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Thursday, November 27, 2014

Stamp Investment Tip: Brazil 1934 National Philatelic Exposition (Scott #B1-4)

In 1934, Brazil issued a set of semi-postals for the National Philatelic Exposition (Scott #B1-4). Each stamp within the set sold for 100 reis over its face value, and the surtax helped defray the expenses of the exhibition. 50,040 sets were issued, and Scott '14 prices the unused set at $18.50 .

  As the stamps picture the designs of the "small bull's eye" issue of ninety years earlier, they have additional appeal as "Stamp on Stamp" topicals.

This is a very inexpensive set, considering Brazil's population and prospects for economic growth over the coming decades.

With 191 million people, Brazil is the largest economy in Latin America, and the world's eighth largest. Political and economic reforms have given the country a brighter future than it had in the bad old days of oligarchical dictatorship. The Brazilian economy is diverse, the country is aggressively investing in its future by generously funding technological research and education, and exports are booming. Annual GDP growth has averaged a little over 5% over the last 5 years.

There are a number of undervalued Brazilian issues with printing quantities of 10,000 to 100,000, some of which have topical appeal, and recommending them for accumulation seems a no-brainer. Brazil looks destined to become an economic superpower, and even if it mirrors the philatelically anemic U.S. and only one out of a thousand Brazilians become serious stamp collectors, they'll be competing for their nation's better stamps, only to find that the cupboard is bare.

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

Sunday, November 23, 2014

Stamp Investment Tip: Great Britain- Offices in Eritrea 1948 Postage Dues (Scott #J1-5)

Great Britain issued stamps for use by its military and other personnel stationed overseas, and many of these stamps are quite scarce.

In 1948, the British issued a set of five postage due stamps for use by its forces in Eritrea, by surcharging its regular postage due stamps (Scott #J1-5). 22,264 sets were issued, and Scott '14 prices the unused set at $65.00 .

The set has potential dual market appeal among collectors of Great Britain/Commonwealth and Eritrea. As a boring postage due issue, it remains overlooked, for now.

Eritrea is a newly independent nation with a population of about 5.2 million. Like many other African nations, its economy is largely based on subsistence agriculture, with 80% of the population involved in farming and herding. Drought has often created trouble in the farming areas. The country is still recovering from the effects of a war with Ethiopia, which ended in 2000. It has substantial mineral deposits and oil reserves which are largely unexplored. Annual GDP growth has averaged 2.6% over the last five years.

Those interested in joining a community of Stamp Auction bidders and consignors may wish to join the Stamp Auction Bidders' and Consignors' Union (SABACU) group at Facebook. The organization provides a venue for discussion of stamp auctions, and endeavors to represent the interests of bidders and consignors.

Thursday, November 20, 2014

Stamp Investment Tip: Lebanon 1954 Khalde International Airport (Scott #C193-96)

  In 1954, Lebanon issued a set of four airmail stamps celebrating the opening of Khalde International Airport in Beirut (Scott #C193-96). 15,000 sets were issued, and Scott '14 prices the unused set at $14.50 . It is likely that most of the sets were used as postage and discarded.

   The set has multiple market appeal among collectors of Lebanon, French Colonies/Area, and Transportation topicals.

 Lebanon, a nation of 4.2 million people, is noted for its commercial enterprise. Over the course of time, emigration has yielded Lebanese "commercial networks" throughout the world. As a result, remittances from Lebanese abroad to family members within the country total $8.2 billion and account for one fifth of the country's economy. The country has the largest proportion of skilled labor among Arab States. The tourism and banking sectors are the the most important pillars of the Lebanese economy, though they have at times been disrupted by political instability. Annual GDP growth has averaged about 4.8% over the last 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.  

Sunday, November 16, 2014

Stamp Investment Tip: San Marino 1949-50 Views (Scott #278-93)

From 1949-50, San Marino issued a set of sixteen stamps picturing view of the tiny republic (Scott #278-93). 20,338 sets were issued, and Scott '14 prices the unused set at $262.70 ($525.00 for NH) .

Despite the fact that stamps of San Marino are mainly sold to collectors to generate income for the country, it is likely that quite a few of the Views sets were used as postage and discarded. The high values were pricey for collectors of the time, especially given the state of the Italian economy in the early Post-War years.

San Marino is a state situated on the Italian Peninsula on the eastern side of the Apennine Mountains, with a population of about 30,000.While the country probably does not contain enough collectors to form a significant stamp collecting population, its stamps are popular among collectors of Italy and Area. In addition, San Marino has issued quite a few popular topicals, which has bolstered interest in its stamps.

