The World's Biggest Philatelic Market Discovers Foriegn Stamps

The best news for 2012 is the realization that the largest philatelic market in the world, the Chinese market, has begun to expand its horizons. Philatelic markets mature like people do. Newer philatelic markets are narrow and collectors in these markets rarely show interest in stamps beyond their own country. As the markets mature the collectors tend to expand their interests. They do this for two reasons. First many of them have soon acquired all the stamps that they want and can afford of their home country. And second, as collectors mature they begin to see the appeal and specialty interest in the stamps of other countries. We began to see this in the Russian and Eastern European markets in the 1990's. Long dominated by home country collectors, the Russians, in particular, began to collect the stamps of other countries so that they have become major buyers of scarcer British Commonwealth material. This is because of intrinsic specialty interest but also a way for collectors to divest their philatelic holdings from home country markets that are volatile due to economic and currency concerns. Increasingly, mainland Chinese collectors seem to be doing the same and 2011 has marked the first year where we sold good amounts of non Chinese stamps to that country. If this pattern holds, it bodes very well for our hobby.

Classic India

When you buy a house or a car there is a cost of production involved that provides a floor as to the price. If housing prices drop to below the cost of producing homes people will stop building them, supplies will contract  leading to price increases that will allow production to resume. At least that's the theory. So the housing market or the automobile market is not a perfect market in terms of supply and demand because supply is influenced by the cost of production. But the stamp market  is a perfect economic model of a market. Older stamps that can not be used as postage really have no value except for what collectors are willing to pay for them. They can't be used for anything or consumed in any way. The early stamps of India are a perfect example of the fact that stamps are only worth what people are willing to pay for them. Compare the classic mint stamps of India with the classic mint stamps of China. Dealers see five or ten times as much classic China as India and yet the former sells at prices of ten times as much. I think the answer has to do with free(ish) rather that controlled political systems. The Chinese are trying to pull off a political/economic coup that has never before been successful-a controlled political system with free market capitalism. Wealthy Chinese are frightened and are hedging their success in things other than currency and stocks. The India stamp market is a pure collector market. It should continue to perform well as India completes her transition to a major economic power.

European Catalogs

There are three main Foreign catalogs for the non English speaking European specialties-Michel for Germany and German Area, Yvert for France and French Colonies and Sassone for Italy and the Italian Area. Michel is the Mercedes of catalogs with hundreds of thousands of specialized listings in all phases of German philately with covers, blocks, paper types and cancellations all addressed and priced. Michel Deutchland Specialized is the prototype of what a specialty catalog should be and no other country's specialized catalog comes even close. Yvert's France and Colonies catalog is good, handles well though without much excitement or acceleration-sort of like a Peugeot. Yvert's listing often go little beyond Scott (especially the wonderful Scott Specialized) but still overall is a capable model. Sassone, the Italian catalog is sort of like a hybrid Maserati/Fiat. Some sections are excellent (modern printing varieties for instance) and it has thousands of listings that are beyond Scott. That's the Maserati part. The Fiat part is no index, lack of consistency in listings (certain types of varieties are listed for some areas but not for others) and crazy high, often meaningless pricing. In years before Bablefish all of these catalogs could sometimes be daunting to use but now there us no reason for a serious collector not to have at least an older edition on their shelves. Especially when older editions can be bought reasonably on EBay.

Valuing Modern Mint Stamps in Hinged Condition

The Scott catalog prices for most countries after 1940 is for stamps in mint Never Hinged condition. This is for three reasons. First, most post 1940 stamp are more common in NH than in hinged condition (especially as you come closer to the current period in time). Second, most collectors have been trained to believe they want NH stamps. And third, the foreign catalogs from which Scott steals its prices only list their stamps in NH condition. So the question often arises about how one should value foreign hinged stamps in the modern period. As auctioneers our experience has given us the following answers to this question. The effect of hinging on mint modern stamps is more significant the further you go back to the 1940 cutoff that the Scott catalog uses. Stamps from most European and British area countries in the 1940-1960 period sell, in hinged condition, for 1/3 to 2/3s of their NH price. As one moves closer to the current period the ratio of hinged to NH price gets closer so that when we sell mint collections of the last twenty years it doesn't seem to matter much if the stamps are hinged or Never Hinged. I suspect this is for two reasons. First, the quantities of mint stamps from the last two decades is small because so few were put away and they haven't recycled through the philatelic resale market yet. Because so few were put away collector demand is high and so hinging matters less. And second, the face value of modern stamps is a big determinant of the price, with the Scott policy that many modern stamps catalog at twice their original face value. With stamps that have a high postage value relative to cost, hinging doesn't matter at all as you can apply a hinged stamp to an envelope as readily as a never hinged one.

