Bill Gross: king of the philatelists

Bill Gross, the former bond king, still occupies another throne – but he’s about to abdicate, says Chris Carter.

887_MW_P55_Collectables_Main

There are limits at some point to a [stamp] collector's portfolio, because, if pursued long enough, and, admittedly, with enough money, it's possible to fill in all the spaces in an album in other words, to get them all," legendary bond investor Bill Gross told CNBC. "Get them all" sounds like something a crazed teenage follower of the smartphone game Pokmon Go might say. But the co-founder of Pacific Investment Management (Pimco) knows that stamp collectors are nothing if not tenacious.

The problem for philatelists, and one of the reasons why the market has underperformed in recent years compared with, say, classic cars, is that nearly all of the rarest and most desirable specimens (particularly American stamps) have already been snapped up by museums around the world. In hoovering up what was left, Gross "effectively cornered the market", say Katya Kazakina and John Gittelsohn on Bloomberg Pursuits. So, when he sells the first part of his $42m collection at auction in September, "the entire field of philately will feel the effect". As Gross, once known as the bond king, for his huge influence in bond markets puts it, "I figured it's better to give other collectors a chance to own some of these stamps and to use the proceeds for philanthropy".

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

A new record is almost certain

That first sale of around 150 items is expected to raise at least $9.1m, breaking the record held by, you guessed it, Gross himself, for the most money made from a single day at auction. (Gross raised that amount when he sold his collection of British stamps in 2007.) "They are the greatest hits of American stamp [collecting]," Scott Trepel, president of Siegel Auction Galleries, which is handling the sale, tells Justin Baer in The Wall Street Journal. "When you add it all up, it comfortably breaks the record."

Among the treasures for sale are a unique block of 24-cent stamps from 1869, which feature an inverted image, valued at up to $1m; and the two-cent "Blue Hawaiian Missionary" stamp, issued in 1851, more than a century before Hawaii became a US state. That one is valued at up to $750,000. The only stamp to feature the head of George Washington, issued by the state of Massachusetts in 1846, is expected to make $300,000 to $400,000.

Advertisement
Advertisement - Article continues below

Despite the market's disappointing performance in recent years, Gross could still do well. There have been instances of stamps fetching high prices, suggesting that demand is out there. Four stamps from 1948, featuring Mahatma Gandhi, set a record for Indian stamps when they sold for £500,000 last April. And the overall record price for a stamp was set only four years ago when the 1856 British Guiana one-cent magenta fetched $9.5m in New York. Gross will be hoping that his fellow collectors' tenacity can last until the autumn.

The luck of a canny collector

887_MW_P55_Side-Column

A Mark Rothko painting, for example, picked up for $10,000 in 1959, fetched almost $73m in 2007 a profit of around 730,000%. Hence the (partial) reason for the sale: tax (the other being charity). "A lot of the art was purchased for good prices in the 1940s, 1950s, and 1960s. But the art market just went bonkers since then," says Johnson. "You can imagine what the capital gains tax [on the Rothko painting] was." By donating the proceeds to good causes (as will happen in May), "there was no tax to them".

Valuing the collection, which includes items from Monets to Chinese porcelain (pictured), has been a "Herculean under- taking", says Tarmy, but the estimate of $500m suggests it will pay off for the charities. The sale is "consistent with the ethos of philanthropy, which is all about keeping energy and positivity flowing", Adam Rockefeller Growald, David Rockefeller's 32-year-old grandson, tells Lisa Grainger in The Times.

Auctions

887_MW_P55_Auctions

A sketch for a lost portrait of Winston Churchill is to be sold in London on 21 March as part of the Christie's sale of British and Irish modern art. Graham Sutherland created the painting in 1954 as an 80th birthday present for Churchill from his MPs, but Churchill hated the artwork, which showed him as an ageing figure, says the Evening Standard. Churchill's wife, Clementine, is thought to have had the painting burnt. The sketch is expected to make between £7,000 and £10,000.

Gone...

A note by Albert Einstein in 1921 (when he was 42) to Elisabetta Piccini, an Italian scientist 20 years his junior, sold for $6,100 at Winner's Auctions and Exhibitions in Jerusalem last week. The note (in German) starts: "To the scientific researcher, at whose feet I slept and sat for two full days, as a friendly souvenir", using an idiom signalling affection. A more intellectual note, setting out Einstein's thoughts on his "Third Stage of the Theory of Relativity", went for $103,700.

Advertisement

Recommended

Visit/514982/alternative-investments-three-hidden-gems-beyond-stocks-and-bonds
Share tips

Alternative investments: three hidden gems beyond stocks and bonds

Alternative investments such as private equity or commodities are one of the oldest forms of investment, says professional investor Alex Barr. Here. h…
16 Sep 2019
Visit/investments/alternative-investments/601002/forget-stocks-handbags-have-outperformed-them-all
Alternative investments

Forget stocks – handbags have outperformed them all

A surprising collectable has been trouncing other asset classes. Chris Carter reports
20 Mar 2020
Visit/investments/alternative-investments/600870/nintendo-playstation-geek-dreams-are-made-of-this
Alternative investments

Nintendo Playstation: geek dreams are made of this

The only Nintendo PlayStation ever made is up for grabs.
21 Feb 2020
Visit/investments/alternative-investments/600683/the-68-trillion-inheritance
Alternative investments

The $68 trillion inheritance

A very valuable torch is being passed to a new generation, says Chris Carter
24 Jan 2020

Most Popular

Visit/investments/property/601065/what-does-the-coronavirus-crisis-mean-for-uk-house-prices
Property

What does the coronavirus crisis mean for UK house prices?

With the whole country in lockdown, the UK property market is closed for business. John Stepek looks at what that means for UK house prices, housebuil…
27 Mar 2020
Visit/economy/eu-economy/601060/the-european-central-bank-throws-away-the-rulebook-to-bail-out-italy
EU Economy

The European Central Bank throws away the rulebook to bail out Italy

The ECB has removed all constraints on asset purchases and will now buy “whatever it takes” to tackle the coronavirus. John Stepek explains what it me…
26 Mar 2020
Visit/investments/commodities/gold/601037/gold-is-on-a-wild-ride-so-should-you-be-buying
Gold

Gold is hard to find right now – so should you be buying?

With demand through the roof and the physical metal hard to find, it's not the best time to buy gold. But right now, says Dominic Frisby, you want to …
25 Mar 2020
Visit/economy/uk-economy/601063/the-uks-bailout-of-the-self-employed-comes-with-a-hidden-catch
UK Economy

The UK’s bailout of the self employed comes with a hidden catch

The chancellor’s £6.5bn bailout of the self employed is welcome. But it has hidden benefits for the taxman, says Merryn Somerset Webb.
27 Mar 2020