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September 2004

Flavour of the Month
Me being blatantly self-opinionated

If offered in life a leisure pursuit which provided pleasure and profit jointly most would utter 'Tell me more' at the very least. Philately is such a pursuit; one of those rather rare worlds within a world where both pleasure and profit can quite readily be simultaneously achieved. That is if adherents are prepared to consider informed opinion, even though this may diametrically oppose the knowledge accumulated in the past. Certainly, few who are involved in philately, at even a modest level, would deny that the pleasure component is usually present in their hobby. For most however, when it comes time to part company with a collection, achieving the profit component relies more on luck than it does on skill.
 
          There are very sound reasons why pleasure and profit in philately can and should go hand in hand. Before exploring that tantalising proposition I'll broaden the topic from another perspective. A stockbroker friend recently sent me a 17 page report by U.S. research group, 13D Research Inc, entitled 'Will philately ride the coattails of the bull market in commodities?'. Although prepared primarily for the U.S. market the report has many parallels for Australia, which after all is a major league player in commodities. This is one of the most informed philatelic market reports I have read and is superbly researched from within and beyond the philatelic world. To avoid possible copyright infringement I will restrict my observations to a broad overview, citing amongst other factors the following as reasons for continuing strength in philately:

          1.  'Baby boomers' are approaching retirement with far more income and wealth than any previous generation of retirees, and are likely to live longer than previous generations. That generation was exposed to stamp collecting at childhood when it was the 'done thing' in the 'fifties and 'sixties, and is the generation most likely to revisit during retirement a familar hobby such as philately.

          2.  Philately is extremely popular in emerging markets, particularly China. It has been estimated that the number of stamp collectors in China could be as many as 18 million (there are an estimated 300/500,000 in the U.S.), and continued economic and income gains for India, South America and Eastern Europe augers well for diversity in future philatelic taste.

          3.  The Internet has bolstered the philatelic market by rendering it more liquid. eBay barely existed five years ago and today (11 October when I looked) the U.S. site alone has over 140,000 individual lots for auction. Combine this with the many other, ever-expanding auction and trader sites and the amount of material being offered and absorbed is unprecedented. The impetus for commercial philately to constantly restock has never been greater.

          4.  The transferability and portability of philatelic material makes it suitable as a tax shield in certain instances. An example from amongst several provided is buying material in a capital gains tax exempt country and maintaining the material in that country.

          5. 
Philately represents an excellent hedge against inflation.

          Greg Manning, the CEO of Greg Manning Auctions Inc, which is NASDAQ-listed, earlier this year stated:
 
"The demand for stamp collections is as strong as I have witnessed in 45 years in the business, and is backed by solid fundamental demand from the large worldwide market, which has been buoyed by an influx of eBay enthusiasts over the past five years that has greatly expanded the base of buyers. This, in turn, creates a broad demand across continents for stamps from virtually every country. I believe that the growth of this market is based on a combination of steady collector, dealer and investor demand, and is an extremely healthy situation with excellent long term prospects.''

          Philately however is not a level playing ground and no informed individual would suggest that all things philatelic should be categorised as for pleasure and profit. Rather, that designation needs to be sparingly applied, and those serious about their philately will seek the opinion of those professionally qualified to provide such advice. Which subject material will provide the pleasure aspect? That's more an individual determination. Which material constitutes the potential for profit? That's where qualified professional assistance ought to be sought, and will arouse diverse opinions .

          For those serious about their philately, particularly if you are seeking a fresh initiative - perhaps a totally new collection - I have a number of ideas which I believe embody the pleasure and profit concept.
      