Sales Tax

2012 may be the year when the sales tax exemption that most philatelists enjoy when they add stamps to their collections ends. The current sales tax code in most states does not formally exempt postage stamps from sales tax but rather exempts sales of products that travel across state lines when the merchant lacks a physical presence in the state that he is selling (which is how most stamps are sold). This exemption has fueled the growth of mail order selling and now Internet selling and has been actively opposed by most states who are desperate for revenue. The reason for current mail order sales tax exemption is that under our Constitution only the Federal government has the right to regulate interstate commerce and so mail order sales from one state to the next fall under the bailiwick of Congress to regulate and tax. But under pressure from the states, Congress may well act next year.
          The bill that is currently the front runner will allow states to levy sales taxes on interstate sales if they agree to streamline their sales tax codes. Currently there are thousands of different exemptions and tax rates by state, county and often even smaller municipalities. The difficulty of a business say in Jenkintown, calculating, collecting and remitting thousands of different taxes has long been a critical argument against modifying the status quo. In exchange for the streamlining, companies with out of state sales of over half a million dollars will be required to charge and collect sales tax and remit it to each state. If this bill passes it will add to your cost of your stamps if you are a collector. If you are a dealer it will add to costs of  doing business. Collecting the tax demands a high level of computerization and the use of an outside service, like a payroll service, to administer your sales taxes. It will very troublesome to small businesses. I write about this now as 2012 is an election year, and one that is set to be unusually contentious. In election cycles like this one candidates are unusually receptive to constituent concerns. If this change is something that you don't want it would be wise to follow the issue as the year progresses and contact your senator and representatives.

2011

The philatelic market has always had four quite different aspects. There has been the entry level market which consists of lower priced stamps, mint US postage type material, approvals and the like. This appeals to and is geared towards newer collectors, younger collectors or collectors of modest means. There is the high end market which is comprised of rarish and more expensive stamps and covers which I usually (and rather arbitrarily) define as stamps selling from $250-$1000 per stamp or set. There is the rarity market, stamps above a thousand dollars each but really more the $5000 and above market. And there is the mid market, stamps in the $10-$250 range. This year the stamp market has performed quite unlike I remember before. First, the lower end market was weak, postage type material was soft and lower prices sets were very hard to find dealer buyers for. This indicates that sales of material at this end of the market were languishing. This is probably a reflection of the recession with high unemployment and lower incomes keeping newcomers away from new hobbies. It is also a reflection of philately's continued difficulties in attracting younger collectors. And the rarity market was very soft too. The auctioneers at the highest end of the market had lower and sometimes much lower sales as buyers dried up and well heeled collectors were reluctant to offer their stamps during the Great Recession. There was a real dearth a great "name" sales this year. But though the higher and lower end of the stamp market were weak, the two main mid range areas-stamps selling between $20-1000 was overall quite good. We saw a lot of activity and not just for the highest quality ( When you see strength in lower quality stamps it is an indication of overall strength and breadth in the stamp market). The reason for this strength in the mid range of the stamp market has three main factors. First, in this recession the wealthiest collectors have moved down market, still buying stamps but filling in some of the less expensive stamps that they need. Second, there have been many newcomers to our hobby and they are largely the predicted influx of baby boomers returning to philately. These collectors already have their old collections with many of the lower priced stamps and when they reenter the hobby they immediately begin pursuing mid range and upper range items. And the third reason why better stamps have done well is that this recession has largely hit less educated previously middle class Americans. Professionals and upper middle class workers have not lost their jobs in anywhere near the numbers that poorer people have. And with good jobs and declining real expenses now that their houses are paid off (or nearly so) and their kids are off their payroll these people have money and time to devote to their hobby.

Why We Collect

The desire to collect is innate and probably relates to the gatherer instinct that humans share with other primates. But in a world in which one can collect everything from antique barbed wire to Victorian pocketbooks, why do people collect stamps? The answer I think comes down to three factors- community, size and orderliness. First, most stamp collectors were introduced to the hobby by a relative or friend and the feeling one has about philately gets infused with the feelings one has about the early sharing of your hobby with that important person in your life. Second, one can collect at a pretty high level over a period of years and yet store the entire collection on a couple of shelves. Some other hobbies have this advantage, but few have it as clearly as stamps. Most collectibles are far larger and harder to store than stamps. A philatelic collection of thousands can be kept in one album whereas a collection of a thousand horseshoes takes up a garage. This means that a stamp collection can easily be retained during periods of disinterest (which happens with all hobbies) to be picked up again at a high level when interest returns. And third, orderliness relates to both comprehensiveness and cleanliness. Few other hobbies have catalogs and none are as detailed as stamp catalogs. Knowing what you need is appealing to collectors. And, despite what our spouses say to the contrary, philately is clean and neat compared to most collecting hobbies and fits in well with modern living situations. After all you don't collect classic meerschaum pipes. Just think how wise you were when you decided to collect stamps. You found a hobby that is neat and clean, takes up little room and can be put away for years to be returned to easily and at the same high level from which you enjoyed it before.

Philatelic Economics

A remarkable aspect of philately is that unpopularity breeds further unpopularity. It is truly unusual to see a good collection of nearly any South and Central American country. Brazil, Argentina, Mexico and Cuba are exceptions, but for the other twenty or so countries that make up rest of the southern Americas, collections that are even 75% complete for major Scott numbers are quite rare. The reason is financial but not in the way you might think. Take Ecuador, for instance. It is a country that is just below average in per capita income but with a large middle and upper middle class and several large cities (philatelic popularity is related to rates of urbanization). There are few real rarities by price among its stamps. Its issuing policy is conservative and appropriate. It should have a decent number of domestic collectors as well as an active expatriate collecting community and yet I can't remember the last time I've see a mostly complete Ecuador collection. The same is true of most Latin American countries and when you move away from major Scott numbers to the thousands of minor varieties that Scott lists, then the number of comprehensive collections moves from small to virtually nonexistent. The reason for the lack of good collections of these areas is not lack of native collectors, though that is contributory. It is simply a lack of material. More collectors couldn't collect Uruguay or Bolivia even if they wanted to. The material simply isn't available in sufficient quantities for it to be offered enough for collectors to want it. On EBay today there were less than a thousand Ecuadorian stamp items offered (and most of those were covers, odd ball items or missorted lots from other areas) compared with 441,000 US stamp lots. That's 2/10 of a percent as many. There are hundreds of lesser priced varieties that are listed in Scott that I have never seen offered-ever- in a lifetime as a professional in this hobby. Philately became popular in Europe in the 1860s and 1870s when there came to be enough collectible material for dealers to begin to promote it. Latin American philately has always suffered from such a dearth of material that collectors have found the pursuit not worth the effort.

