Philately offers investors an opportunity to buy a little piece of history, where the best investments are often due to a small stamp-printing error. Whether alternative investments are more or less risky than the JSE is a neverending debate, but the demise of Lehman Brothers and the near collapse of Royal Bank of Scotland will not soon be forgotten by this generation of investors.It is therefore hardly surprising that boutique stamp investment companies such as Johannesburg-based Doreen Royan & Associates are doing a brisk trade. "Stamp collecting is the second largest-hobby in the world with more than 50-million serious stamp collectors," said Graham Royan, a member of the Institute of Financial Markets and the Philatelic Traders’ Society in London, in an interview on Summit TV on Monday. "It’s not about ripping old stamps off envelopes and stuffing them in a book — this is people collecting, and normally specialising in, a particular type of stamp," said Mr Royan. His clients are often introduced to stamps as an investment, but then become interested in certain types of stamps, such as those from a particular country. "It’s a hobby where one can easily become hooked because it’s fascinating — the amount of historical and geographical information you can learn from a little stamp collecting is vast," he said. The Penny Black is the world’s most iconic stamp, a small piece of paper less than an inch wide. "The Penny Black is the world’s first stamp," said Mr Royan, "but a lot of people don’t realise there were in fact two stamps issued on May 6 1840, being the Penny Black and the Tuppenny Blue." The black stamp was worth a penny — the standard rate for postage at the time. Prior to that, customers had to pay the postmen, which was risky as the officials were often hijacked for the cash they carried. Putting a pre-paid label, as stamps were called back then, on a letter revolutionised the industry. "The first stamp ... was only in issue for a year, but they printed 66,5-million," said Mr Royan. The most valuable of these first Penny Black stamps, many of which have survived, are those that are in mint condition, having never been used.
Mr Royan owns a Penny Black still attached to a letter. "Envelopes hadn’t been invented yet, so you wrote your letter and folded it up and applied the Penny Black and sent it," he said. Closer to home, Cape triangles, first issued in 1853, also get alternative investors’ pulses racing. "A Mauritian stamp just sold in London for £1.5m, the island being one of the world’s first stamp issuers as well," said Mr Royan. The highest trade for a Penny Black so far was for a letter posed on May 1 1840, five days before the stamps were officially issued in Britain. "That was a little instance of insider trading — it is believed the postmaster received his allocation of Penny Blacks that were only to be sold on May 6, but he decided he’d be the first." The last recorded trade in Geneva on that particular Penny Black was in Geneva in the late 1990s. It traded at about £1.2m, said Mr Royan. The sister to the Penny Black — now far rarer — was the Tuppenny Blue, a two-penny stamp meant for greater distances – or for parcels, the same way it works today. The most valuable rare stamps come in sheets or multiples that were never used, and remain in mint condition. Few such stamps have survived, however. Scarcity also occurs due to printing mistakes, such as a set bearing an image of South Africa’s Union Buildings with some stamps printed upside down compared with the rest. They were printed on a sheet in reverse order to appear the right way up in a one-shilling stamp booklet. Another valuable find would be stamps from Rhodesia printed "albino" — in one colour twice, instead of two colours. "By 1962 a lot of stamps were being printed – a stamp from that era might be worth 20 pence, but a rare stamp with Queen Elizabeth II omitted in a sheet of four is the largest multiple of that error in the world," said Mr Royan. The stamp with the missing queen is now worth about £18250 to collectors, he said.
Mr Royan owns a Penny Black still attached to a letter. "Envelopes hadn’t been invented yet, so you wrote your letter and folded it up and applied the Penny Black and sent it," he said. Closer to home, Cape triangles, first issued in 1853, also get alternative investors’ pulses racing. "A Mauritian stamp just sold in London for £1.5m, the island being one of the world’s first stamp issuers as well," said Mr Royan. The highest trade for a Penny Black so far was for a letter posed on May 1 1840, five days before the stamps were officially issued in Britain. "That was a little instance of insider trading — it is believed the postmaster received his allocation of Penny Blacks that were only to be sold on May 6, but he decided he’d be the first." The last recorded trade in Geneva on that particular Penny Black was in Geneva in the late 1990s. It traded at about £1.2m, said Mr Royan. The sister to the Penny Black — now far rarer — was the Tuppenny Blue, a two-penny stamp meant for greater distances – or for parcels, the same way it works today. The most valuable rare stamps come in sheets or multiples that were never used, and remain in mint condition. Few such stamps have survived, however. Scarcity also occurs due to printing mistakes, such as a set bearing an image of South Africa’s Union Buildings with some stamps printed upside down compared with the rest. They were printed on a sheet in reverse order to appear the right way up in a one-shilling stamp booklet. Another valuable find would be stamps from Rhodesia printed "albino" — in one colour twice, instead of two colours. "By 1962 a lot of stamps were being printed – a stamp from that era might be worth 20 pence, but a rare stamp with Queen Elizabeth II omitted in a sheet of four is the largest multiple of that error in the world," said Mr Royan. The stamp with the missing queen is now worth about £18250 to collectors, he said.
Source: Michael Ettershank http://www.businessday.co.za/articles/Content.aspx?id=164899
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