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Thursday, November 28, 2013

Stamp Investment Tip: French Southern and Antarctic Territories 1968 WHO (Scott #31)

Four countries claim territory in the Antarctic and issue stamps for their territories. They are Australia (Australian Antarctic Territory), Great Britain (British Antarctic Territory), New Zealand (the Ross Dependency), and France (the French Southern and Antarctic Territories). Of these, the French territory, also known as French Antarctic and abbreviated as F.S.A.T. or T.A.A.F., is of most interest to philatelists, because most of the F.S.A.T. stamps were issued in modest quantities and many are beautifully engraved. Most stamps issued for the various Antarctic territories are sold to collectors, as only a few hundred scientists reside in research facilities in the Antarctic.

In 1968, the F.S.A.T. issued a set of a stamp honoring the World Health Organization (Scott #31).39,000 were issued, and Scott '14 prices it unused at $65.- .

Demand for stamps of the French Antarctic is strong in France and among collectors of French Colonies/Area, and this has obvious topical appeal as both a U.N. and Medicine Topical.

I continue to like the U.N. as a topic, long-term. The market for U.N.-related topicals should grow over the very long haul as institutions of world government develop in order to take on serious (and possibly existential) problems which can only be coped with globally. Despite the present inadequacy, corruption, and ineffectiveness of the U.N., I view its reform and gradual strengthening as a gradual but irresistible trend.

The Stamp Auction Bidders and Consignors Union (SABACU) is a forum for discussing stamp auctions, and represents the interests of stamp auction bidders and consignors in their dealings with stamp auctioneers. All stamp collectors and dealers are welcome to join. 

Saturday, November 23, 2013

General Commentary - the 2013 Curtiss Jenny Error Souvenir Sheet Lottery

  About 3 1/2 years ago, I suggested in a StampSelector article that the financially beleaguered Postal Service might raise funds by instituting a postal lottery, in which lucky collectors could win stamps issued in very limited quantities. Admittedly, the suggestion was not a serious one, because although the the USPS has made many idiotic mistakes in the last five decades, it's never promoted gambling or sunk to the level of a carnival tout. As it happens, it's taken my advice, at least generally, with its recent  issuance of the $12 Inverted Jenny Souvenir Sheets, each of which contains six $2 stamps.

The history of the original error (Scott #C3a) is well known to many U.S. collectors. In 1918, in a rush to celebrate the first airmail flight, the Post Office Department issued the 24 cent Curtiss Jenny stamp. Because the design required two colors, sheets were placed on the printing press twice - first to apply red ink and a second time to apply blue ink. This process was prone to human error, as it allowed for the possibility that sheets might be inserted upside down, resulting in inverted center error stamps. A Washington, D.C. post office clerk who had never seen an airplane sold a sheet of 100 stamps mistakenly showing the biplane upside down to collector William T. Robey. Robey sold the legendary sheet of “Inverted Jennies” for $15,000 to dealer Eugene Klein, who then sold it to famed collector Colonel E.H.R. Green for $20,000. Colonel Green broke  up the sheet and sold most of it over the years, keeping select examples, including one which he encased in a locket which he gave to his wife, Mabel. When offered, these stamps now sell for hundreds of thousands of dollars (up to $1 million, depending upon condition).

Normal s/s
The USPS recently issued 2.2 million of the $12 Inverted Jenny souvenir sheets, but this figure also includes 100 sheets with the biplane rightside-up -  intentional "design errors" which correct the original design error of 1918. Actually, it is probably more accurate to call these items varieties. The sheets are being sold in shrink-wrapped packages, thereby rendering it impossible for buyers to see the design of each sheet.  In effect, the USPS has instituted a lottery, motivating collectors to buy quantities of the $12 souvenir sheets in hopes of finding those with valuable "biplane rightside-up" varieties.

The intentional issuance of an inverted center errors is not unprecedented. There are a number of developing countries (most notably Liberia) for which such errors are relatively common. In many cases such stamps were created by corrupt postal officials hoping to profit from sales to collectors.The editors of the Scott Catalog  have stated that the new variety will not receive a major or minor Scott catalog number, though it will be described in a footnote accompanying the souvenir sheet's listing. As an intentionally created scarce variety, it violates Clause 6 of Scott's listing policy.

Variety ("Error") s/s

Each purchase of one of the $12 sheets basically gives the buyer about a 1 in 22,000 chance of purchasing a variety sheet. For those collectors, speculators, and dealers who might wish to enter this USPS lottery by buying large quantities of the sheets in hopes of acquiring the varieties, the key question to consider is whether the (currently unknown) market value of a variety sheet will more offset the probable loss incurred when unloading all of the normal ones.