Merry Christmas

We want to thank the thousands of Apfelbaum clients who have made this year our most successful ever. Over ten thousand of you are registered to buy from us online and last year we sold over 25,000 lots. Going forward we continue to promise you a guarantee that is without equal in the philatelic world-complete 100% money back satisfaction and a life time guarantee that every item we sell is genuine and as described. Thanks again and we wish you a healthy and happy holiday season and good wishes to you and your family for the coming year. By the way, if there are any topics that you would like to see me write about in these blog articles, let me know.

Who Died This year who Should be Commemorated on a Postage Stamp

The USPS announced this year that they were going to begin to waive the" ten year deceased" rule for commemoration on US postage stamps. Looking at the list of notable deaths of 2011, I don't think we need to worry that we are going to be inundated by a massive amount of  new issues. It seems that there are just not that many people that the USPS would consider putting on a stamp anyway. Remember, many of the most significant deaths are hardly people we are about to see on our stamps. Vaclav Havel(the Czech writer and Prime Minister and one of the leaders in the demise of the Iron Curtain) is deservedly famous but it is highly unusual to see foreign heads of state on our stamps. Kim Jing-Il is important too, but unless the USPS is planning a Favorite Despots series I don't think he will be on a United States stamp anytime soon. The Boston Globe lists the 85 most significant deaths of the last yearhttp://www.boston.com/news/obituaries/notable_deaths_of_2011?pg=85   and of that number nationality and esoterica eliminate all but Betty Ford, Steve Jobs, Joe Frazier, Henry Morgan, Harmon Killebrew, Liz Taylor and Jane Russell. Only Liz is a  definite for ten years from now and only she would have been pictured on a stamp as a living person. So I think the worry that picturing current people on stamps will create problems is misplaced. The real problem is that after nearly 2000 commemorative issues, there are not enough new persons deserving to be on United States postage stamps at all.

December 21 and 9/11

The United States Post Office has commemorated everything from baseball to rock stars, from Faulkner to Disney. We do really well at honoring our heroes and often at overvaluing the trivial. But as a nation we aren't very comfortable with commemorating or honoring our painful experiences. Our philatelic commemoration of the most painful American experience, the Civil War, has been spotty, more a selection of famous battles than addressing the causes of the war and how ending the evil of slavery was played out. The shameful end of Reconstruction has never made it to stamps nor has Jim Crow or lynching or the nearly century long attempt to continue de facto slavery. We are not very good as a society at facing what is painful without jingoistic posturing. So perhaps it should come as no surprise that the two terrorist attacks on America that have occurred in the last twenty-five years have been ignored. On December 21, 1988 Pan Am 103 was blown up over Locherbie Scotland and on September 11, 2001 a variety of attacks on New York and Washington killed thousands. And yet even ten years after the last attack there has been no attempt to honor these victims of terrorism. Sure it would be painful, but our postal policy should not just be about  Homer Simpson, quilts and flowers.

Five Hundredth Posting

When I began this blog a couple a years ago the purpose was to tell a few stories about our hobby, to talk about the way the hobby used to be and identify some of the the changes that have occurred in Philately. Little did I think that within two short years there would be 500 topics to explore and that this number would only scratch the surface of subjects that our vast hobby affords. Philatelic writing has three main strains. There is writing in the tradition of Herman Herst Jr and Earl Apfelbaum, writing that tells the history of our hobby and the personalities who have collected and dealt stamps. There is writing in the tradition of the Collector's Club Philatelist and the Journal of the London Philatelic Society (now the Royal) that treats our hobby as a serious academic discipline. And there is writing in the tradition of Linns and the American Philatelist, informative but not exhaustive-an overview of many subjects so that the reader can further investigate subjects he finds interesting. As this blog has progressed I have tried to do all three of these types of writing and have been amazed at how many topics there still are to write about. As I write my five hundredth article, thanks for reading. Over 900 readers a month enjoy these articles and it is growing by about a hundred readers a month. Since philatelic writing is usually more informative than timely it doesn't get dated so if you go back and read some of the older posts sometime, I think you'll like them.

South Korea

Especially scary about the death of North Korea dictator Kim Jong-Il is the effect it will have on South Korea. When the Koreas were partitioned in the early post WW II period, they were both equally devastated. But while North Korea has gone from poor to destitute, South Korea has been the poster child for capitalism, ending last year as the world's 26th wealthiest country (on a per capita income basis) wedged between Japan and Spain. The question for philatelists is why, given that the Koreans have become so wealthy, are their stamps are not more avidly collected and why haven't they appreciated in value anywhere nearly as rapidly as the stamps of China and India. After all, Korea has a large population that is wealthy and well educated. Philatelic proclivity is always subsumed to national character. Qatar is the wealthiest country in the world on a per captita basis yet little of their philatelic demand is from native Qataris. Philately is not a hobby that has caught the interest of Middle Easterners. So while we can never know for sure what the reason is for the relative disinterest of Koreans for their stamps compared to some other Asian countries, here is what we do know. Korean stamps have not increased much in price over the last twenty years especially compared to Chinese stamps. Very rare Korean items which would sell for many thousands of dollars if they were Chinese stamps sell for only hundreds. I think the reason are more economic than cultural. I think the citizens of mainland China are expressing their lack of faith in the Communist oligarchy that rules their country when they bid up the price of their stamps. Philately has tended to be popular in countries that have a history of difficulties with fiat currency, inflation and devaluations and I think the interest in Koreans in their stamps is genuine philatelic interest whereas the interest in the Chinese has more of hedging quality to it. This means that the price of Korean stamps will rise more slowly but more steadily whereas the price of Chinese stamps could well be subject to a bust.

