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Thursday, February 27, 2014

General Commentary: Cultural Factors Influencing the Popularity of Stamp Collecting

   While economic factors play a crucial role in determining the size of a country's stamp collecting population, a less quantifiable but nevertheless significant set of influences involve its cultural values.

   For over a century after the first postage stamp was issued, the stamp market was centered in Europe (especially Germany), followed by the United States. Japan became the first Asian nation to develop a significant stamp collecting market, largely due to its miraculous economic progress following its defeat in World War II. Over the last 30 years, China has superseded Europe, the U.S., and Japan as the principal philatelic market, and other East Asian nations (the so-called Asian Tigers) have also developed significant markets.

   Clearly, much of this transformation is due to the growth of the middle class in these rapidly developing nations, where once no middle class existed and most of the wealth and power were in the hands of a tiny oligarchical elite. What is less obvious is to what extent culture has played a role in determining the degree and nature of that transformation. Does the growth of a country's middle class always signal a proportionate growth in the number of its stamp collectors, or do other less measurable factors come into play?

   In other words, do countries with similar economic growth but different cultural values develop proportionately similar stamp collecting populations based upon the growth of their middle classes? If not, then how do these values promote or diminish interest in the hobby?

  These are important questions to consider if one is attempting to predict demand for a country's stamps. Before addressing them, I wish to state that I am in no way claiming that any one cultural, religious, or ethnic group is better than any other. Neither am I assuming that cultural values are static, or impervious to economic or other influences.

   The ostensibly cultural determinant is particularly striking when comparing the stamp market of two affluent nations: the U.S. and Germany. As noted in an earlier article, it is very difficult to estimate the number of "serious stamp collectors" in a country. For the most part, only the population of serious collectors  (however broadly characterized) is of interest from a philatelic investment perspective, because non-serious or beginning collectors tend to be less committed to the hobby, and tend to focus on common, inexpensive material. Based completely on experience, a few shreds of evidence, and hearsay, I would guess that there are no more than 250,000 serious philatelists in the U.S. (perhaps .07% of the population) vs. .5 million to 1 million in Germany (.6% to 1.25%).

    Why is this so? However it is defined, the middle class is not 8 to 14 times larger as a proportion of the population in Germany than it is in the U.S.. Why are Germans, on the whole, 8 to 14 times more interested in stamps than Americans?

   As yet, there has been no research done on the sociology of stamp collecting. We have no clue as to whether, in the future, Koreans will be more interested in stamps than Vietnamese, whether Buddhists will be more interested than Muslims, etc..

   In the last three decades, the stamp collecting cohort within the People's Republic of China has become the world's largest. 20 million of the world's 50-60 million stamp collectors are Chinese, and according to at least one article, all of them are "serious" collectors. I think it more likely that between 4 and 6 million Chinese are serious stamp collectors (about .3% - .5% of the population), which raises the question: why are Chinese 4 to 7 times more interested in stamps than Americans?

   While I've found nothing in the way of data suggesting an answer to this question, my instincts tell me that the answer relates to two variables.

   The first is how intellectuals are perceived by society. Since the Pioneer Era, there has existed in the U.S. a strong anti-intellectual tendency, coupled with a belief that intellectuals are odd, weak, or socially awkward, as well as arrogant and elitist. Collecting stamps is considered an esoteric pursuit of introverted intellectuals - a hobby for "geeks", "nerds", "eggheads", etc.. Perhaps countries in which intellectuals are accorded higher status (like Germany and China, for instance) tend to have a higher population of serious stamp collectors.

   The second relates to patriotism. Since most stamp collectors focus on the stamps of their countries, it stands to reason that where there is interest in the history and culture of a country, there will be a greater interest in its stamps. Countries in which the citizens tend to identify with tribal or ethnic groups,  in which most of the population does not identify with the country as a nation, or in which most of the population has become disillusioned, will be less likely to collect. While patriotism is not dead in the U.S., it has certainly declined significantly over the last 50 years.

   Obviously these are just hunches, and the actual factors which influence the popularity of stamp collecting in a particular country are far more subtle and complex.

   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.      

Sunday, February 23, 2014

Stamp Investment Tip: St. Pierre and Miquelon 1891 35c Violet on Orange (Scott #32)

   The Territorial Collectivity of St. Pierre and Miquelon, the only remnant of the former French colonial empire in North America, is comprised of two small groups of islands off the coast of Newfoundland. From a philatelic investment perspective, it's of interest because its stamps are popular in Canada and among collectors of French Colonies - both growing markets.

