General Commentary: Global Warming and the Stamp Market

   There is a popular anecdote known as the boiling frog story, which has the premise that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death.This story allegorically applies to the current environmental crisis popularly known as "Global Warming" or "Climate Change." There is no dispute among legitimate climate scientists that, minimally, the crisis threatens to severely degrade the quality of life for humans on the planet.Yet our leaders pay it lip service and take but token action, our corporations either trivialize it or dismiss it, and there is a general  air of complacency or fatalism on the part of the general public

   Over the past 540 million years, there have been five major mass extinctions in which over 50% of animal species died. In the most comprehensive of them, the Permian-Triassic Extinction Event
of 252 million years ago, up to 96% of all marine species and 70% of terrestrial vertebrate species became extinct. While the causes of this extinction is a matter of dispute, one of the suggested mechanisms was the sudden release of methane clathrate from the sea floor, which may occur when the temperature of the oceans rises significantly. This possible result of the global warming trend is the worst case scenario: vast quantities of methane bubbling out of the sea resulting in a rapid average temperature increase of 5 degrees or more and a decrease in the amount of oxygen in the atmosphere.

    There is very little mention of global warming on any of the popular investment TV shows. It does not factor into the stock analysis or projections of economic growth on "Fast Money" or Jim Cramer's "Mad Money." Larry Kudlow, whose show combines the topics of politics and finance, disparages those who are concerned about it as hysterical alarmists, and denies that their concern is backed by scientific research.

   To some extent, this is understandable. Aside from the fact that well-funded lobbyists and astroturf groups representing the fossil fuel and chemical industries are actively promoting denial and inaction, no one really knows how bad the problem will become, or whether humans have the capacity to cooperate effectively to either solve or cope with it. It is as if we were all living on a flat island watching a larger than usual wave forming in the distance, and no one knows how much damage it will do. From an investment perspective, governments mandating massive expenditures on combating the problem by transforming the system of energy consumption from what we've got now to something more sustainable would create opportunities and millions of jobs, but it's questionable whether there exists the vision and will to accomplish this in time.

   In any case, from an investment perspective, including one which focuses on stamps, it's pointless to consider the worst case scenarios (extinction of the human race, or a longer and more horrible repetition of the Dark Ages), because should either of these occur, the best investments will prove to be suicide kits (in the case of extinction) or weapons, biohazard suits, canned food, bomb shelters,  narcotics, and cannibal cookbooks, should a remnant of humanity find itself living in a hot, poisoned wasteland. It's more reasonable to assume that either we'll somehow rise to the challenge in time, or that we'll do so after some damage has been done, and life goes on.


   Nevertheless, since we don't know the magnitude of the consequences of our little experiment, it's worth considering some scenarios which are pretty negative. Here is a world map which shows how the world would look if the planet's icecaps were completely melted. In the Americas, countries which are significantly affected include the U.S., which is left with  diminished East and Gulf Coasts, Brazil, and Argentina. Floridians may look forward to taking scuba lessons.

 In Europe, all of the non-landlocked countries lose significant amounts of territory to the risen seas, with the exceptions of Norway and Iceland. Denmark is gone, and the Low Countries are now very low indeed. We will bid au revoir to Paris, London, and Berlin.

    As for South and East Asia - currently the centers of economic growth in the emerging market countries, well, let's just say that hopes for continued prosperity will be put on hold for a while. India, Bangladesh, Burma, Thailand, Cambodia, Vietnam, China, Malaysia, and Indonesia will all lose significant amounts of territory.

  In the Pacific, rising sea levels would endow Australia with two sizable lakes, including one on the eastern edge of its Outback. This new bounty may help to compensate for the more frequent incidence of heat waves, droughts, fires, severe storms, and flooding.


   Again, this is a pretty dire projection, and it may be more reasonable to assume that there will be some (but not total) loss of the polar icecaps and coastal areas.Yet climate change has other, generally negative, effects as well. Countries in Africa, South Asia, and Latin America stand the greatest chance of diminished agricultural productivity. These include many of the currently "emerging market" countries which were formerly impoverished Third and Fourth World dictatorships, and to that condition, for which few harbor nostalgia, they will return, but with more famine than before.

