In May, the legendary investor known as the “Bond King”, Bill Gross, called time on the “total return” strategy that made his fortune in the 1980s. Interest rates are too low relative to the almost 16% seen in 1981 (despite what anyone coming up to renew their mortgage may say) and that approach is now defunct, he said. But Gross is also gloomy about another of his favourite strategic pastimes – stamp collecting. The hobby has “always been a function of kids and their collecting who later on become wealthy adults”, he told Bloomberg TV in June. “But… I don’t think kids are collecting stamps any more.” So, he decided to sell up.
Gross was introduced to philately when his mother gave him an album of stamps in the hope that he could sell them to pay his way through university. The stamps, however, turned out to be largely worthless. Nevertheless, Gross “wanted to prove his mother right, that stamps could be a good investment”, explains Robert A. Siegel Auction Galleries, the auction house in New York that sold Gross’s stamp collection last month.
The goal to which every serious collector aspires is to build a “complete” collection – that is, to acquire at least one of each item within their chosen field of interest. But within the world of US stamps, there can only ever be one winner at a time. That’s because there is just one privately owned 1868 one-cent “Z” Grill stamp in existence. Another has been held by The New York Public Library for almost a century and, to be sure, if the librarians ever decided to sell it, they could buy a lot of books with the proceeds.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Gross was outbid when he tried to buy it at auction in 1998. It was snapped up by the president of the Mystic Stamp Company, Donald Sundman, for $935,000. So, in 2005, Gross bought the also incredibly rare 24¢ Inverted Jenny plate block of stamps, accidentally depicting an aeroplane flying upside down, for nearly $3 million, and traded it for Sundman’s “Z” Grill in what was described as the “greatest stamp swap of all time”. Finally, Gross had completed his collection of US stamps. On 14 June, he gave someone else the chance to complete theirs and it cost them almost $4.4 million for the privilege.
The auction record for the most expensive stamp overall is still held by the British Guiana one-cent Magenta from 1856, which fetched $9.5 million in 2014. At least there remains, as Robin Wigglesworth notes for FT Alphaville, one “arena where British securities are more highly valued than American ones”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
David Ellison: America's new media mogulDavid Ellison is building a mighty new force in old and new media. Critics worry that he will prove to be a Trumpian patsy. Is that fair?
-
Investors have overlooked some of China’s best growth stocksOpinion Dale Nicholls, portfolio manager, Fidelity China Special Situations, highlights three Chinese businesses where he’d put his money
-
Global investors have overlooked some of China’s best growth stocks
Opinion Dale Nicholls, portfolio manager, Fidelity China Special Situations, highlights three Chinese businesses where he’d put his money
-
How Next defied the odds and positioned itself as a British high-street stapleNext rose from a near-death experience and now thrives as a high-street staple. What's driving its success – and should you invest in the retailer?
-
Alok Sama on AI and how to invest in the future of technologyInterview Alok Sama, the former president and chief financial officer of Masayoshi Son’s investment vehicle SoftBank Group International, explains AI’s potential
-
The private equity puzzleListed private equity trusts still trade at large discounts, despite sales that validate their valuations
-
Why investors should avoid market monomaniaOpinion Today’s overwhelming focus on US markets leaves investors guessing about opportunities and risks elsewhere
-
Can Rachel Reeves save the City?Opinion Chancellor Rachel Reeves is mulling a tax cut, which would be welcome – but it’s nowhere near enough, says Matthew Lynn
-
Pierre-Édouard Stérin wants to make France great againConservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous
-
Global investors have overlooked the top innovators in emerging marketsOpinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