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 13, 2014

Stamp Investment Tip: Paraguay 1962 Boy Scouts (Scott #638-45)

 In 1962, Paraguay issued a set of eights stamps honoring the Boy Scouts (Scott #638-45). 5,000 sets were issued, and Scott '14 prices the unused set at $7.75.

  This attractive set has dual market appeal among collectors of Paraguay and Boy Scout topicals. Worldwide membership of the Boy Scouts is estimated at 25 million, and Scouting topicals are extremely popular internationally. There is even a organization dedicated to promoting the collecting of stamps honoring Scouting - the Scouts on Stamps Society International (S.O.S.S.I.).

The main drawback to investing in certain Paraguayan  issues from the '60s and later is that of questionable legitimacy. Quite a few were issued solely to milk collectors and never saw any postal use. The Scott Catalog does not list the most egregious issues, but does list many which fall into a gray area, including this set. It is inexpensive because Scott notes its "questionable status." Nevertheless, the combination of low issuance quantity, low catalog value, and topical appeal make the set a low-risk speculation.

With about 6 1/2 million people, Paraguay is an emerging market nation with the potential to become a major agricultural exporter. Its subtropical climate allows for 5 harvests every 24 months, and it has vast tracts of virgin arable land. In addition, manufacturing has shown strong growth in the production of edible oils, garments, organic sugar, meat processing, and steel. Annual GDP growth has averaged 4.5% over the past 5 years, and was steadily increasing until it experienced a recent slight decline due to the global financial crisis.

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

Sunday, November 9, 2014

Practical Advice: Unethical Games that Some Stamp Auctioneers Play

  In earlier "Practical Advice" articles, I offered some tips for those interested in consigning or bidding at stamp auctions. This article shall consider a few of the unethical practices employed by some auctioneers, and how to avoid being victimized.
   Whether one bids at or consigns to stamp auctions, it's important to realize that not all stamp auctioneers are completely honest or trustworthy, and that many fall somewhere between the extremes of saintliness and criminality. There do exist a few who cheat bidders and consignors, betray their trust, and hurt the hobby. Fortunately, completely unscrupulous auctioneers are rare.

   However, there are practices utilized by some auctioneers which are unfair to their customers. Bidders can often avoid "misunderstandings" resulting from such practices by carefully reading the fine print of an auctioneer's conditions of sale before bidding, and if necessary, requesting that his bids be accepted on condition of amending particular terms. A consignor should never fully trust an auctioneer until he's built a relationship with him, or has taken precautions to avoid being cheated. 

   Among the unethical practices to which I've been subject as a bidder (or of which I've been informed by others) are the following:

- Overgrading: many auctioneers and mail sale dealers are rather "liberal" when it comes to grading, ignoring minor defects which nevertheless have a major effect on market value. In addition, some of these individuals make a practice of delaying refunds on returned lots (sometimes for months), or refunding the cost of the lots minus shipping and handling. Grossly mis-describing lots is a disservice to bidders, and in my opinion, the best way to avoid  inconvenient and infuriating situations is by providing the auctioneer with references, and then bidding conditional on "inspection prior to payment - net in 10 days of receipt" terms on won lots. Grossly mis-described lots should be returned without payment for shipping, and should an auctioneer send some lots which are purchased by the bidder while others are grossly mis-described and returned, the "round-trip" costs for shipping these lots should be deducted from the payment for those kept.

- Excessive shipping and handling costs that are way over the cost of postage: this is usually trivial enough to be considered more of an insult rather than an injury, and is sometimes noted in the conditions of sale as a minimum shipping cost. However, sometimes the conditions of sale are rather vague about such costs and do not provide any guidance regarding amounts that will be charged, and auctioneers will attempt to use this vagueness as a license to bilk their customers. Once, an auctioneer tried to charge me $25.00 as the combined shipping, handling, and administrative cost on a $140.00 single stamp lot, which could have been sent to me via insured mail for about $5.00. Auctioneers sometimes justify such practices as means of charging successful bidders for the cost of producing the auction catalogs, which are often provided for free. This seems rather odd to me, since one would think that auctioneers would consider successful bidders among their best customers and would encourage them to bid in the future, rather than penalizing them for the costs of providing catalogs to those who did not bid, or who bid too little to win anything.  In any case,  shipping and handling costs should be clearly noted by the auctioneer, and factored into the bidding.

- Inadequate time allowed for an extension of the return privilege for purposes of obtaining expertization: despite the fact that expertization can sometimes take 6 months or more, there are some auctioneers who allow only 4-6 weeks. A possible reason for this term is that it allows the auctioneer to bilk bidders who neglect to read the conditions of sale by selling them fakes and forgeries as authentic stamps. If bidding in an auction with such terms, either request an amendment so as to allow for sufficient time for expertization, or else avoid bidding on lots which might require it.