   There is an ancient Chinese curse: "May you live in interesting times." We may expect that if humans do not take effective action to avert a climate catastrophe, the situation will become far too diverting for many people to be interested in collecting stamps. We may expect a far more dangerous, unstable world in which the middle class is decimated, peaceful democracies degenerate into murderous police states, and despair fuels recruitment by apocalyptic terrorist groups.

  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.  

Stamp Investment Tip: Canada 1950 50c Dull Green Official (Scott #O11)

   In 1950, Canada overprinted stamps from its 50c Oil Wells Issue of earlier that year 'O.H.M.S." for official use (Scott #O11). 95,000 were issued, and Scott '14 prices the unused stamp at $40.00.

Because the market for modern Canadian high values has been weak of  late, it is possible to find  O11s in VF NH condition offered at 25%-35% of Scott.

 
I believe that the undervaluation of this stamp is due to its having been overlooked as an obscure back-of-book issue. Many were probably used as postage by government offices, and then discarded.

Interest in stamp collecting in Canada is much stronger than it is in the U.S., and I favor better B.N.A. stamps for investment, especially if they had modest printings and have been unjustifiably overlooked thus far.

With a population of about 31 million, Canada is one of the world's wealthiest countries, and one of the world's top ten trading nations. GDP growth has averaged 2.2% over the past five years, which takes into account the 0% growth of 2009 due to the global financial crisis. Canada's population is expected to age significantly over the next decades, thereby bolstering its population of serious collectors. Canadians over 60 are projected to increase from 16.7% of the population in 2000 to 27.9% in 2025, and 30.5% in 2050. Consequently, in the future, many more Canadians will be spending time working on their stamp collections on cold winter days.

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.       

Stamp Investment Tip: Somalia 1934 Airmail Semi-postals (Scott #CB1-10)

   I'm initiating coverage of Somalia with a scarce set issued by the Italians during their colonial administration, the 1934 Airmail Semi-postals celebrating the 65th birthday of their king, Victor Emmanuel III (Scott #CB1-10). 10,000 sets were issued, and Scott '14 prices the unused set at $135.- ($370.- for NH).

   Somalia is a poor nation, and I think it unlikely that a significant stamp market will develop there in the near future. From a philatelic investment perspective, it stamps of interest include the better issues of Somalia as an Italian colony, which should steadily increase in value with the growth in demand for Italy and Area, and some of the popular topical sets with printings in the low tens of thousands issued by the Republic.

   A nation of around 10 million, the Federal Republic of Somalia has maintained a healthy informal economy, based mainly on livestock and remittances from Somalis living overseas despite experiencing civil unrest. Due to a dearth of formal government statistics and the recent civil war, it is difficult to gauge the size or growth of the economy. According to the Central Bank of Somalia, the country's GDP per capita is $333. About 43% of the population live on less than one dollar a day. Somalia's economy consists of both traditional and modern production, with a gradual shift in favor of modern industrial techniques taking root. According to the Central Bank of Somalia, about 80% of the population are nomadic or semi-nomadic pastoralists, who keep goats, sheep, camels and cattle. The nomads also gather resins and gums to supplement their income. With the advantage of being located near the Arabian Peninsula, Somali traders have increasingly begun to challenge Australia's traditional dominance over the Gulf Arab livestock and meat market, offering quality animals at very low prices. In response, Gulf Arab states have started to make strategic investments in the country, with Saudi Arabia building livestock export infrastructure and the United Arab Emirates purchasing large farmlands. Somalia is also a major world supplier of frankincense and myrrh. Annual GDP growth has averaged about 2.5% over the last five years.

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.   

Stamp Investment Tip: Peru 1930 Child Welfare Congress (Scott #264-67)

  
  In 1930, Peru issued a set of 4 stamps honoring the 6th Pan-American Congress for Child Welfare (Scott #264-67). 10,000 sets were issued, and Scott '14 prices the unused set at $37.75.

  Peru has issued a number of grossly undervalued sets like this one. Demand for the country's stamps is boosted by the tendency of many collectors to focus on Latin America as a region.

