Last week I previewed the auction at Sotheby’s of the world’s most valuable stamp, the 1856 British Guiana 1c black-on-magenta. The stamp sold for a total of $US8,307,000 (after buyer’s premiums were added to the hammer price). That was noticeably less than its pre-auction estimate of $10-$15 million, and marks the first time in its history that the stamp has sold for less than at its previous sale. (It sold for $9.48 million in 2014.)
Another of the ‘Three Treasures‘ at auction on the day was the 1918 USA Inverted Jenny plate block, which also turned in a sub-estimate result. It made $4,860,000 compared to an estimate of $5-7 million.
These results have collectors wringing their hands and wondering what this means for the future of philately more broadly. It didn’t help that the third Treasure was a coin, the US 1933 $20 Double Eagle, which started on the same estimate as the 1-cent magenta, but smashed it out of the park with a final result of $18,872,250.
Well, I’m no expert, but I’ve got a blog and a bunch of opinions, and that’s the important thing. Here are a few lessons that I think we can draw from this result.
1. Don’t believe the hype
Any auction estimate is subject to the frailty of human judgement, which can err on either side by over- or underestimating the market. In the case of glamour items, estimates like “$10-15 million” come to be seen as what the stamp MUST fetch, like that’s its job, and if it doesn’t make it, it has failed. The stamp did nothing wrong. It got exactly what it was worth in the current market – and remains the most valuable stamp in the world. One bidder still thought it was worth shelling out $8.307 million to own, which is still a stupendously ridiculous amount to pay for a tiny piece of paper. And it took at least one other bidder to push them that far. We can wonder why a top-end auction house’s estimate proved to be optimistic, but it’s not the stamp’s fault. LEAVE PENNY MAGENTA ALONE!
2. Blame it on the bootie?
It’s become a thing for owners of the one-cent magenta to sign the back of the stamp. Eyebrows were raised when the most recent owner, Stuart Weitzman – a shoe designer – virtually engraved his initials in the stamp, perched atop a gauche outline of a stiletto sole. Some have suggested that his heavy-handed effort might have turned buyers off. I doubt it. Have you seen the front? If you’re planning to spend millions of dollars on this stamp, you clearly don’t care too much about looks.
Weitzman sure dug his heel in, intrusively so, but those blaming the stiletto have blinkers on. I have, like, six better reasons for the auction result. But first, make sure you take a moment to appreciate how clever my ‘dug his heel in’ line was. Don’t say I don’t give you million-dollar wordplay.
3. Absence makes the market grow fonder
Part of the mystique of the one-cent magenta is that for much of its modern history, it has disappeared from the market for years. Those intervals allowed time for newer well-heeled collectors to enter the market and relish being part of the stamp’s hallowed history. But it was only seven years since Stuart Weitzman bought the stamp. With Weitzman out of the market, a new bidder would have to have taken his place in order for the stamp to attain similar results. And how often does a new face stroll into a bidding room ready to casually drop ten million dollars on a postage stamp? Not very often, I’d think. I commented on Twitter after the auction that this result is consistent with zero new buyers entering the top-end market for Western rarities. That was probably too sweeping a generalisation; let me downgrade that to “zero new buyers entering the market for this specific stamp but with ramifications upon the top-end market for Western rarities.” So, where have they gone?
4. Rich men have new toys
Since being shepherded out of colonial obscurity, the one-cent magenta has been a trophy for rich men (the exception being Ann Hind Scala, who inherited the stamp upon the death of her estranged husband, who was, wait for it, a rich man). Some were collectors, some were investors. One of the first notable owners was the Austrian count, Philipp la Rénotière von Ferrary. At the auction of his estate, an American textile magnate beat out two ACTUAL KINGS to win the stamp.