Dear Leader

Kim Jong-Il has died. As leader of North Korea, he presided over his nation's continued slide into abject poverty and oppression. There are few laboratory tests in any environment that can so measure the differences in political systems as did North and South Korea. Divided after complete devastation during WW II, the North took a Maoist and Stalinist central planning model and the South a capitalist American model. The results have been so dramatic that if this were a medical study it would have been called off for ethical reasons. The South has prospered and become one of the wealthier nations in the world whereas the North has gotten to the point where most of the 24 million people who live there are starving and would die without massive food aid. Over the next few years succession issues should affect North Korea. Kim Jong-Il's heir is a twenty-eight year old boy, who has been educated in the west. Whether he will have any real power or whether he will move North Korea to a capitalist democratic model is unknown. Indeed, it is even unknown whether North Korea's leaders will move towards war with the south which, if this morning's moves on the Korea and Tokyo stock exchanges are any indication, many consider a real possibility. As far as stamps are concerned, North Korea has been a prolific issuer. Philatelists are always looking for the next China-a country whose stamps had been plentiful and where internal economic success leads to a huge increase in stamp collecting and great financial gain to the early holders of those stamps. India has conformed to such a model with its stamps rising smartly. North Korea will not join this list. It's economy is not small-it is minuscule. The people are not poor-they are destitute. Add poorly educated to the list and it would take decades of rapid economic growth to even move North Korea to the levels of a developing country. So save your money. If North Korean stamps ever begin to increase in price you will have a long warning period in which to buy them.

Quality, Quality, Quality

For many years in the property market is has been said that there are three things that influence prices and will insure investors a good return-location, location, location. Similarly, the unstated emphasis in stamp investment has been quality with the suggestion that only the finest examples of each stamp will be a good investment. This current recession has proven that belief wrong in the stamp world. Here is what has happened. In the early years of this decade high quality graded certified material saw a great run up in price. The fetishization of common stamps in "100" graded condition was ridiculous and many common stamps sold for hundreds of times what any sane collector would pay for them. This market has completely collapsed, mainly because few collectors were involved in it in the first place. That market was driven by a west coast philatelic expertization service that liked the fees it was getting expertizing for grade and by a few dealers and coin transplants who knew little about our hobby and cared less. No one mourns the passing of this aspect of quality driven collecting. More importantly though, the interest in highest quality scarcer stamps has fallen off during this recession at the same time that interest in stamps in general has remained high. Truth told, interest in Philately is strong as aging baby boomers are returning to the hobby of their youth. But these new collectors are very happy with stamps in the quality grades they aspired to get when they were younger and are very satisfied with Very Fine. We have seen the market at the top end be very weak the last few years while there has been considerable strength at the higher mid levels. Whether the highest quality will again find favor if this recession ever ends is a good question. Personally I hoped things stay as they are. My own view is that stamp collecting is a great hobby but that it loses much of it's appeal when the quality of the stamp is more important than the stamp itself.

Gum and Printing

Gum has had a long relationship with printing on postage stamps. In the pre 1930s days, flat press printing meant that sheets of paper were fed into the press one by one and then the printed sheets were hung up to dry, gummed and weighted at the corners so that as the gum contracted the stamp sheets did not curl. With the faster and more efficient printing method of rotary press, stamps were printed on rolls of paper. Hand gumming was impossible as was weighting each sheet to prevent shrinkage. The solution was to apply the gum to the sheet with ridges, sort of like expansion lines on freshly poured concrete sidewalks, which allowed a small amount of contraction of the paper from the drying gum without curling. Gum ridges were the solution used by the US Bureau of Engraving and Printing. Different countries had different answers to this problem. The German printing office applied their gum in a sprayed ridged pattern against the curl of the paper- an high tech and very effective solution, but one which makes pre 1960 German stamps very difficult to convincingly regum. The British Crown Agents printers didn't bother doing anything about the curling problem and this is why even today if you leave a set of mint George V from any colony on your stamp desk overnight you come back in the morning to a tightly curled mess. The problem in general became moot about 1960 when technological advances in printing allowed stamps to be printed on rolls of pregummed paper in which the shrinkage from the gum had already occurred and been accounted for. But as collectors go back and collect earlier stamps it is important to be aware of how earlier technology affects the stamps they are acquiring.

