9. Stamps - The Investment

Financial theory, much like political or military theory, evolves over time. The past is usually quite clear, but the future is exceedingly difficult to hypothesize about, let alone predict. All of us are so involved in the current investment strategies that few are able to step away for long enough to see how the economy is changing.

For example, in England for decades before 1850, among the best investments were forms of interest-bearing bonds. In a non-inflationary economy, 5 percent per annum interest was not a bad return. And the English tax rate of that period was so low that the 5 percent netted the investor only a little less than that. For the individual investor, probably the greatest opportunity for a large-yielding investment return since the advent of insurance trading companies to ensure trade with the East was the invention of the steam engine. Huge economies could result because coal and wood would now do the work of men and horses. But the machines had to be built and fuel had to be dug, and this presented tremendous opportunities for capital. Perhaps the greatest fortunes ever made were done so in both England and America financing and producing the Industrial Revolution of 1800-75.

At any moment in time, there are wonderful opportunities on the stock market. But, on the whole, over the last twenty years the shares of most companies have been comatose, and there is little certainty that future movement will be upward. The high-technology stocks have been in vogue, but they are short-term strategies and are good only until some higher technology stock comes along. The oil stocks have grown tremendously in the last ten years, more as a result of inventory profit and higher volume due to higher prices than because of any intrinsic managerial excellence. And with few exceptions, the oil companies are even having trouble investing in other areas of the energy production field, so that profits will remain strong long after petroleum ceases to provide the overwhelming percentage of our total energy. The oil companies seem to act like the landed gentry of old, sitting pretty on top of their estate, built years ago, raking up profits that they have had little to do with earning.

Even if you are a smart investor, the tax rate in the United States and in most of the world, when combined with the inflation rate, makes it extremely difficult for a person with capital to stay even, let alone get ahead. This is why companies have shifted income disbursement patterns from dividends to income retention (and expansion) so as to produce greater net worth. The higher net worth of the company hopefully results in a higher share value, which allows investors to take their profits at capital gains rates when the stock is sold, rather than as prejudicially taxed dividends. This is unfortunate, as companies that are expert in some area of business and technology are often quite inept at others, and only expand into other areas because of the pressures produced by the tax code.

Gold is an extremely popular investment today, and because of the uncertainty in the world, will probably continue to be so. But it must be remembered that in the 100 years between 1860 and 1960 gold proved itself to be a very poor investment, the price only a little more than doubling in a century-- an uncompounded rate of 1 percent per year, which could easily have been quadrupled at any bank. Gold buyers continue to hope that hard money will someday be the choice of world government; but short of monetary collapse, it's hard to imagine any government voluntarily advancing this position. After all, money is a commodity, and government is its producer. The ability to print money gives governments great power, which they will probably always retain.

Stamps As An Investment

For the last eighty years, the investment potential of fine collectable stamps has not been lost on the worldwide philatelic community. Numerous references to the elementals of supply and demand and their effect on the burgeoning stamp market are found in English journals in the 1890s, and in American journals not much later. For the last decade, stamps have been an excellent investment medium, with rare United States stamp prices increasing at an average compounded rate of 15 percent. In 1979 the rate was 40 percent. It is difficult to go back and evaluate prices of eighty years ago to see how stamps fared at the turn of the century. For one thing, grading standards were much less strict, and auction catalogues frequently did not grade stamps at all. Thus, we have a record of widely varying prices for the same items. However, just using the Scott catalogue price (which represents the average price of what would be considered a fine specimen of a particular stamp), a broad selection of the most commonly traded scarce United States stamps shows an increase of about 100 between 1900 and 1981. Foreign stamps, at least those from major collected countries, have done as well, and in some cases substantially better.

The Disadvantages and Advantages of Stamp Investing

There are both advantages and disadvantages to stamp investing. Many of the disadvantages are not readily apparent, so they will be discussed first.