   With a population of 29 million, Peru is an emerging market nation which has experienced significant economic growth over the last 15 years, and annual GDP growth averaging 7.2% over the last 5. Major exports include copper, gold, zinc, textiles, and fish meal. In 2010 Peru's per capita income was about $10,000. Poverty has steadily decreased since 2004, when nearly half the country's population was under the poverty line, although great inequities in income distribution persist. As the trend continues and more Peruvians join the middle class, the country's better stamps should do very well.

   "The Stamp Specialist" blog features wholesale buy prices for stamps which I am interested in purchasing. I've posted a buy list for the Peru, and it 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.

Stamp Investment Tip: Spain 1938 Cathedrals Souvenir Sheets (Scott #B108E, B108Ej)

   In 1938, the Nationalist forces under General Francisco Franco were winning over the Republicans fighting the Spanish Civil War, and several semi-postal souvenir sheets were issued which emphasized the Nationalists' patriotism and close ties to the Catholic Church. Among these were two souvenir sheets picturing Spanish cathedrals, a perforated sheet of four and an imperforate version (Scott #B108E and B108Ej). 70,000 of the perforated sheet and 30,000 of the imperforate sheet were issued, and Scott '14 prices them unused at $42.50  and $72.50, respectively.

    The sheets should do well based on the growth of stamp collecting in Spain, as well as among  Art/Architecture and Religion topicalists. 

    I strongly favor all scarce and undervalued issues of Spain and its colonies. The nation has 46 million people, the 9th largest economy in the world, and the most rapidly aging population in Europe, a trend which favors the growth of stamp collecting. Spain was hit by the global financial crisis and its annual GDP growth has been flat for five years, though the economy is beginning to recover.

   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.   

  

Stamp Investment Tip: Republic of China 1962 UNICEF Souvenir Sheet (Scott #1341a)

  In 1962, the Republic of China issued a souvenir sheet commemorating the 15th Anniversary of UNICEF (Scott #1341a). 100,000 sheets were issued, and Scott '14 prices them unused at $16.00.

  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.

   Better stamps and souvenir sheets of the R.O.C. have done well over the last few decades, but the market has been cooler than that for stamps of the People's Republic. I believe that as capitalism and incremental democratization take hold in the P.R.C., relations between the "two Chinas" will gradually improve, as will demand for stamps of the R.O.C.. The process of thawing may have already begun: as of 2008, more than $150 billion was invested in the P.R.C. by Taiwanese companies. About 10% of the Taiwanese labor force works in the P.R.C., often to run their own businesses.

    In the meantime, most of the demand for stamps of Taiwan will originate from collectors in Taiwan itself and among overseas Chinese (of which there are approximately 35 million). Taiwan, a nation of 23 million people, is one of the four "Asian Tigers," and has experienced explosive economic growth and industrialization over the last 5 decades. Annual GDP growth has averaged just under 4% over the last 5 years, but this partly reflects a contraction of 2% in 2009, a result of the global financial mess.

  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.       

Stamp Investment Tip: Batum - A General Overview

Batum First Stamps - the 1919 Tree Issue

   Batum, or Batumi,  is a seaside city on the Black Sea coast and capital of Adjara, an autonomous republic in southwest Georgia. The city was under Russian rule at the beginning of World War I, but local unrest led to Turkey entering the city in April 1918, followed by the British in December. The British stayed until July of 1920, and issued sixty-five stamps during their occupation of the city.

   Unfortunately, the most valuable stamps of Batum are surcharges on Russian stamps and fakes abound, making it a minefield for collectors. Consequently, there are only fifteen of these stamps which are pricey enough to justify purchasing conditional on obtaining expertization from the Royal Philatelic Society of London (RPSL) or British Philatelic Association (BPA). They're listed below, along quantities issued and Scott '14 values for unused:

1919 10r on 5k Claret (on Russia Sc. #77) - Scott #9; 350 issued; $ 950.-    
1919 10r on 10k on 7k Light Blue (on Russia #117) - #10; 314 issued; $ 975.-

