot stamp market in the People's Republic. Both of these stamps were long considered "wallpaper" - indistinguishable from all of the other underperforming issues produced in the tens and hundreds of millions by the Postal Service, and glutting the market for many decades. Even individual organizations can deplete the supplies of a particular stamp and drive up its price. In 1987, a rather dull 22c stamp was issued honoring Certified Public Accountants (Scott #2361; 163 million+ issued; CV as unused = $1.00). Several years later, a national association of CPAs decided to do a mass mailing using the stamp, and purchased a significant number of sheets by publishing buy ads in stamp periodicals, thereby making an otherwise boring stamp a "hot item."
Speculating on extremely inexpensive stamps is problematic, because it's usually necessary to locate, purchase, and store thousands or tens of thousands of each in order to make the project worthwhile. If one does accumulate such a hoard, the speculator may then increase the likelihood of making a profit by advertising a buy price for the stamp, thereby hopefully pumping up the demand for it. The upside to such an project is that, in the case of modern U.S. mint, there is very little risk of loss if it is purchased for face value or less. Assuming that one manages to find enough of a supply of a particular issue, the keys to success are the ability to project which stamps will increase in value due to topical demand, and also making a somewhat accurate educated guess as to how many of the stamps remain. I estimate that for most run-of-the-mill U.S. issues, about 1% -2% of the initial printing quantity remains after 30 years. Supplies of such stamps continue to diminish for as long as they are not worth saving. However , a greater proportion may survive if an issue is of more interest than normal. Such "special interest" items include souvenir sheets, certain se-tenant issues, and topicals popular at the time of issuance.
There are many inexpensive U.S. stamps issued over the last 70 years which might rise due to their topical appeal. Some that stand out include the 1961 4c and 8c Mahatma Gandhi Issue (Scott # 1174-75; 112 million + and 41 million+ issued; Scott '11 CV as unused = $.20 and $.20 ), the 1961 4c Sun Yat-sen Issue (Scott #1188; 110 million+ issued; Scott '11 CV as unused =$.20 ), and the 1994 $1.19 World Cup Soccer Souvenir sheet (Scott #2837; 60 million issued; Scott '11 CV as unused= $ 4.50). The Soccer Souvenir Sheet, while not strictly discount postage, is a minor premium item, and is frequently be found in discount postage accumulations. Those who like to think outside the box might consider the 1947 3c Utah Centennial Issue (Scott #950; 131 million+ issued; CV as unused= $ .20 ). This stamp qualifies as the first and only Mormon Topical. Currently, there are over 12.5 million Mormons in the world, and their number is growing by slightly under 3% per year. It should be noted that 20c is Scott's "minimum catalogue value"- the lowest catalogue value which Scott assigns to a stamp in order to take account of the seller's labor costs. In actuality, the four 20c CV stamps described above are considered discount postage.
In summary, supplies of most mint U.S. stamps issued over the past 70 years are abundant, and it is likely that they will remain very inexpensive for many decades more. Our grandchildren's grandchildren may still be using many of them as postage. However, the stamps that have growing topical appeal will tend to increase in value the fastest, and may be set aside (or used last), or even considered for accumulation by those who with sufficient patience and persistence to hoard them.