Stamps are perishable: After all, they are made of paper. And unlike stock certificates, which are also engravings on paper, stamps do not represent or give title to an item of value. They are in fact, like art, the item of value themselves. Stamps can be affected by light, heat, and humidity, and must be stored in a proper place. Though one can, and should, insure stamps against destruction and theft, it is extremely difficult to insure them for wear and tear. Many investors place a stamp in their safe-deposit box immediately after it is purchased so that the handling danger may be mitigated. With proper skill and practice, though, anyone who can tie shoes can learn to handle stamps properly, with little danger of man-made faults. But remember, nibbing a perforation even slightly will adversely affect value.

Stamps are not "leverageable": Many investors, especially those who dream of making great killings, prefer to increase the investment clout their money gives them. This is often done by leverage, which cannot be used for stamps. But most stocks can be margined up to 50 percent of their value-- a form of leverage that means if you buy 100 shares of General Motors at $100 per share, you need only put up $5,000, not $10,000, which is the cost of the stock. The brokerage firm will lend you the rest, usually near or below prime,, and keep the stock for security. Suppose the value of the stock goes up 20 percent in a year (excluding interest deductions and dividend payments, which later the subject a bit), you have made $2,000. But when you figure the $2,000 was made on an investment of $5,000, which is all that you had to put out, your effective yield is 40 percent. Think of "leverage" as a shorthand way of referring to the use of borrowed money where the object purchased is the collateral. But, of course, leverage, like a pendulum, can drift both ways; you may find a relatively small drop in a highly leveraged investment, such as the commodities market, wiping out your entire investment in a very short time.

Anybody who has ever bought a house and paid for it with a mortgage has used leverage. In fact, if it were not for the high degree of leverage available to homeowners (that is, the low down payment of only 20 percent in the total amount of purchase), home ownerships would not be nearly the fine investment it is thought to be today. When prices rise, there is nothing so financially rewarding as working with someone else's money. But of course, screws do turn.

And the inability to leverage stamps as an investment means that the pure investor, who would buy potato spud futures in Chad if they were the best investment, has not entered the stamp market. For stamps must produce yields greatly in excess of leveraged investments in order to be competitive with them. So as long as the strict investor stays removed from the stamp market, collector pressure will push up stamp prices, but with nothing like the velocity that we would see if the potato spud bugs got into the game.

Stamps could be a disorderly market: Because stamps have no intrinsic value other than their face value, which is usually quite negligible, there is a risk in an economic downturn of having a commodity for which there is no buyer. This is mentioned as it is a fear of investors, although it has never actually happened. During the Great Depression of 1929-39, stamps lost a percentage of their value, but never reached the depths of common stocks. A their nadir, most stamps sold for about 65 percent of the pre-Depression price, compared with the Dow Jones average reaching about 10 percent of its pre-Depression price. So while it may seem that stamps might be unmarketable in a depression, the one historical test indicated that virtually everything was unmarketable in the Depression, and stamps were better than nearly all conventional investment items.

Stamp investing is not for everyone: It is not for older people who need dividend income to supplement social security and pension income. Stamps are not a good short-term investment, either. The spread between what you buy an item for and what the same dealer will pay you for that item is high, usually at least 20 percent, and often quite a bit more. But have you checked stock-brokers' fees for small share trades of a few hundred dollars? And that is the level at which most stamps are traded. Stamps are still an old-fashioned hobby business, and though this is slowly changing, dealers still work on the old, low-volume, high-markup principle so prevalent in the hobby world. True, too, is the fact that each stamp must be graded individually and this is a time-consuming process.

Right now a plan is germinating in a number of people's minds for a closed-end mutual fund that would invest in stamps. Basically, the fund would be capitalized by issuing shares, which would then be publicly traded, based on the value of the stamps that are owned. An amount of trading would be done by the fund, of course, so as to liquidate items that have already made their upward move, and replace them with stamps that are so poised. The fund could function as its own sales operator, buying and selling directly, and so could lower its purchasing and liquidation expenses. This idea has seen discussion over the last couple of years, and might soon become a reality.

People who have made large profits in stamps share several distinctive traits. By and large, they are people who have maintained modest collections throughout their lifetime and who, at about the age of forty or fifty, because of rising income and declining real expenses, begin to have more money (and time) to put into their hobby. They usually buy stamps primarily as a hobbyist, but they are generally optimistic about stamps as an investment. They plan to hold their stamps for at least ten years.