What Happened to H E Harris

Those of us who started in philately over thirty years ago remember H E Harris. Harris was the largest stamp dealer in the mid twentieth century, growing rapidly during the Great Depression with the Captain Tim radio show. Harris was a leading  promoter of philately with album publishing and approvals so that by 1975 Harris had tens of thousands of customers and, it was argued, made more new collectors than the Post Office itself. By 1975 Henry Harris was an old man and was ready to sell his business and the story of the demise of Harris tells us a lot about American business in the 1970s and 1980s. Harris sold his business to General Mills and as a young stamp dealer I had visions of General Mills promoting stamp collecting on the back of every box of Cheerios sold in America. But this was not to be.  General Mills ran a late twentieth century venture capitalism division and it was this unit that bought Harris. Their goal was simple. They stripped Harris of its assets, sold off the inventory, floated the publishing division and closed down the approval business. Employment went from hundreds to zero. The employees lost out, stamp collectors lost out, everyone lost except General Mills which made far more money dismantling Harris than Harris ever made keeping his company in business and his employees and collectors happy. (The model that General Mills used was the venture capital model of the time and was the same model that was used to enrich venture capitalists at places like Bain Capital). Now don't get me wrong. I am a capitalist-all stamp dealers are. But the rewards that the purveyors of what they euphemistically call "creative destruction" get seem far out of proportion to the harm that they cause. I know this story well because the same team from General Mills that bought Harris made an offer for my company in 1981. But by then it was clear what the pattern was to be. We decided to stay as stamp dealers because we felt a commitment to our staff, our customers and to our hobby and because of our fear that after they dismantled our company we would have nothing left to do.

Changes in Certification Standards

The first American Philatelic Society certificate was issued a bit over a hundred years ago and it was for a US Occupation of Cuba issue. Following the standards of the time the certificate simply said that the stamp was genuine. The first certificates took their role as "certificates of genuineness" seriously. They said nothing about the quality of the stamps, often not even mentioning if the gum was genuine or not and they certainly never graded the stamps. By about 1930 it was common to see the issue of gum addressed on Philatelic Foundation certificates, though this practice was not mandatory and many regummed stamps were passed as og. About this time too, certificates began to address the issue of quality with major repairs being mentioned for the first time. It wasn't until the late 1980's that hinging became a matter to be passed on by experts and the first NH certificate were issued by the Philatelic Foundation in the late 1980s. The greatest changes in stamp certificate history began with the creation of the Professional Stamp Expertisers certificate about twenty years ago. This for profit organization began as an offshoot of a coin expertising group that had a made a fortune in the coin grading certificate craze and began to issue graded certificates that made a big point of mentioning every imperfection on the stamp. Graded certificates burned themselves out a few years ago with huge premiums being paid for common stamps in perfect condition. Many unknowlegeable collectors and dealers bought these stamps at prices that look ludicrously high only a few years later. The evolution in stamp certification has been a slow change of emphasis from genuineness to quality.

United Nations

Postally speaking, the United Nations is an invention- an organization not a nation or political entity. The fact that it issues its own postage stamps and maintains its own postal service is a concession to the trappings of sovereignty (real political entities control their own post) and a revenue grab (UN stamps can be sold to collectors and the United States has the expense of processing and delivering the United Nations Postal Administration's (UNPA) mail). Interest in UN stamps has always been a factor of interest in and respect for the United Nations as an organization and it is safe to say that interest in UN stamps are at an all time low. The first UN issues were issued in 1948 and were avidly collected, largely by Americans. For the first twenty years of UN issues many US collectors maintained a collection of UN. It was cheap and they could complete it. After the UN began taking an anti US and anti Israel line, beginning about 1970, UN philately increasingly fell out of favor. Three things have contributed to UN's continued decline in collector interest. First, collectors have been put off by the fact that now three UN postal agencies-New York, Geneva and Vienna-all  issue stamps, making far too many issues for the legitimate postal needs of the UN. Second, the UNPA has continued to increase restrictions on the use of their stamps on mail (thus lowering the value of older postage type material). Originally, postal patrons could mail what they wanted from the UN. Now the post office only accepts smaller quantities of mail with difficult restrictions as to use. This has led to a steep decline in the value of older UN stamps to where it is hard to sell UN at 20% of the postage value. Collectors don't want to put their money into a collection that depreciates like this. And third, the investment scandal company Afinsa was gearing up to begin promoting UN before it was closed down by the Spanish government leaving a market overhang of millions of dollars of UN stamps further depressing prices. It seems unlikely that the stamps of the United Nations will ever regain the popularity they once had.

Danzig

One of the most interesting philatelic areas is Danzig, now called Gedansk. Danzig is a city or rather city state on the shores of the Baltic Sea between Germany and Poland (which was long ruled by Russia) and part of its philatelic charm is in the many issues that were created as political control bounced back between various outside nations. For most of the early stamp period, Danzig was part of Germany and used German postage stamps-first the stamps of Prussia, of which it was a part, and then after 1871 and German unification, using the stamps of Germany. After 1920 and the Treaty of Versailles, Danzig was stripped from Germany and became a free city and as such issued its own postage stamps. It is during this period that most collectors know Danzig as the country created several hundred stamp issues. The stamps are for the most part easily obtained in mint condition but the challenge is finding many of the issues in legitimately used condition and in finding the hundreds of varieties that Scott and Michel list for these stamps. Most of the varieties are modest in price compared with their rarity though they are not easy (but not impossible) to find. After 1939 and the German invasion of Poland, Danzig became part of Nazi Germany and Danzig stamps became moot. Germany maintained control until the end of WW II when Danzig was stripped from Germany and became a city of Poland. It is one of the cities that was most supportive of the Polish Solidarity movement over twenty years ago and it is ironic that the territory that the Soviet Union had insisted be stripped from Germany so as to weaken it in the post war period would then prove to be one of the factors in the demise of the Soviet Union itself. For a few hundred dollars you can buy all but a few of the Scott listed stamps of Danzig and specialty items can keep you busy forever.

