Stamp out hopes of profits from philately

published 19 April 2013

For many years now people have been telling me that stamps are a brilliant alternative investment. For as many years I have been rather ignoring them.

So I wasn't altogether surprised to see an article by Patrick Collinson in The Guardian at the weekend pointing out that "stamps valued in catalogues at hundreds of pounds are fetching just a few quid on auction sites". It tells the sad story of the stamp collection of one Paul Sanderson who regularly visited the stamp shops of The Strand in the 1960s and eventually "amassed a sizeable collection of mint or near-perfect British stamps". He figured they'd be worth a bob or two one day, yet instead not only are his grandchildren almost entirely uninterested in them, but the market is too. His 1902 five shilling King Edward VII which he saw valued in the stamp collector's bible, the Stanley Gibbons catalogue, at £175 sold for a mere £6 when he put it up on an auction site, while a "mint set" of King Edward VII stamps went for £22 rather than the £100 he was expecting.

This doesn't seem particularly surprising. As John Kay points out in the FT, "the fundamental value of an asset is derived from the cash or earnings or utility the asset generates". Assets that don't provide an income still have to provide utility to be worth something. So gold derives its value (such as it still is) from its "beauty and scarcity", alongside the belief that it is a long-term store of value, while diamonds derive theirs mainly from "the envy of others". Stamps provide no income. Their beauty is deeply subjective and any envy directed at them can come only from other collectors (unlike large diamonds we are all envious of large diamonds). What they appear to have had in the past, however, is scarcity: when stamp collecting was a very popular hobby there were more people after the more rare or special stamps than there were available specimens. No more.

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It might be, says Collinson, that contrarians would want to invest now, given just howunfashionable philately is. But as one philately society member says, it is hard to see where the demand will come from: "interest is diminishing" as collectors "die off". There are some very rare stamps that are likely to hold their value always, but in the vast majority of cases stamp collecting is not an investment. It's a hobby a great hobby, but sadly one that isn't as popular as it used to be.

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.