There are several advantages to rare stamp investing:

Rare stamps are truly rare: On an average day, 250,000 shares of Boeing are traded on the New York Stock Exchange, which represents about $10 million changing hands on a single day's trade of a single stock. Ten million dollars placed in the stock or bond markets means very little, but in the rare stamp market, $10 million is a huge amount of money. To buy nearly every United States tamp issued to 1890 (not one of each, but every one!) would cost but a few hundred million dollars (at 1980 prices), just 10 percent of the dollar amounts purchased on the New York Stock Exchange in a single day. Of course, as the buyer of the stamps came closer and closer to this goal, price rises would push the attainment beyond his reach. But even so, rare stamps are incredibly rare. Items of which only a few thousand exist often sell for a few hundred dollars and seldom for more than a few thousand. The stamp market, despite phenomenal rises over the last decade, is looked at by some investment people as a fantastic new field where prices have only just begun to rise.

A work of art: Philately is one of the few investments where the buyer can reap aesthetic as well as financial rewards. Many people have turned to rare stamp investing for strictly pragmatic, financially remunerative reasons, and have ended up becoming hardened philatelists for whom the investment potential of stamps became secondary. The irrational love of stamps is one of philately's greatest investment strengths. For it means that when short-term market fluctuations push down the price of a certain stamp, or when a stamp reaches a price plateau at which it appears it will remain for a few years, there is no rush of sellers to further depress prices because the holders of these stamps are keeping them for more than pure investment reasons.

Some investors love philately's tiny size: The large pension funds, mutual funds, and trust funds are in virtual control of the stock and bond markets today. Philately remains one of the few areas in which an investor with as little as $50 per month to spend can assemble, over the course of years, a significant holding of great value.

How To Invest

All the desire in the world will not get you very far in stamp investing without the knowledge to go with it. And unfortunately, as with every field, there is no easy way to obtain knowledge. But there a few shortcuts.

Beware of price shopping. Price shopping is an excellent way of saving money when you are searching out a brand-name dishwasher, but it can be dangerous when you are buying a stamp. Suppose you see the same stamp graded the same way by two stamp dealers, but one is hypothetically priced at $500 and the other at $300. The novice's brain will be hearing, "I've got a bargain," whereas the more advanced collector-investor will only hear, "Danger..." In the highly competitive stamp business, it is unlikely (not impossible but unlikely) that two stamp dealers will have high-grade philatelic material at such widely varying prices. Variations of 20 percent may exist, but much more is improbable. Be especially careful if one price is much lower than the prevailing price usually charged for that item. No doubt the dealer with the very low price will proudly tell you that his is so low because he recently rooked some widow. But even if the dealer does have the smell of a skunk, is it realistic to assume that he would pass on the results of his dishonesty to you? More likely, it is not only the widow who gets ripped off. People who are sold repaired or altered stamps usually paid no more for the stamps they bought than the stamps were really worth. It's just that the buyers thought they were getting a bargain.

A collector-investor's stamp room should look like a library. He should subscribe to stamp papers and magazines, auction catalogues (with prices realized), and price lists. There is no substitution for knowledge.

Two Investors

Frederick Small was, like many others, a stamp collector during his childhood in Australia. But when he went off to fight in World War I, his parents gave his collection away during some general house cleaning. To Small, it was no matter; the collection was virtually worthless.

As an adult, Small had no interest in postage stamps, but he believed that they possessed investment potential. He remembered the catastrophic inflation of the 1920s, especially in Germany, where currency became almost worthless. Wheel barrels of money were required for food marketing, and inflation was so rapid that employees had their salaries renegotiated twice a day. The mark went from 3 to the dollar to 3 billion to the dollar in three years. That's inflation!

In 1940, Small turned to a philatelic investment counselor whom he trusted. He began to collect British Guiana not because he liked the stamps of that country, but because the country appeared to him and his adviser to be undervalued at that particular point in history. Collecting, like clothing, has its fashions, and it is rare for any country or stamp to remain permanently out of favor.