A prudent stamp dealer or speculator would consider the following before playing this game: 22,000 sheets will cost him $264,000.- (plus labor and expenses) and will probably yield him at least one variety sheet. Unless he does mass mailings, he will have to sell most of the rest of the sheets as discount postage, for around 70% - 75% of face value ($184,800 to $198,000.-, if all are sold at a discount). In other words, in order for this individual to break even on his gamble, he will have to be able to sell his Rightside-up variety sheet for at least $66,000.- (or $79,200-. if he unloaded the discount postage for 70%).  Not bloody likely, in my opinion.

Attempting to predict the probable long-term market value for such an item is an endeavor fraught with difficulty (and peril if one gambles on one's guess). The quantities issued are the same for both the original 1918 Inverted Centers and the 2013 "Biplane Rightside-up" variety souvenir sheets  - 100 of each exist. Much of the demand for the original Inverted Jenny stamps is based on their fame rather than scarcity - there are many stamps for which fewer than 100 examples exist (including inverted center errors) which sell for far less than C3a. In fact, there are many such stamps which sell for 1% or less of what a nice C3a will realize at auction. As for the variety souvenir sheets: based upon the values of comparably scarce legitimate U.S. errors, one might reasonably estimate that they will sell for a few thousand dollars each once the hype dies down. However, there are times when reason has little to do with the stamp market.

Those interested in becoming part of an international community of stamp collectors, dealers, and investors are encouraged to join the "Stampselectors" group at Facebook. The group hosts lively discussions concerning stamp investment and practical aspects of collecting, and provides a useful venue for those who wish to buy, sell, or trade stamps.   

Thursday, November 21, 2013

Stamp Investment Tip: Costa Rica 1960 Soccer (Scott #C283-88, C289)

  In 1960, Costa Rica issued a set of six stamps and a souvenir sheet honoring the 3rd Pan-American Soccer Championship (Scott #C283-88, C289). 25,000  of each were issued, and Scott '13 prices them unused at $4.90 and $ 6.50, respectively.

Aside from being yet another grossly undervalued Latin American issue, the set doubles as a Sports/Soccer Topical. Soccer is the most popular sport in the world, with a following of billions of fanatical fans, many of whom live in emerging market nations. Philatelic investors who focus on better Soccer topicals will certainly get more out of it than a kick in the shins.

A small nation of 4 1/2 million people, Costa Rica is unique as the only Latin American country to have escaped the plague of repressive dictatorships and oligarchies endemic to the region. Costa Rica has generally enjoyed greater peace and more consistent political stability than many of its fellow Latin American nations. The government offers generous tax exemptions to those investing in the country,and in recent times electronics, pharmaceuticals, financial outsourcing, software development, and ecotourism have become the prime industries in Costa Rica's economy. High levels of education among its residents make the country an attractive investing location. Annual GDP growth has averaged 3.4% over the last 5 years.

 "The Stamp Specialist" blog features my buy prices for stamps which I am interested in purchasing. I've posted a buy list for Costa Rica. Viewing dealers' buy lists every now and then is an excellent way to keep up with the vagaries of the stamp market.

Sunday, November 17, 2013

Stamp Investment Tip: Iceland 1930 Parliament Millenary Officials (Scott #O53-67)

   In 1930, Iceland issued a Parliament Millenary Officials set (O53-67), by overprinting 4,000 of its regular Parliament Millenary set (Scott #152-66). These commemorated the thousandth year of Iceland's "Althing", the oldest parliament in the world. Only 4,000 of the Official set were issued, and Scott '14 prices the unused set at $ 1,040.00 .

   It's reasonable to question whether it's prudent to invest in stamps issued by a country in which the economy is in a shambles, and I offer two reasons for doing so. Firstly, I believe that Iceland will eventually recover from its current economic problems, and as I commented in an earlier article, often the best time to invest is when there's "blood in the streets." Secondly, there are many stamp collectors who focus on Scandinavia as a region, so the demand for stamps of Iceland is broad- based.

   While I usually recommend obtaining expertization when purchasing scarce overprinted issues, it's not necessary in this case, because the basic set is also valuable.

A nation of  about 320,000, Iceland has been hard-hit by the European Debt Crisis. Prior to the recent economic contraction, Iceland was the seventh most productive country in the world per capita (US $54,858), and the fifth most productive by GDP at purchasing power parity ($40,112). Except for its abundant hydroelectric and geothermal power, Iceland lacks natural resources; historically its economy depended heavily on fishing, which still provides 40% of export earnings and employs 7% of the work force. It was hit especially hard by the ongoing late-2000s recession, because of the failure of its banking system and a subsequent economic crisis. Before the crash of the country's three largest banks,  their combined debt exceeded by approximately six times the nation's gross domestic product of €14 billion ($19 billion). Since then,  the government has instituted some financial reforms, and by June 2012, has managed to repay about half of the debt. Average annual GDP growth has been flat over the last 5 years, but seems to be recovering.