   In 1891, the French overprinted French Colonies stamps for the colony, issuing a set
of seventeen stamps (Scott #19-35). All of the high values of the set from the 30 centimes and up are scarce, but the key is the 35c (Scott #32). It is also the only stamp from the set on which it is worth purchasing expertization. 700 were issued, and Scott '14 prices it unused at $525.- .

    Many of the better early stamps of St. Pierre and Miquelon are grossly undervalued, possibly because they're all overprints, necessitating enduring the inconvenience and expense of obtaining certificates. It's a temporary dampening factor, in my opinion, and as the market grows and becomes more sophisticated, it will matter less.

   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.  

Wednesday, February 19, 2014

Stamp Investment Tip: Zululand 1888-93 Victoria (Scott #1-10)

  I'm initiating coverage of Zululand by recommending its first set (Scott #1-10). The set was produced by overprinting stamps from Great Britain's 1887-92 Victoria issue. 3,701 sets were issued, and Scott '14 prices it unused at $555.50. If purchased unused, it's not necessary to obtain expertization, since none of the individual stamps within the set are significantly more expensive than the basic British one.

   The British colony of Zululand issued 24 stamps (not including varieties) between 1888-1896, and all are worthy of consideration as investments. In 1897, Zululand was annexed to Natal, which in turn was integrated into the Union of South Africa in 1910.

    The main sources of demand for stamps of Zululand are British Commonwealth collectors and collectors of South Africa and States, both of which I view as growing markets. A recent Price Waterhouse report projects that South Africa will be one of the world's fastest growing economies over the next 40 years.

   As a a middle-income country of about 49 million, South Africa has an abundant supply of resources, well-developed financial, legal, communications, energy, and transport sectors, a stock exchange that ranks among the top twenty in the world, and a modern infrastructure supporting an efficient distribution of goods to major urban centers throughout the entire region. South Africa is ranked 25th in the world in terms of GDP. Annual GDP growth has averaged about 2.5% over the past 5 years.

However, the country has a two-tiered economy- one rivaling other developed countries and the other with only the most basic infrastructure, similar to a Third World nation. Unemployment is extremely high and income inequality is approximately equal to Brazil. Also, there is an 18% HIV infection rate among South African adults, among the highest in the world.

  Given the somewhat mixed picture that South Africa presents, I feel that better stamps from the country and its related issuing entities should be viewed mainly as conservative plays on the growth of British Commonwealth collecting. I am hopeful that over time, most of South Africa's worst problems will be ameliorated or solved, but whether that will require years or decades is an open question.

  Those interested in viewing a list of scarce stamps with printing quantities of 100,000 or fewer may wish to check out 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, February 15, 2014

Stamp Investment Tip: Mexico 1946 Zacatecas Anniversary (Scott #820-24, C163-66)

   In 1946, Mexico issued a compound set of stamps commemorating the 400th Anniversary of the Founding of the City of Zacatecas (Scott #820-24, C163-66). 20,000 sets were issued, and Scott '14 prices the unused set at $68.65.

  Most of the sets were probably used as postage and discarded, so it is likely that no more than 2,000-5,000 remain.

With a population of about 109 million,  Mexico has a diverse and developing economy, but modernization remains a slow and uneven process. Current challenges include addressing income inequality, crime, corruption, upgrading the infrastructure, and reforming tax and labor laws. Annual GDP growth has averaged about 2% over the last five years, which takes into account a contraction of 6.5% in 2009 due to the global financial crisis. Stamps of Mexico are popular among collectors in the U.S. as well as in Mexico, and those who wish to learn more about Mexican stamps should consider joining the Mexico Elmhurst Philatelic Society International (M.E.P.S.I.). MEPSI provides many useful services for collectors of Mexico, including expertizing Mexican stamps.

  "The Stamp Specialist" blog features buy prices for stamps which I am interested in purchasing. The buy list for Mexico includes the set recommended in this article. Viewing dealers' buy lists every now and then is an excellent way to keep current on the vagaries of the stamp market.

Wednesday, February 12, 2014

Stamp Investment Tip: Czechoslovakia 1925 Olympic Congress Overprint (B137-39)

  In  1925, Czechoslovakia honored the International Olympic Congress by overprinting three of its 1923 President Masaryk semi-postal stamps (Scott #B137-39).  The additional revenue was divided between a fund for postal clerks and the Olympic Games Committee. 50,000 sets were issued, and Scott '14 prices the unused set at $97.-  ($175.-  for NH).

  Stamps of Czechoslovakia are very popular among collectors in Europe, and I expect that the number of stamp collectors in the new nations that comprised the "former Czechoslovakia" will continue to grow. This set has additional appeal as a Sports/Olympics topical.