The decision to collect British Guiana was also affected by the fact that the country issued the rarest stamp in the world-- the unique One Cent Magenta. Small bought the stamp in 1939 for around $50,000. He sold it in 1970 for $280,000 at public auction. Even after commission, he realized a profit of over 500 percent, exceptional in the low inflation period of 1940-70. The syndicate of Pennsylvania investors who resold the stamp in 1980 for $935,000 gained over a half million dollars in ten years, more than enough to cover the inflationary decade of the 1970s. But Frederick Small was never a collector. "I didn't consider my stamp collection as a hobby," he said before his death, "but as an investment, just like shares of stock." Neither did the Pennsylvania syndicate consider the collector value of this stamp. They, too, were hard-nosed investors looking for a profit.

Roger Demmy was different. He was not a wealthy man, but he loved stamps. He had been collecting them since 1905; he saved every one he had ever gotten, and he was obstinate enough to collect just the countries he liked. In the 1930s, Demmy bought first issue Japanese stamps. This was the era of "yellow peril" fever, and dealers were happy to sell Demmy all of the classic Japan that they had for 10 cents and 15 cents each. Today, these stamps sell for upward of $300 each. Demmy had hundred of them.

Demmy worked all of his life as a night watchman at a chemical plant in Chicago. He was a serious philatelist who also collected Sweden and Great Britain. Until 1960, Demmy never spent more than $20 a week on his collection. When he died in 1975, his stamps were worth over $200,000. The reason-- simple! He bought stamps for virtually nothing that increased in value thousands of times. Not foresight as much as luck; even if Demmy's stamps went nowhere, he would have loved them anyway. But he bought classics, rare stamps for which there was demand

Small and Demmy represent different investment positions. One is the pure investor, the other the hobbyist. They both made substantial profits as they each learned what they were doing, sought expert advice, and had long-range plans.

Investment Strategies

Since 1960, people have become involved with stamps who have little interest in them as philatelists, but rather have an active interest in them as investments. Such people have usually approached stamp investment in one or more of the following ways.

Creating A Collection

Some investors used to look askance at creating a collection. After all, they would tell you again and again, they were not collectors. After a time, however it began to be apparent that making a collection was not only fun, it had some pretty smart investment strategy associated with it. First of all, simply buying stamps that are touted in the philatelic and financial presses has risks. Only stamps that are available in quantity or have already made a significant wave are ever mentioned in the media. This makes sense-- the media are only interested in facts, so far as they can tell them, not hunches. But the best investment ideas for the future are only hunches today. Rare stamps that have not yet made their move are often offered to a collector because there is no investor market for them yet. They can be bought advantageously then. Furthermore, by creating a collection of a country or even the world, an investor is, in essence, spreading his risk. It's nice to have zeppelins when they jump from $3,000 to $6,000 a set. It's not so nice to have them when they hold steady for a period of time or even fall in price. A collection of 1,000 stamps made over a period of years has, at any given time, stamps in it that are going up and stamps that are stable. And when liquidation time comes, what is to prevent you from selling only that part of your holdings that you believe will show low growth for the near future and holding that part that you most believe is going to rise further?

Most investors who create a collection as a safe philatelic investment also combine it with a little old-fashioned speculative hoarding as well. Every philatelist has some favorite stamps that he believes are going to go up. Even the most dogmatic adherent to the theory of spreading your risk buys a few of his favorites. Remember there are several hundred quality investment stamps in United States philately alone, and the economic history of these stamps over the last eighty years indicates that some of them are always moving quite substantially. A spread holding might miss some spectacular growth that can be produced if the investor buys absolutely right; but a spread holding, the history indicates, has always risen in value.

