Buying and Selling Stamps

Stamps as an Investment


There have been times when stamps have been considered to be a good investment, and indeed some people still suggest that investing in stamps is a sensible strategy.  I'm not so sure.


This section has yet to be written.  (As you can tell!)




One of the key things about considering anything as an investment is looking to the future for what the investment will be worth at some subsequent time.  One generally invests in things that either have real worth or implied worth (although the two have some unavoidable linkages).  By way of example, a gallon of petrol has real worth, a pound of rice has real worth.  These things will always have a value, because they are essential commodities that can only be otherwise obtained through spending money or time, effort and energy, and while their value may go up or down, they still have a real and reasonably permanent value associated with them.

But an ounce of gold has primarily implied worth, and an ounce of diamonds has 99.99% implied worth - these things are arbitrarily worth whatever it is that people think they are worth, quite independent of any underlying real value to them.

The good news about things with implied worth is that they are much more susceptible to sudden strong increases in value than things with real worth.  But, guess what the bad news is - they are also much more susceptible to massive losses in value than things with real worth.  How much has a pound of rice changed in value over the last decade or two or three?  Take out an inflation adjustment factor and the answer is probably "none at all".  These things are reasonably stable.  But things with imputed or implied worth - well, their prices can go wildly and unpredictably up or down at any time.

Are stamps an item with real worth or implied worth?  Well, in some cases - uncancelled stamps that can still be postally used, they do have real worth, although, in the US, we have the seemingly ridiculous situation where many older issues that have a postal value exactly equal to their face value have an actual retail value lower than their face value!  This is for two reasons - because of the "convenience" factor and because of the "cost of sale" factor.  It is inconvenient for a person to have to make up a postage value by affixing two or three stamps to an envelope - they'd rather just put one stamp of the exact value on, so this diminishes the actual "value in use" of the older and now nonstandard denomination stamps.  The other thing is that there are costs and hassles involved in trying to sell a bulk lot of old stamps, and so this too devalues them below their face value.

Well, if uncancelled stamps have some real value, what about cancelled stamps?  Plainly they have no remaining real value at all.  Their only value is an implied value.  Even gold and diamonds have some underlying real value, but cancelled stamps have no underlying real value whatsoever.

What about the implied value, then?  What makes this go up and down?





This page last modified on May 15, 2010