  The end of Communist rule in Czechoslovakia in 1989 was followed by the country's dissolution and division into two successor states- the Czech Republic and the Republic of Slovakia. With among the most developed industrialized economies in Eastern Europe, these republics have a combined population of about 16 million. They have privatized most of its formerly state-owned industries and have maintained annual GDP growth of around 3% over the past 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.  

Saturday, February 8, 2014

Stamp Investment Tip: South Korea 1955 Syngman Rhee 80th Birthday Presentation Sheet (Michel Block 84, Scott 217Note))

   From 1948 to 1958, South Korea issued presentation sheets featuring the designs of its regular postage stamps. These ungummed, often crudely produced sheets were issued  in very low quantities and given to dignitaries, including friends of  the President, as the country was not completely free of cronyism. The Michel Catalog lists these sheets, but Scott does not, although it mentions them. They frequently sell at auction for between 10% and 20% of Michel, and I consider them grossly undervalued due to the uncertainty about their legitimacy. They were issued during a period of war and the gradual recovery from it, when the country was very poor, and they are as scarce as hen's teeth.

   In 1955, South Korea issued presentation sheet celebrating President Syngman Rhee's 80th Birthday (Michel Block 84, Scott 217Note). 1,000 sheets were issued, and Michel prices it at 450.- Euros (about $ 610.-). I recommend purchasing it if offered at around $60.- to $120.- (about 10%-20% of Michel CV).

  A nation of about 50 million people, South Korea is one of the fastest growing economies in the world. Currently, it is the world's 13th largest economy and eighth largest exporter. It's export-fueled economic growth has led to a miraculous explosion in its GDP, from almost nothing 50 years ago to about $1 trillion today. Annual GDP growth has averaged about 3.5% over the last 5 years, reflecting a slowdown in 2009 due to the global financial crisis. Furthermore, South Korea may be the most rapidly aging nation on earth, as its 65+ population is expected to more than quadruple from 9% in 2005 to 38% in 2050. Obviously, this could pose economic challenges for the country, but it will almost certainly add to its stamp collecting population.

   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.     

Wednesday, February 5, 2014

Stamp Investment Tip: Iran 1956 National Olympic Committee (Scott #1047)

  In 1956, Iran issued a stamp commemorating the tenth anniversary of the Iranian National Olympic Committee (Scott #1047). 30,000 were issued, and Scott '14 prices the unused stamp at $40.00.

  The stamp has additional appeal both a a Sports/Olympics topical and as an Animal topical, due to the Persian Lion and Sun emblem.

I believe that the stamp is undervalued due to the unpopularity of Iran's stamps, a consequence of its pariah status. Currently, Iranian stamps of the pre-revolutionary period are primarily of interest to collectors among the Iranians living abroad, a relatively affluent group, of whom there are about 1.3 million.
  Note that a common defect found on many Iranian stamps of the '50s is badly toned, "gloppy" gum. When purchasing #1047, endeavor to select examples with clean gum.

   Stamps of Iran are not widely collected at present, partly for political reasons and partly because of the ubiquity of fakes among the early overprinted issues. Nevertheless, it is an oil-rich nation (ranked second in both oil and natural gas reserves) of 76 million people, and there are signs that many of them are becoming fed up with the corrupt and reactionary theocracy that is isolating Iran from the rest of the world. Furthermore, it is beginning to diversify away from its dependence on oil into other industries, such as biotech, nanotech, and pharmaceuticals, and it has the potential to develop a thriving tourism sector, should it institute reforms and begin to improve its image.

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.   

Sunday, February 2, 2014

Stamp Investment Tip: Argentina 1948 Postal Service Anniversary Souvenir Sheets (Scott #582-83)

   In 1948, Argentina issued a set of two souvenir sheets celebrating the bicentennial of the establishment of postal service on the Plata River (Scott #582-83).  20,000 sets were issued, and Scott '14 prices the unused set at $32.- .

   These colorful sheets have additional appeal to collectors of Transportation and Animal/Horse topicals. 

   I continue to favor all better stamps of Latin America as bets on the growth of the region's middle class. As collectors often focus on Latin America as a whole, demand for the stamps of the individual countries is supplemented by the the more general regional focus.

With a population of about 40 million, Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Historically, Argentina's economic performance has been uneven, as periods of high economic growth have alternated with severe downturns. Over the last 5 years, annual GDP growth has averaged an impressive 6.5%. However, over the last 20 years Argentina has weathered several major debt crises and recessions.

 "The Stamp Specialist" blog features my buy prices for stamps which I am interested in purchasing. I've posted a buy list for Argentina, including the set recommended in this article. Viewing dealers' buy lists every now and then is an excellent way to keep current on the vagaries of the stamp market.