This is old-school philately, with sausages being swung over colonial classics. White sausages, unsurprisingly. But the world has changed. Half the royal families don’t exist anymore (though their money probably still does). Stamp collecting still has fans, but they are thinner in number than they used to be, as much at the top end as at the bottom. And when some young entrepreneur makes a new fortune, do they suddenly take up stamp collecting? Not that I’ve heard. They invest in startups, or shoot for Mars, or start a charity, or launch a cryptocurrency. Even if they have a collector’s heart, there are just so many more categories of collectible to enjoy now. Count von Ferrary never had to choose whether to spend his schillings on the one-cent magenta or a Nike Air Jordan 5 Retro T23 Tokyo.
Frankly, the one-cent magenta is running out of people who care. When there aren’t enough rich philatelists left who care enough, then the investors will lose interest too. In fact, perhaps they already have. Because…
5. Investors noped out
Ahead of the auction, it was said that investors might be attracted to the one-cent magenta because of uncertainty elsewhere. But if investors DID look at the one-cent magenta, then they looked away pretty quickly. Fact is, even though interest rates remain sluggish and the global economy is still making its way back from the COVID wipeout, these are the times when smart money sees blue sky in stocks and other investments that will return big profits when the market lifts.
Stamps still see an uptick in times of economic uncertainty, as tangible assets become more reassuring to hold than promises on paper. But even then, they might be losing some of their lustre. It’s so much easier for an investor to wrap their head around collectables where the value is more easily apparent to the eye, like vintage watches (which had a great year in 2020), or – ugh – coins. Speaking of which…
6. Stamps vs coins: apples vs oranges
The one-cent magenta had to wear the embarrassment of being auctioned alongside the US $20 Double Eagle gold coin. As mentioned above, with both starting on the same estimate, the stamp fell short, but the coin sold for over eighteen mill.
The comparison is tempting, but they are different markets. Coins feel valuable. Coins are shiny (sometimes) and made of precious metal (usually). An investor deals with money, and coins are money. Rare money. Now try handing the same person a tatty colonial stamp and explaining its significance. It can be done, but you’re one step behind already.
Does this auction result mean that coin collecting (as opposed to investing), is in a healthier state than stamp collecting? I’m not in a position to know. But when I searched for ‘numismatics’ on YouTube, the top two hits were people questioning the hobby’s future. By comparison, the entire front page of ‘philatelics’ hits were people having fun. Game over. We win.
7. Who collects British Guiana anyway?
Here’s a comment that I heard during the week, and I can’t remember who made it, but it stuck with me. (If it was you, let me know, and I will fully credit you!) How many people embark on the challenge of compiling a collection of British Guiana, when they know that they’ll never be able to complete the collection unless they beat out the millionaires to buy the world’s most expensive stamp? The notability of this stamp effectively kills off an entire potential market segment.
8. Any publicity is good publicity. (Seriously, ANY publicity.)
To his credit, Stuart Weitzman generously shared the stamp with the world, displaying it at the Smithsonian, and touring it to exhibitions. That’s pretty great, if you’re into stamps already. So when it came time for the auction, naturally we were all very excited. But did anyone outside philately even know it was happening? It barely registered a blip on my media radar. Where’s Irwin Weinberg when you need him? You’ll get that reference when you watch the video that I’ve got for you.
9. Expect more of the same
Top-end classics of Western philately are not going to hit the bargain bins anytime soon. But here are a bunch of reasons why I wouldn’t be surprised if we start to see more prices plateau.
- New collectors continue to enter the market from rising economies such as the Middle East, China and India. Naturally, they’ll be more interested in their own nations than in the colonial outposts of forgotten empires. Why would a Chinese collector take up British Guiana when they could take up, you know, China? (India obviously has some crossover with old-school British Empire. That could keep prices ticking over for a while.)
- The welcome arrival of new and returning stamp collectors over the last few years has been well documented. But how many are interested in classical philately? Certainly, most of those at the younger end can’t even afford to think about it. Thanks, casualisation of the job market!