Cornering The Market

Another investment strategy is a modification of the old cornering-the-market theme. This is for high rollers only, affords considerable risk, but also can be used to advantage by astute speculators. Essentially, the scheme entails buying all of a specific philatelic item that you can and through this means pushing up the price. For example, you and some partners decide that zeppelins selling at $5,000 a set are too cheap, and you purchase all that you can at that price. Approximately 250 sets come on the market each month, so you can see that his would take some money. But the nice part about this plan is that you don't end up buying all of the sets (indeed, usually only a fraction of them), because at every increased incremental level there are some sets that sell to collectors and other investors at slightly more than you are willing to pay.

There are several problems with cornering the market. First of all, as the price increases, your money purchases fewer and fewer of the items that you are trying to control. A the same time, because of higher price levels, collectors who bought their sets years ago seek to liquidate at the new higher level, thereby increasing (sometimes dramatically) the number of the particular stamps that are offered each month. As a general rule of thumb, if you are considering cornering any philatelic market, assume your capital needs as follows: You'll need to be able to buy about 20 percent of the known supply of the item, at a price that you should assume will average out to be about twice what it was when the item started.

Actually, the cornering-the-market game is much more profitable to the side players than it ever is the chump who sticks it out from beginning to end. By watching price movements, and determining whether a control group seems to be developing, a sophisticated investor can buy along with them, liquidating with most profits well before the bubble bursts. Remember, in stamps as in most other investments, those seeking big profits usually received for their efforts big losses; whereas those who are satisfied with more prudent results often do quite well.

The Study of Stamps

But there is another almost foolproof stamp investment strategy. It is not for everyone, as it requires patience and knowledge: the scheme requires an investor to immerse himself totally in the study of stamps and find a philatelic specialty that really excites him. The clever investor then obtains all the auction catalogues he can, visits stamp shops, and slowly acquires interesting items for his collection, which he mounts and displays. The stamps and covers in a specialized collection often have a symbiotic relationship to one another: two $50 covers next to each other frequently produce a $200 page. The clever investor makes his collection over a period of years, and sometimes so fools the world into believing that he loves his stamps as a hobby that he fools himself as well. Then he does some very uninvestor-like things like turning down huge profits on his collection because he loves it. More and more, investors are discovering that while they came to philately for the profit, they stay for the fun.

Myths Of The Stamp Market

When people read the Salamon Brothers report, which maintains that stamps were the third best investment over the decade of the 1970s, ranking behind oil and gold, they expect to see a high percentile increase in the price of stamps on a year-to-year basis. Such an impression is misleading. Most people who avidly watch stocks or commodities know that investment items trade in a relatively narrow band most of the time. Then, for whatever reason-- good news in the case of most stocks and bad news in the case of most commodities-- they sometimes shoot up 20 to 30 percent in a very few days. And often they jump down the same way. Slow, steady progress in financial matters simply does not occur in the trading, though the long-term results may make it seem that way.

Stamps are much the same. A stamp will trade in a very narrow band, then in a matter of a month or two move up 50 percent or more, to remain relatively quiescent for the next interval. This much we now about the stamp market. What we don't know are the two things we most want to: we do not know when a particular stamp will move, and we do not know how much it will move. But we have a theory. The collector is in reality the stamp market. It is he, for whatever irrational reasons, who buys this otherwise worthless piece of paper and puts it in an album never to sell it until dotage or death. One group of market analysts watches the larger stamp dealers, who sell primarily to collectors, to see what they have in short supply-- for it is collector demand that has pruned these dealers' supply. Such items usually go up in price. Theories on how much a particular item will go up once it has begun its move abound; unfortunately, they do not predict much better than chance.

Some people live with the mistaken notion that you have to be rich to invest in stamps. Now there are many different evaluations of which constitutes rich. The average family income in the United States in 1980 is almost $20,000. If you are average, and you have kids in college or braces (or, God forbid, both), you probably do not have enough money left over after expenses to invest in a movie and popcorn, much less stamps. But as your children gradually go onto someone else's payroll, and your home mortgage in real terms begins to demand less and less of your take-home pay, even a person of modest means can invest in stamps.