                            
A snip at twice the price
Exceptionally high price realisations are regularly reported in the philatelic press, and my contributions in that genre appear below (see 'Cosmic results'). Less often reported, however, are 'bargain' realisations at auction

                                   
                                              Scan kind courtesy Status International 

I rarely have in stock an Australian 1d Engraved on commercial cover. They are underrated, particularly the distinctive, pale Plate 1 printing. Lot 1889 in the Status International sale of 9 Sep 2004 was no less than a strip of four of this printing on a 9" x 4" cover above (reduced for scanning purposes). Contemporaneously used in May 1914, I bid for this lot for stock but was outbid at $475 (excluding premium). This was very good value and had the item 'fitted' in to one or other of my collections, which unfortunately it did not, I would have kept my hand in the air until well beyond the $1000 barrier. Congratulations to the buyer for landing this month's 'snip'.                                        
                     
What were they thinking?
Explaining the inexplicable (or rather attempting to)

A couple of years ago I bought at auction five large cartons of 1950s to 1970s mail addressed to the Philatelic Bureau Melbourne. The cartons had been stored in an out building and together with the philatelic material I subsequently found there was a fair share of non-philatelic biodiversity, which we shan't go in to here. The individual responsible for the 'preservation' of this material had, apparently for convenience when leaving the office, rolled the daily incoming mail - which was worldwide - in to a cylinder secured by rubber bands.
 
          Before bidding at the auction I tested a couple of 'cylinders' by removing the bands and attempting to open the contents. As suspected, after 30 and more years of being contorted, the cover contents upon opening and releasing immediately reverted to their recent imposition as if spring-loaded. The material itself was an enthusiast's goldmine - this was after all philatelists ordering/remitting from the Australian Philatelic Bureau, often using commemorative higher denominations, booklet panes, registered and/or Express delivery, etc - and I really wanted to have the fun of being the first to apply today's philatelic standards to this remarkable hoard of covers. In a rare moment of head overruling heart I thought 'nuh', I'll never get around to doing anything with this lot. When I witnessed it being 'given away' in the auction and I couldn't help myself.
 
          During this past month we quite unexpectedly processed the material. To make more space in our overcrowded stockroom I was about to remove the five cartons to our basement storeroom, from which nothing ever returns. Ian, out of curiosity, opened a cylinder and commenced to invent a system for processing the contents. A few cylinder rolls later he had perfected a system and we were 'hooked'. Three weeks later the material, surely over 100,000 covers, was neatly boxed and labelled, and pleasingly we found that when packed very tightly in to our plastic tubs after some time covers were tending to resume their natural form. Like a good bottle of wine, we reckon these items will improve with time and be fit for philatelic consumption in the not too distant future.

          Repatriating this material to the philatelic world was very satisfying, but along the way we found bags and bags of 'woodchips', which ultimately it would appear was the intended fate for the whole of this hoard. This lot was a reminder of why commercial covers, even of 30 or so years ago, have not survived in large quantity. Amongst the 'woodchips' were many sad findings, notably pieces with top denominations (eg G.B. 1948 1 brown and N.Z. 1960 1 Pictorial - neither of which I have seen on 'entire') and trashed Postal stationery. One particular disappointment from the latter was the item scanned below. Commercially used Stationery of Christmas Is is very scarce and prior to 1971 Aerogrammes were formular in nature. This 1970 example would fetch $500+ if intact - I've not seen one - but as is it's next to worthless. No, we didn't find an intact one amongst the unadultered material.

                                          

                                                       Sad example of 'Woodchipping' 

          Some might say that this month's 'What were they thinking?' title could apply either to our cylinder-maker, or to Ian and I for our obsessive overindulgence!

'He chose wisely'
Smart collector of the month. Perhaps the very antithesis of the foregoing category.

           
          Scans kind courtesy Millennium

The above marvellous monogram blocks were offered as Lots 257-258 in the Millennium Philatelic Auctions Rarity Sale of 6 Oct 2004. Remarkably, they were making their first appearance on the Secondary market, having been sold to the public only in the Australia Post inaugural Archival sale in 1987. The vendor, and of course successful tenderer in the Archival sale, is an old client whom we shall call 'Bert'. A quiet achiever in philately, Bert has amassed a formidable collection during a lifetime of collecting. Many of the lots in the Millennium sale were from his enviable holdings. Back to the Postage due blocks above, I note that I tendered $3000 for the two blocks in the Archival sale, and was well beaten to the post by Bert's combined $5120 offer. At the Millennium sale the blocks realised $18500 each (excluding premium), providing 'a nice little earner'. Well done, Bert. Another example of 'Who dares, wins'.                 
                                         