End Of The Year Buy It Now sale

We have listed today our end of the year direct sale. In it are over 5000 lots available for your collection at the click of your mouse. There are lots of United States stamps, British Commonwealth including Canada and extensive General Foreign including collections and accumulations. Nearly $2 million dollars of sales value is included here with prices up to 40% off what the stamps were originally listed for. And of course each lot comes with Apfelbaum's full quality and condition guarantee and satisfaction guarantee. You should take a look at what is being offered.

The Lone Wolf Keeps a Date

The Lone Wolf was a detective series in the 1920's about a high end burglar named Michael Lanyard who helped the police solve crimes. The series was written by Louis Joseph Vance and was made into about twenty movies in the 1930's. I happened to see one recently on TCM entitled The Lone Wolf Keeps a Date. The plot is a twisted kidnapping but a key part of the story is that the Lone Wolf-a cool debonair urbane sophisticated lady killer and international jewel thief and crime solver- is a stamp collector. In the first scene he buys what appears to be a Cuba #244a, an inverted center (though the denomination was difficult to see and the movie was in black and white) which is represented as the great rarity that the Lone Wolf needs for his very extensive stamp collection (though the invert today catalogs only $650, so philatelic license was taken as to rarity). The collection is then stolen from the Lone Wolf who must solve the kidnapping in order to get his collection back. The stamps are a side plot but the fact that someone like the Lone Wolf could plausibly be portrayed as a serious philatelist tells much about how philately was viewed then and how it is viewed now. The Lone Wolf-Michael Lanyard-was the hero of eight books and nearly twenty movies having such love interests as Ida Lupino and Rita Hayworth. How times have changed. Can you imagine a Brad Pitt character being a serious stamp collector or Bradley Cooper?  Part of what attracts people to a hobby is the image it projects. Philately's image has become far more cerebral and far less cool.

Check Your Albums

Linn's is reporting this week that a collector in Sweden bought a cheap world wide collection at an auction and there was a rare syllabic character (plate number) on a 6 sen 1875 Cherry Blossom issue-rare to the tune of being worth perhaps $200,000 on a stamp that is otherwise only a few dollars. This is an extreme example of diligence and luck but there are many varieties and errors that do turn up from time to time misidentified in general collections and which can mean big finds for the average knowledgeable philatelist. Here is a few hints on what you need to know. Know the various types of the one cent and ten cent 1851-57 US. There are six main types of the one cent and four main types of the ten cent. The stamps all look very similar but can vary in price from $5-$30,000. I once found a rare 10c type mint in a cheap European made US collection that was worth $30,000 but I once missed a rare 1c type which someone later found in one of our lots that was also worth $30,000. Know the grills and on what stamps the better ones are known and always be on the look out for the rare Z grill. On Large Queen Canadian stamps check the paper of the one cent. If it is laid you have a rarity. On George VI British Commonwealth watch the perf types. Many better stamps have Scott "a" numbers and are overlooked. GB stamps of the Nineteenth Century are often used abroad and can be told by the cancellation numbers. If the cancel number starts with a letter it was probably used in a foreign post office. The Scott specialized world wide catalog lists most of these. Scott doesn't list similar cancels on France but if you have numeral cancels in the 5000's you should check them. Actually, there are few earlier stamps on which significant varieties don't exist. What would be fun to do is get an inexpensive worldwide collection from an auction (say, an Apfelbaum Auction) and get the American Philatelic Research library to send you a batch of foreign specialized catalogs and go through the lot and see how real specialists collect the stamps of each country. Even lifelong philatelists continue to be amazed at how vast this hobby is.

The Endowment Effect

The Endowment Effect is a concept in behavioral economics which states that people tend to increase their idea of the value of an item depending on whether or not they are the owner. The Endowment Effect was first hypothesized by the economist Richard Thaler and is an example of a big name for an idea that has been pretty obvious to stamp collectors and stamp dealers for many years. Apfelbaum engages to buy about 500 collection per year. These are collections from collectors who have contacted us to sell their stamps. For the most part they are the collectors who made the stamp collections so they are well versed with the quality and popularity of the material that they own and are aware of the prices that they paid for their stamps. They are, too, aware that stamp dealers have expenses and profits to make and that markups on philatelic material run a third or more. And most collectors have a modest Endowment Effect-they like their stamps and believe they have made many wise purchases over time. It is not unusual (and it is probably healthy) for collectors to have a 20-30% overestimation due to the Endowment Effect factor. But a few collectors-we call them the well endowed- have a crazy relationship with their stamps. They believe that their stamps are worth far more than they are really worth (generally simply for the reason that they are their stamps) and can in no way be persuaded otherwise. These are the same people who live in homes that have not gone down in value during the current recession.

Cover Collecting

Stamps were collected from 1840 onwards and within a few decades specialized collectors were trying to get their favorite stamps used on cover as well as off cover. But the earliest collectors collected both their stamps and covers only by country and it was not until about 1920 that the first thematic cover collectors came into being. They did not think of themselves as thematic collectors and today their descendants would recoil at the idea that they are in any way related to Topical collectors. But the fact remains that, at its core, Postal History collecting is thematic collecting. Pick a Postal History specialty -say transatlantic Mail or Civil War- and its core is an emphasis of the non-philatelic story being told rather than the stamps and covers themselves. Philately developed as a picturesque assemblage of the stamps and covers of a particular stamp issuing entity at a particular era in time, whereas thematic collecting uses stamps and covers to tell a non-philatelic story about the topic itself. In this sense it has always surprised me that traditional philately has endured as the main way philatelists collect.Thematic collecting allows more creativity and individuality, as the diversity of material available to themistmatists is vast and the story can be told so many different ways. Traditional philately is more circumscribed which is probably what its adherents want. Perhaps the reason philately has thrived is that the two main branches of our hobby offer either structure or creativity (or whatever balance the collector wishes thereof)