Batum Scott #12

1919 35k on 4k Carmine (on Russia #76) - #11 - 79 issued; $ 1,950.-
1919 35k on 4k Dull Red (on Russia #91) - #12 (the key stamp of Batum) - 46 issued; $6,500.-
1919-20 50r on 10k Dark Blue (on Russia #79) - #25; 400 issued: $ 975.-
1919-20 50r on 2k Green (on Russia #120) - #26; 300 issued; $ 975.-
1919-20 50r on 2k Green (on Russia #74) - #27; 700 issued; $ 975.-
1919-20 50r on 3k Red (on Russia #75) - #28; 691 issued; $ 1,700.-
1919-20 50r on 4k Carmine (on Russia #76) - #29; 750 issued; $ 1,500.-
1919-20 50r on 5k Claret (on Russia #77) - #30; 920 issued; $ 975.-
1919-20 50r on 10k Dark Blue (on Russia #79) - #31; 180 issued; $ 2,250.-
1919-20 50r on 15k Red Brown and Blue (on Russia #81) - #32; 300 issued; $ 700.-
1919-20 50r on 2k Green (on Russia #120) - #47; 400 issued; $ 975.-
1919-20 50r on 3k Red (on Russia #121) - #48; 359 issued; $ 975.-
1919-20 50r on 5k Claret (on Russia #123) - # 49; 120 issued; $ 1,500.-

   While attempting to purchase authentic and valuable stamps of Batum may be a possible source of headaches for some, they have potential multiple market appeal among collectors of British Commonwealth, Russia, and Georgia. Recently, the city began issuing stamps of its own (flashy topicals pandering to the collector market), although as yet, Scott doesn't recognize these issues.

   Batumi (population approximately 180,000) serves as an important port and a commercial center. It is situated in a subtropical zone, rich in agricultural produce such as citrus fruit and tea. While industries of the city include shipbuilding, food processing, and light manufacturing, most of its economy revolves around tourism.

  With a population of about 4.5 million, the Republic of Georgia suffered severe damage to its economy due due to civil strife in the 1990s. With the help of the IMF and World Bank, it has made substantial economic gains since 2000, achieving robust  growth and curtailing inflation. Georgia has a sizable hydroelectric capacity, a factor that has become an increasingly important component of its energy supplies and policies. The country’s topography and abundance of hydro resources give it serious potential to dominate hydroelectric markets in the Caucasus region. Agriculture and tourism have also been principal economic sectors. Annual GDP growth has averaged just under 5% over the past 5 years.

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.   

Stamp Investment Tip: Ecuador 1936 Quito Philatelic Exhibition (Scott #352-57/C43-48)

   In 1936, Ecuador issued a compound set of triangular stamps celebrating the Quito Philatelic Exhibition (Scott #352-57/C43-48). 10,000 sets were issued, and Scott '14 prices the unused set at $50.50.

   As with many issues of Latin America, the set is grossly undervalued.

   Many who collect Ecuador also collect stamps of South America, Central America, or all of Latin America, so demand tends to be more generalized than usual. This is not to say that there isn't demand originating from collectors focusing on the individual country as well, but rather that the tendency to collect the whole region is an important factor to consider.

   Ecuador, a democratic republic of 13.6 million people, is considered a medium-income country, with about 38% of its population living below the poverty line. Ecuador's natural resources include petroleum, fish, shrimp, timber and gold. In addition, it has a prosperous agricultural sector, producing bananas, flowers, coffee, cacao, sugar, tropical fruits, palm oil, palm hearts, rice, roses, and corn. While Ecuador's economy suffered during the 2008-09 financial crisis, weathering a default and repurchase of its debt at a discount, it seems to be recovering. Annual GDP growth over the last 5 years has averaged about 5%.

  "The Stamp Specialist" blog features wholesale buy prices for stamps which I am interested in purchasing, as well as links to other dealers' buy lists.  Viewing such buy lists every now and then is an excellent way to keep current on the vagaries of the stamp market.

Stamp Investment Tip: French Southern and Antarctic Territories 1968 Human Rights Year (Scott #32)

   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 stamp honoring Human Rights Year, which was instituted by the U.N. General Assembly (Scott #32).  39,000 were issued, and Scott '14 prices the unused stamp at $60.-  .

  Demand for stamps of the French Antarctic is strong in France and among collectors of French Colonies/Area as well as collectors of Polar Topicals, and the Human Rights Year stamp has additional appeal as a U.N. 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.