- Disallowing returns on lots containing over a certain number of stamps: this is normal and acceptable when it comes to collections, but can prove problematic for sets of stamps. Should a bidder receive a set of stamps described as sound when one or more of the stamps is grossly defective, then he should be allowed to return the set. An auctioneer who uses such a condition to sell defective stamps as sound ones is basically attempting to implement an unconscionable contract.

- Purging bidders who return stamps from mailing lists: this strategy has been used by certain mail bid sales and auctions. Bidders who return mis-described stamps are sent  refunds, and then are purged from the mailing list, and receive no more catalogs. Ultimately, the auctioneer builds an extremely valuable mailing list of "suckers"- collectors who reliably overbid on overgraded, defective stamps, and never return them.

- "In-bidding", or secretly raising the second highest bid at auctions in which the winning bid is supposed to be one advance over the second highest bid. This is usually impossible to prove, and frequently an auctioneer who does this will attempt to lessen suspicion by not raising the second highest bid on every lot won by a bidder. There is really no means of preventing being cheated in this way; therefore one should never bid more than one is willing to pay for a lot.

- Allowing buyers to beat a winning auction bid for several days after the close of the auction: I've been informed that at least one mail bid auction engages in this practice. Obviously it would be unthinkable at a public stamp auction, and one wonders why anyone would want to bid at all  if  winning bids simply become increased reserves for buyers to beat after the auction is over.

Among those that I've experienced as a consignor (or of which I've been informed by others) are as follows:

- Collections or accumulations returned to the consignor after having had some of the most valuable stamps within them stolen: this is usually due to theft by prospective bidders inspecting the collections, although it is sometimes unclear whether the theft was committed by such individuals or by the auctioneer or one of his employees. Since stamps are small, it isn't very difficult for a thief inspecting a collection before an auction to drop a few into his case when the attendant isn't looking. When submitting collection lots, it's prudent to note the most expensive stamps within them in the description, and even to photocopy them and provide a copy to the auctioneer, so as to provide evidence justifying a reimbursement, should a theft occur.  Inadequate security can result in dishonest customers either blatantly stealing items from consignments, or employing other larcenous tactics, such as hiding valuable stamps within an accumulation among common ones, so that the accumulation may be won for a low bid.

- Inadequate insurance of consignments, coupled with a refusal by the auctioneer to take responsibility for resulting losses: this can be a very costly lesson. If an auctioneer is unaware of his private insurer's policies or has a claim denied through no fault of the consignor, then he is still obligated to take financial responsibility for the loss, rather than passing it on to the consignor. In order to avoid such situations from arising, it's best for consignors not to put too much faith in verbal agreements regarding insurance made with a stamp auctioneer, even if  he seems generally honest. Insist on having all such agreements in writing.

- Changes in management resulting in changes in business practices and relationships to customers;  it is always worth remembering that companies consist of human beings, and that trust should always be earned. A change in the management at a stamp auction firm can result in the quality of service improving, declining, or staying the same, if the new management faithfully carries on the traditions of the previous owners. At worst, it can result in a radical degradation of its business ethics and treatment of its customers. It's best not to assume that a firm will remain the same if its management changes. Ideally, there should be sufficient mutual trust between the customer and the auctioneer and a fundamental understanding that each will take responsibility for his mistakes (or, in the case of the auctioneer, those of his employees), and pay for them if costs are incurred.

   In the U.S., there has been a trend towards consolidation in the stamp auction business, resulting in a dramatic increase in the combined commissions (the seller's commission plus buyer's commission) that stamp auctioneers charge.  These have risen from about 20% a decade or two ago to the current outrageous levels of 25%-30%, with little or no real improvement in the quality of service. In fact, most auctioneers have significantly increased the required minimum lot values and minimum consignment values, thereby making their services less accessible to mid-level consignors. Some of them justify the increased commissions and increased lot and consignment minimums by arguing that their costs have increased, but I believe that the main reason is that the stamp auction business has become more of an oligopoly than it once was. There is a crying need for an auctioneer who offers reasonable commissions and better terms to for those with mid- and high level consignments, and should such an auction house be established, it would not only do very well, but might also result in others  lowering their commissions in order to compete.

   I have recently started a petition against excessive stamp auction commissions, which I encourage readers to copy and circulate. It gives the signer the option of indicating the maximum commission level that he or she will tolerate as a consignor, and includes an address to which to send completed petitions. When a sufficient number of people have signed the petition, copies will be sent to the American Philatelic Society and the American Stamp Dealer's Association.