The Cost Of US New Issues

Hard as this is to believe, throughout the 1950's the United States Post Office issued an average of ten stamps per year with a total face value of 30c. Last year there were over 150 issues with a $77 face value. When one is tallying up where collector dollars get spent it is hard to avoid wondering what would happen to the price of older stamps if the USPS (and foreign Post Offices, which are usually not much better, and often much worse) had issuing policies that were more conservative. Over the last twenty years the United States has issued over 3500 different stamps with a combined face value of over $1700. And since most of these stamps are marketed in sheets of twenty a devoted collector could easily have spent $30,000 or more over the last two decades on his collection with the post office on new issues alone. Put this kind of money into quality United States stamps and you would produce a collection of real value. In US philately $30,000 buys used Nineteenth Century complete (except for the better grills, reissues and Special Printings),Twentieth Century complete mint (except for the rare Washington Franklin coils and types), Airmails including Zeppelins and decent other back of the book. In other words $30k can get you a pretty nice US collection which would have increased in value over the last twenty years and would stand a pretty good chance of doing well in the future. The $30,000 in postage that many people have bought now sells for about 65% of face value and will trickle down in value as postage rate increases make these stamps harder to use in coming years. The problem with philatelic prices is not inadequate demand. The problem is that traditional stamp dealers compete with an aggressive marketer of modern postal labels. That marketer has a huge promotion budget and thousands of retail outlets. Many people stop buying new issues at a certain point in their collecting lives. They would be better off if they reach that point sooner rather than later.

USPS Safety, Reliability and Attitude

A few years ago I read an article about how smaller town diamond merchants send their stock to each other by ordinary First Class mail. The article said that outside New York the incidence of First Class mail going astray is nearly nonexistent. Apfelbaum's send out thousands of packages per year, mostly through the postal service, with almost never a loss. Companies send their valuable packages out Registered or confirmed delivery largely so as to protect themselves from dishonest recipients or door men who would pretend that the package didn't arrive, rather than because of Postal Service concerns. Think about it. When was the last time you sent a bill or birthday card that didn't arrive. The reason that virtually all First Class letters reach their destination is that we have an honest, professional and relatively well paid group of men and women working for the USPS. And the pension system that so many Congressman complain about helps too. Only a fool with vested years in the Postal Service retirement plan would risk his future for a few First Class letters. Postal employees are very honest and most of them, like you and me, are usually pleasant as well.  Sure, they have their bad days like the rest of us. But what I find interesting is this: When I am in a good mood, slept well and feeling that the world is a pretty OK place to be, I invariably find kind, considerate and decent Postal Clerks. But on those days when I'm in a sour mood so too are the Postal Clerks, my family and all the other people I deal with.

Post Office plan to Slow Mail Delivery

Its hard to believe that the post office's troubles are as bad as some are saying when a simple two part solution can fix so many money issues. The Post Office announced that it is closing half of the main sorting facilities that it operates and that this will save the Post Office $6.5 billion per year. That's a lot of money. And the result is that instead of postal delivery for first class mail coming on average of two days in the postal stream it will come more like two to three. In years gone by, perhaps sensitivity to quick delivery influenced some users but today anything that is truly time sensitive is emailed or onernighted. As an additional savings, the Post Office is planning to eliminate Saturday delivery, a communication delivery service anachronism, which will save billions more. USPS accounting, like most multi billion dollar companies, is opaque and it is difficult for outsiders to penetrate into the inner workings of the organization and the cost of various components of service and goods that the organization offers. But if slowing First Class mail delivery by a day and ending Saturday delivery can save over $10 billion per year, it was foolish not to have done it long ago.

Stamp Theft

Stamp theft, despite the scare stories that you sometimes hear, is really not much of a problem. We rarely have a customer inform us that his stamps were stolen and the APS's stamp theft committee almost never sends out an advisory of a stolen collection. In the 1970's stamp theft was more of an issue than it is now and the change from stamps being an actively stolen commodity to an infrequently pilfered one tells us a lot about the changes in our hobby and our world in the last thirty years. The reason for the change is threefold. First, stamps have languished in value so that on a weight to value ratio (or "value to difficulty of fencing ratio") they are an inefficient product to steal.  High end TVs, computers and jewelry have made much more appealing targets over the last thirty years and stamps that are stolen are often taken as an afterthought of another robbery. Second, most criminals like the easy and big money and that money is in drugs. One could make the case that the only good byproduct of the drug war is that by attracting the criminal element with the rich allure of drugs we have kept most other types of property safe from the small percentage of people who prefer crime to work. And lastly, the Internet has made images of most stamps that you have bought in the last fifteen years a permanent part of the world record. This has dramatically reduced the sales value of stolen stamps because they can't be listed on the Internet as they would be recognized and a trail would lead back to the thieves. Still, you see stories of how careful you need to be about stamp theft. Most of this is just illusion. The APS insurance groups insures stamps against fire or theft for 0.3% of the declared value per year. That is $150 per year for a $50,000 stamp collection. For this they write and administer the policy, and insure against water, fire and theft (and make a profit). Based on these insurance rates its hard to believe that you have much to worry about with your stamps. You should still have insurance but also you can have peace of mind.