Cosmic results
Noteworthy realisations in the salerooms

                                  
                                   
Scan kind courtesy Millennium
                                    
Also in the Millennium Rarity Sale, as Lot 85, was the State/Kangaroo combination item scanned above. This item had more than the usual going for it. For starters the W.A. 1d on 2d Stationery Envelope is scarce used, combination covers of any kind from W.A. are rare, and this is a particularly attractive 'trio' of colours. I am very fond of State/Kangaroo combination covers as regular readers will be aware. Estimated at $1750 I thought two and a half grand would do it, but found myself pushing the lot to $4000 (excluding premium) at which point I called it a day. I'm regreting having done so already.

          This is actually a new record for a State/Kangaroo combination cover. I commenced my collection of this subject in the 1980s and occasionally have difficulty facing up to the new paradigm which has evolved. I completely missed bidding for this item on an earlier occasion when it sold for a tantalising $700 (Macray Watson Sale 69 - Lot 908 - 19 Mar 1996). Look carefully at the town to which it was addressed. I'm destined to own it some day!
                                     
                                     
Rod's Ripper
Cover of the Month

  
                          
'Wot ! Two quid, eleven and thruppence sterling ? That's a few bob, Guv.'

Actually an address 'tag' rather than a cover per se this month. Originally this would have been attached to an inter-bank documents bag, which left U.K. aboard Imperial Airways Ltd service IE331 on 13 Apr 1935. At a rate of 1/3d per oz the rating of 2.11.3d indicates the total weight was 40-40oz. The service called at Brindisi, Alexandria, Baghdad, Calcutta and Singapore, encountering a number of aeroplane changes along the way, before being transferred to a QANTAS flight to Brisbane, Butler Transport (yes, old Harry's firm) to Sydney (arriving 26 Apr), thence by steamer to Wellington. No wonder commercial items should look a bit 'knocked-about'. Actually this item has stood up well to the journey and of course Seahorse 10/- blocks are seldom encountered on 'cover'.
  
                     

Blasts from the past
Opportunities from yesteryear for which it would be worth firing up the old time machine 

One for the Australia FDC buffs to salivate over. Our 26 May 1976 auction, Lot 51, reads:

 
'First Day Covers: A complete series of Australian issues of the reign of KGVI, 1937-53 (Food issue), mostly illustrated, with many designs unlike those usually encountered [italics are mine], incl Robes (5/- and 10/- on plain covers) and Arms sets, mounted (rather heavily) in a single loose-leaf volume (70 covers)'

The estimate was $500 and the lot realised $480 (no premium). What brand were the 'many designs unlike those usually encountered'? More imperatively, were the impossibly rare 1942 KGVI 2d scarlet, 3d blue and 5d Emu there? The '70 covers' suggests it is possible they were, and the presence of the Robes set confirms that this was a more serious lot than one usually encounters. I guess we will never know, but it's irresistible to dream.

           On a slight tangent, the word 'dream' brings to mind another FDC-related story. Shortly after we achieved the then remarkable sum of $6500 (excluding premium) for a 5d Emu FDC (Sale 183 - Lot 370 - 4 Apr 1997) - at a time when it was $50 in the ASC - an interstate client phoned to say that he had an FDC collection which included a 5d Emu, and would I come and see him. I arranged to do so in combination with a few other visits in his part of the world (fortunately). Upon meeting, I quickly thumbed forward in his album to the space for the Emu, dismayed that it was a 1949 'spacefiller'. 'But Mr. S, this isn't even close' harped I. 'Oh', uttered a despondent Mr. S. Then, restoring my hopes, he uttered 'Wait one moment', and disappeared in to an adjoining room, returning with a cover bearing a 5d Emu used in Papua New Guinea (ie post 1945). 'Is this any better?'. A dreamer indeed.
                            
This column was born at the insistence of my long-suffering staff, who gingerly recommended that a broader forum would be a more constructive medium through which to channel one's daily philatelic 'rantings and ravings'.

Previous editions of 'Rodney's Ravings'