   Until such needed reforms are implemented, there are other less expensive means of selling stamps. Ebay's stamp auctions have a far larger audience than that of any stamp auctioneer, and Ebay waives the insertion fees on the first 50 unsold lots per month. The total commissions on items sold amounts to less than 15%, even after combining the insertion fee, final value fee, and Paypal fee. Members of the American Philatelic Society's can use its online StampStore, by sending in stamps mounted on pages, with brief descriptions of the stamps, catalog values, etc.. The member sets the price, and if sold, the A.P.S. charges a 20% seller's commission. This is a recent innovation, similar to the organization's Mail Sale Circuit books, which have no online component and which provide a convenient means of selling  inexpensive stamps. With both Ebay and the A.P.S. StampStore, the seller sets the minimum bid or price, and in both cases, reserves can be lowered online, via re-listing lots on Ebay and by changing the price online with StampStore.

   I have no information on whether any of unethical practices described above are utilized by stamp auctioneers in other countries, so I encourage readers outside of the U.S. to express their views on this in the Comments section. Also, if any reader wishes to inform me of other tricks that some auctioneers play on their customers, I'll consider adding the description of it to this article.   

   Those interested in joining a community of Stamp Auction bidders and consignors may wish to join the Stamp Auction Bidders' and Consignors' Union (SABACU) group at Facebook. The organization provides a venue for discussion of stamp auctions, and endeavors to represent the interests of bidders and consignors.

Thursday, November 6, 2014

Stamp Investment Tip: New South Wales 1850-51 Colony Seal Issues (Scott #1-9)

   The first stamps of Australia were issued by the various British colonies within, also known as the Australian States. The designs of the earliest stamps of these colonies were very crude. Nevertheless, the stamps are very popular among collectors in Australia.

  New South Wales issued its first stamps from 1850 to '51 (Scott #1-9). These bore a rather juvenile drawing of the Colony's Seal, and were printed using five different plates and on different types of paper. Consequently, they are of interest to specialists.

     Quantities issued for the basic stamps range from 28,000 to 90,000, and while unused examples are extremely scarce and catalog in the thousands of dollars, used copies are far more affordable, mostly cataloging in the hundreds.

   I recommend purchase of these stamps in F-VF or better, used condition. They represent a conservative investment in the economic growth of Australia.

   Australia is a prosperous nation of 22 million people and a diverse economy, with thriving service, agricultural, and mining sectors. Annual GDP growth has averaged 3.6% over the past 15 years. Recently, there has been considerable growth in mining and petroleum extraction, in part due to increased exports to the resource-hungry Chinese market. It is likely that Australia's stamp collecting population will grow significantly as the nation ages. The percentage of Australians over 60 is projected to rise from 16% in 2000 to 24.8% in 2025, and 28.2% in 2050.

  The Stamp Auction Bidders and Consignors Union (SABACU) is a forum for discussing stamp auctions, and it also offers advice to stamp auction bidders and consignors to assist them in their dealings with stamp auctioneers. All stamp collectors and dealers are welcome to join.     

Sunday, November 2, 2014

Stamp Investment Tip: U.S. 1909 Lincoln Centenary Issue (Scott #367-69)

Scott #367 and 369
  In 1909, the U.S. issued a stamp honoring the centenary of President Abraham Lincoln's birth in three different formats - perforated with white paper, imperforate, and perforated with bluish paper (Scott
#367-69). Lincoln is portrayed in a sad or reflective mood, which is appropriate given the tragic events which darkened his presidency. The issuance quantities for these stamps were approximately 148 million, 1.274 million, and 637,000, respectively. I've always felt that #369 should be described as having grayish rather than bluish paper, but if one squints while looking at the stamp, its "bluishness" is barely discernible.

   Lincoln may have been America's greatest president, and this issue certainly qualifies as a Famous Men/Women topical (the second most popular topical category, after Animals).

   As these stamps were issued in panes of 100, with one plate block of 6 per pane, the approximate number of plate blocks issued was 1.48 million (Sc.#367), 12,740 (Sc. #368), and 6,370 (Sc.#369) and the Scott '15 Catalog values for these are  $275.-  for NH,  $390.- for NH, and   $4,250.- for NH, respectively. Obviously, a far greater proportion of #367 were used as postage than of the other stamps. Nevertheless, I consider #368 plate blocks to be the best investment of the three, especially if purchased in VF NH condition and with none of the  annoying gum bends that are commonly found on this and the other 1909 imperforates.

 I recommend purchase of the imperforate plate block in F-VF+ NH condition, as opposed to purchasing it hinged due to the complexities involved in grading the gum of a hinged plate block based on the degree of hinging.

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.