World Stamp Show 2016

International stamp shows have long lead times. The announcements have already begun for the next US based International show which will be held in New York in 2016(http://www.ny2016.org/)  International shows are held under the auspices of the FIP (Federation Intenational de Philatelie) a group that arranges international competitive exhibits and certifies stamp shows. The United States gets one show every ten years and they have been held on the sixes  (the 1946 show was held in 1947 to honor the centennial of the first United States stamp and the 1996 show was similarly moved back a year because of the sesquicentennial of the same issue). Sipex was the international show held in 1966 in Washington and it was my first International. (Sipex has the honor of having the lowest value US souvenir sheet issued in its commemoration. It shows what a difference marketing is today to realize that the Post office issued a souvenir sheet with a face value of only 5c to mark that show). The 2016 show will be at the Javitz Center in New York and should be a real event. The stamps one can see at such an exhibit are astounding and I know its a long way off but try and stay healthy and plan to go.

Original Gum

There is no more valuable substance in the world by weight and volume than original gum. Consider -the gum on a thousand mint US Ten Cent 1847s if miraculously removed, commingled and weighed would total about an ounce. And the value of such gum on the stamps is $12,500 for each stamp according to the latest Scott catalog (the difference between an" og" price and a "no gum" price) which makes our magic ounce of og worth a cool $125 million (a US #31 has a $20000 premium for og making a thousand of them worth $200 million.) And og is increasing rapidly in value. The price of Nineteenth Century stamps with original gum has far outstripped the price of the same stamps without gum over the last twenty years. And this is for a substance that is invisible when you mount your stamps and requires the utmost care so as not to compromise or damage. And that is when you are fortunate enough to have bought og in the first place. I can't tell you how many certificates from ten or more years ago I have seen reversed as to og and what buyers had bought as og is not now considered og. And don't think that this won't happen again in the future. The emphasis on gum seems silly and even dangerous to our hobby.

Chicken

Increasingly, the political calculus seems to be the game of chicken. In the US debt extension negotiations in Congress this summer the idea of compromise was considered unacceptable, largely by the Republicans. In the European debt crisis going on now, the Germans have taken the same position. The idea that intransigence is a smart political strategy is a foolish one. Sometimes it works but when it breaks down the unintended consequences are terrible. Philatelists know the devastating effects of WW I from our hobby and postal history- the Occupation issues and locals and regionals that were created as governments fought for territory and order. But what is often unseen in philately is human suffering. The consensus of historians is that WW I was caused by a colossal game of chicken. After the assassination of Arch Duke Ferdinand, central European countries each felt that the others would back down in the face of military mobilizations. It didn't happen that way. Over fifteen million people, most of them young men, died in that war. And since WW II was just a continuation of WW I add another sixty million killed to the total of a game of chicken gone wild. This is what is so scary about what is going on right now in Europe and the US. Many politicians seem unaware of the risks of not seriously negotiating problems. The "my way or the highway" mentality may work in small human circles but in the larger world it is a prescription for disaster. Philatelists have enough stamps and covers to collect without issues caused by political failure.

Euro effect on the Stamp Market

The current Euro mess has seemed to have little impact so far on the stamp market. The Euro has fallen some 15% against the dollar and the financial system in Europe is in turmoil but prices for European stamps seem stable. There is little buying from the weaker European areas, countries like Italy and Spain which would see serious devaluations of whatever currency they moved to if the Euro failed. And we are seeing no increased selling by European stamp holders attempting to put their money in dollars pending a devaluation. My own sense is that most stamp collectors and dealers are like most other consumers and they are still divorced from the financial turmoil that is going on around them. What concerns money center banks and government financing really has little short term impact on what most of us do anymore. Maybe we have become anesthetized to bad news. Last summer we watched the travesty of the United States nearly defaulting on its debt because of Congressional intransigence. In the end, the players involved blinked and a solution appeared. A similar ending  is probably what most people feel will happen in the Euro crisis. So many major financial players have skin in the game that a solution will be worked out in the end. How much that solution will cost and how much of that cost will trickle down to most stamp collectors is not yet known. But until we feel the cost, it is still business as usual for most collectors.

Post Office Marketing

 Yesterday's post (about a private delivery service that operates at Airport TSA checkpoints to allow passengers to send back to themselves items of value that they unintentionally brought to a plane and are to be tossed as not acceptable boarding material) got me thinking about what is the major cause of the Post Offices budgetary problems. Sure, the United States Post Office is a large, slow bureaucracy, but also it is prohibited by law from entering new markets and offering new services without Postal Commission permission. This is terribly cumbersome and inefficient, and lobbying and competing business special interest groups attempt to curtail any Post Office changes that might impact on their business. The USPS rarely capitalizes on its most competitive advantage.  There is no other business that stops at virtually every address in the United States each day to make a delivery and an aggressive marketer could easily cash in on that fact. How about lottery tickets? Order them online, pay with your credit card or from a credit that is set up by a cash payment at the post office and the number of tickets you want can be delivered to your home the next day. This would work too for postal money orders and the Post Office could even operate as a postal bank as it does in many countries. Indeed, the Post Office could set itself up as a kind of Amazon for commonly used lighter weight items that could easily be delivered with your mail each day. There are scores of products and market niches that the USPS could exploit. When you constrain government, hem it in by rules and regulations so that all the profitable areas around the government agency are forbidden to the agency to compete in, and then complain that government can't compete profitably you are being disingenuous. Government certainly has problems and inefficiencies but the attitude by some that government is the root of all evil is wrong.