Those interested in learning about investing in stamps should read the Guide to Philatelic Investing ($5), available on Kindle and easily accessible from any computer.

Thursday, November 14, 2013

Stamp Investment Tip: Mongolia 1926-29 Yin Yang/Symbols (Scott #32-44)

 From 1926-29, Mongolia issued a set of thirteen stamps picturing the Taoist Yin Yang and other symbols (Scott #32-44). Only 5,000 sets were issued, and Scott '14 prices the unused set at $283.-.

I consider the scarcer issues of Mongolia to be conservative long-term plays, because it is unlikely that there will be an appreciable increase in the number of stamp collectors in Mongolia in the near future. Currently, most of the demand for Mongolian stamps is based on the interest of specialists for the earliest issues, and topicalists for the later ones. Over the next few decades, however, I feel that the number of stamp collectors within Mongolia itself will increase significantly.

With about 2.6 million people, Mongolia has successfully made the transition to democracy since the fall of the Soviet Union. The main industries remain agriculture and mining, as Mongolia is rich in natural resources. There has been some diversification into the areas of food processing and apparel production, and annual GDP growth over the last 5 years has averaged about 10%.

Those interested in viewing a list of scarce stamps with printing quantities of 100,000 or fewer may wish to view the StampSelector Scarce Stamp Quantities Issued List, which currently contains over 9,700 entries. Researching quantities issued data is vital to determining in which stamps to invest.

Saturday, November 9, 2013

Stamp Investment Tip: Oman 1948 Silver Wedding (Scott #25-26)

In 1948, the Sultanate of Muscat and Oman, then a British Protectorate, issued a set of two stamps celebrating the Silver Wedding Anniversary of King George VI and Queen Elizabeth, later known as the Queen Mother (Scott #25-26). 20,656 sets were issued, and Scott '13 prices the unused set at $38.00 .

The set has multiple market appeal among collectors of Oman, British Commonwealth, and British Royal Family topicals. As a popular topic for British Commonwealth collectors, it's hard to beat the Royal Family, with a stick, scepter, or other appropriately heavy object, and banking on such loyalty can pay interest.

A nation of 3.6 million people, Oman is one of the most developed and stable countries in the Arab World. Omani citizens enjoy good living standards, based largely on the country's oil wealth. Proven reserves of petroleum total about 5.5 billion barrels, the 24th largest in the world, and natural gas reserves are estimated at 849.5 billion cubic meters, ranking 28th in the world. Other sources of income, agriculture and industry, are small in comparison and count for less than 1% of the country's exports, but the government views economic diversification as a priority. Annual GDP growth has averaged about 5% over the last 5 years.

The Stamp Auction Bidders and Consignors Union (SABACU) is a forum for discussing stamp auctions, and represents the interests of stamp auction bidders and consignors in their dealings with stamp auctioneers. All stamp collectors and dealers are welcome to join. 

Thursday, November 7, 2013

Stamp Investment Tip: Azerbaijan 1994 Minerals Souvenir Sheet (Scott #422a)

In 1994, Azerbaijan issued a souvenir sheet picturing minerals (Scott #422a). 50,000 of the souvenir sheet were issued, and Scott '13 prices it unused at $ 3.50.

The issue has appeal to both collectors of Azerbaijan and Minerals topicalists, and is an inexpensive bet on the economic growth of Azerbaijan and the development of a stamp market there. This recommendation is consistent with my belief that one of the best ways to play the new and newly resurrected countries of Europe and Asia is to focus on popular topicals with low printings.

Azerbaijan is an oil-rich nation of about 9 million people, which also has significant reserves of natural gas and various minerals. Agriculture and tourism are also important to the Azerbaijani economy. The country shares all the problems of the former Soviet republics in making the transition from a command to a market economy, but its energy resources brighten its long-term prospects. It has begun making progress on economic reform, and old economic ties and structures are slowly being replaced. Annual GDP growth has averaged a stellar 21% over the last 5 years, largely based on the frenetic development of the country's oil wealth - an estimated 7 billion barrels of reserves.

Those interested in becoming part of an international community of stamp collectors, dealers, and investors are encouraged to join the "Stampselectors" group at Facebook. The group hosts lively discussions concerning stamp investment and practical aspects of collecting, and provides a useful venue for those who wish to buy, sell, or trade stamps.