If someone can spend even $20 a month on stamps, he can derive a reasonable investment return from them in addition to the pleasures of collecting. From a strict standpoint of investing, a person spending only $20 per month should never buy more than one or two stamps each month. When you purchase lower-price stamps, you are buying almost all dealer handling. To prove the point, modern United States plate blocks, which most retailers sell at prices ranging from 85 cents to $2, sell wholesale in quantity for just a fraction over the face value of the stamps. To a collector, this does not matter; the later stamps that he buys-- which are cheaper and the price of which represents mostly labor-- he chalks up to his hobby. The earlier stamps that he has-- which are expensive and have significant growth potential-- he chalks up as an investment.

Stamps are an exceptionally poor short-term investment. If you go to sell your stamps, you will often get only 70 percent or less of their retail or resale price, which is considerably lower than conventional investment instruments. If you sell your stamps at auction, the commission will end up being 20 percent of the ultimate sales price, so you see that a relatively long holding period is the only way stamp investments will work. When you buy a stamp for $100, it is immediately worth $70 or less; and even with 15 percent per annum growth, it will take nearly three years to pull up again. But by compounding, assuming the 15 percent per annum holds, you should be able to sell the same stamp for a 40 percent profit after five years, and 175 percent profit after 10 years, all taxed at the preferential capital gains rate.

What Not To Invest In

There are billions of stamps, and only some of them should be part of a reasonable investment strategy. In general, investors should try to stay away from the new issues of any country, be it United States or foreign. Many people have made huge gains by buying up quantities of modern, newly issued stamps that have later turned out to be scarce. But the risks are too high, and the possibility of postal authorities reissuing the stamps if supplies run short always exists. If an investor had bought every new issue since 1960 from major countries, he would still be unable to sell the entire group at a profit. And that is true even though many stamps have sprung up in value. The bulk of philatelic items, perhaps 95 percent or so, never show any significant financial gains.

Above all, stay away from United States new issues. There is an appeal to some investors in purchasing mint sheets from the United States Post Office, in that the sheets have a certain face or postage value, and so the investors assume there is little downside risk. And this is true. But there is little growth potential, either. Since 1950, out of the over 900 stamps that the United States Pot Office has issued, all but perhaps 30 sell for either a few percentage points above or below face value. The reason for this is that mint sheets seem like such a perfect investment to people that thousands buy them, creating a supply that is far in excess of demand. Stamp dealers routinely use the stamps from the 1950s on their mail as they cannot sell them in quantity at even face value. And if dealers cannot sell these mint stamps at face value, you can bet they will pay a lot less than that if you come to sell them.

There has been a great deal of general media publicity and advertising recently over a whole variety of specially prepared, illustrated, even personalized first-day covers. Such covers have a price of between $2 and $4, and are mailed monthly to subscribers as the stamps come out. The first-day cover clubs produce a handsome, artistic, and educationally satisfying product. Unfortunately, the investment potential of these particular first-day covers is small. A collector can service his own cacheted first-day covers, through the United States Postal Service, for about 50 cents; the wholesale value of first-day covers in quantity when bought by a dealer is about 35 cents each. When bought at this price, there is some investment potential. But when purchased on subscription from the national "clubs" that offer them, the covers must increase in price over 700 percent before you can get your cost back! Furthermore, should you decide that the convenience of the clubs is worth the expense, avoid the temptation to "personalize" your first day covers, that is, to have your name and address placed on them. America's modern penchant for labeling everything from eyeglasses to dungarees does not find favor with philatelists. Addressed first day covers since 1945 have traded about 50 percent of unaddressed.

For investment potential, as a general rule, investors should stick to established, responsible countries such as (though not limited to) the United States, Canada, Western Europe, the British Commonwealth, and Japan. These countries have a strong base of native collectors, who have created an intrinsic demand for their indigenous stamps through strong and weak economic times. There are many countries now, in Africa, Asia, and Latin America, that use their postal services in an attempt to earn foreign currency. The stamps routinely commemorate American, English, and European events, even though these countries just as routinely frustrate our goals in the United Nations and on the world scene. The stamps are attractive and for the most part well designed and executed. But they are produced solely for export; there are few collectors in those poverty-stricken nations. So unless worldwide collectors reverse their 140-year trend of preferring the stamps of their own nation, there is little likelihood that the $10 and $20 face value sets of most third world countries will enjoy booming resale.

Ultimately, the future of stamp investing comes down to the future of stamp collecting. Stamps have no intrinsic value and no commercial applications; their value is all perceived value as a collectable. Several factors do seem to point to a stronger and stronger collector base in the industrialized world. Stamp collectors break down into essentially two age groups, the teens and the over forties. While some people retain an interest in stamps throughout their life, the pressure and constraints of career and family building during their twenties, thirties, and forties makes most collectors' interest passive in these years. They begin to collect again the later third of their life-- and it is this group's demand that has caused the increase in stamp prices. The simple demographic fact of the post-World War II baby boom means a gigantic increase ahead in people with the time and means to resume collecting. This group will make the period from the 1980s into the early part of the next century the golden age of philately, even if increased publicity makes them collect in no greater numbers than did the generation preceding them. We should add to this the fact that women seem to beginning to create collections of substance and value for the first time. Previously, though many women collected stamps, they were rarely serious collectors or investors in rare stamps. But this situation has begun to change radically.

It is the opinion of most people who counsel stamp investors that philately is not the best investment. It has problems of leverage, storage, and high spreads between bid and ask that many alternate investment forms do not have. But stamps do not have to be the best investment, for they are not, in the final analysis, primarily an investment. To most people who collect and invest, they are primarily a hobby in which the hobbyist may receive a financial benefit in addition to the benefit conferred by the hobby itself. Of all the hobbies, only the collectables offer their pursuers psychological satisfaction as well as pecuniary gain; and of the collectables, none offers more of both than stamps.

Investment Advisers

As stamps become a viable investment, it is natural that a variety of specialized investment advisers have grown up. If you subscribe to some of the stamp newspapers and magazines listed in the bibliography, you will see the advertisements for these; other investment advisers are beginning to solicit clients on the business-pages of local newspapers and in the financial press. It is very difficult to ascertain the expertise of any of these advisers. Like economists, these people must make predictions based on inadequate knowledge about the future. And further, even an excellent record of predictions in the past is no guarantee of success for the future. Generally, philatelists who have done the best in stamps have done so because they themselves have acquired a good measure of philatelic knowledge. Some choose to use the investment advisers as well, but prudence would seem to dictate giving no one carte blanche with your money.

Philatelic Organizations

It is hard to imagine a more organized group of people than stamp collectors. There are tens of thousands of local philatelic clubs, and probably over a thousand large-scale organizations worldwide. Some of the large ones are listed below. All clubs welcome new members in the spirit of international friendship and cooperation. After all, that's what stamp collecting is all about. By writing to any of the following organizations, a collector can find out what the membership procedure is.

American Philatelic Society, Box 800, State College, PA 16801

The largest collectors' society in the United States, with over 50,000 members. A host of services are available for a modest membership fee. A free brochure is sent on request. Every collector should belong-- their monthly magazine, The American Philatelist, is excellent.

Society of Philatelic Americans, Box 904, Wilmington DE 19809

Originally developed in the 1890s as a southern alternative to the American Philatelic Society, the SPA used to stand for Southern Philatelic Society. The name was changed in 1922, and today the SPA is a national society. Smaller than the APS, but offering much the same services.

American Topical Association , 3306 N. 50th Street, Milwaukee WI 53216

A large organization, devoted to the promotion of topical or thematic philately, it is made up of people who simply collect, say, cats on stamps, or complicated aero-philately, or arctic exploratory themes. Offers much the same services as the above two national societies, but with a topical twist.

The Collectors Club , 22 E. 35th Street, New York, NY 10016

This is a small society, based in New York, made up of America's most serious collectors. Their magazine, The Collectors Club Philatelist, is a technical journal. There are two meetings a month, and nonresidents are encouraged to join, if only to get the magazine.

American Stamp Dealers Association , 840 Willis Avenue, Albertson, NY 11507

ASDA membership is limited to stamp dealers who pledge to a strict code of ethics. Dealing with the ASDA members is a collector's surest guarantee of fair play. Information on members is available from ASDA.