- Side note: I’m not dissing classical philately. It can be fascinating. Pick a nation or a colony, get stuck in.
- Side side note: I’m not defending colonialism. You can be philatelic about it, and also critical.
- The ownership of big-ticket philatelic trophies is strongly connected to the world of traditional philately, with its exhibitions and cranky judges. For the next twenty years or so, the arrival of retired baby boomers will delude this corner of the hobby into thinking it’s still alive and kicking. But at some point, if this arcane world is to survive, it will need to be dragged kicking and screaming toward relevance and accessibility to younger generations. If it doesn’t, then prices for rare classic material will slump, because there simply will not be enough collectors with the motivation to chase it.
You’d think the prospect of plateauing prices for high-grade classics might keep the likes of Sotheby’s awake at night. But if they keep making a mint out of people who think it’s a good idea to pay millions for digital certificates of ownership to some pretty basic artworks, I reckon they’ll get by. They won’t even miss us.
10. And now the good news
One slightly underwhelming result for a top-end classic does not an entire hobby make. There are plenty of philatelic fields in which the market is buoyant. As an example, one of those is an area that I’m into: Australian decimal stamps (post-1966, that is), used on commercial cover. I gave an APS Stamp Chat on this topic last year: stamps from a historically underappreciated era, in a historically underappreciated format. At an auction in Melbourne a few weeks back, individual covers were getting three figures (AUD). Those are not Inverted Jenny numbers, but it’s pretty impressive for material that ten years ago was probably being sold by the box. The scarcity of some of this material is being recognised, and a collector base is rapidly forming around it.
That’s something that I find – well, ‘thrilling’ might be overstating it, but let’s go with ‘satisfying’ – about the process of philately, as opposed to just ‘collecting’. You can set out to specialise in a given field – anything you like. If you choose a popular field, you’ll be competing against many others, and covering well-trodden ground. Far better to strike out and explore new territory – pick an under-appreciated country, an era that no one cares about, a detailed study the usage of one obscure lettercard, whatever – and in doing so, you can identify unrecognised rarities. Compile your collection into an eye-catching exhibit, or start a blog, or write a column in a stamp magazine espousing your enthusiasm, and you can lead others into your field. The prices will follow.
Dealers worldwide have also reported a bumper market in entry-level sales. So while the one-cent magenta might seem, at least for now, to be on the wane, the beginner and mid-level sectors of the philatelic market are still looking pretty healthy.
The point is, philately is no longer for European royals and American industrialists anymore. It’s for us. The subjects, not the king. The people who resist trophies, and just collect what we’re into. (Then we share it on our Instagrams.) Social media and the arrival of the ‘developing world’ are forces for increased democratisation in philately. The revolution is here!
I just hope no esteemed philatelic institutions crash our party and claim to be democratising philately themselves.
11. And the winner is…
In the hours after the auction, we learned that the new owner is the esteemed British stamp dealership and catalogue publisher, Stanley Gibbons. At a new website dedicated to the stamp, Gibbons says: “Our intention is to share this with everyone, so in addition to making the stamp available for viewing at the Stanley Gibbons flagship store at 399 Strand, London, we plan to democratise the ownership of this unique item. For the first time ever, you will be able to own your very own piece of the British Guiana 1c Magenta.”
HEY, WAIT A MINUTE! I can’t believe they just said that!
What does “democratising the ownership” of the stamp even mean? We don’t really know yet. Watching Stanley Gibbons MD Victoria Lajer in an interview with the Conversations with Philatelists podcast, I get the feeling that Stanley Gibbons themselves haven’t quite worked out what they mean either. The stamp’s price was worth a full third of the value of the entire Stanley Gibbons company; it’s taking out a big loan from its parent company to pay for a chunk of it. Just what flexibility that leaves Stanley Gibbons to share the stamp with the rest of us, I’m not sure.
Well, let’s try to figure it out. Last week, Graham Beck from Exploring Stamps invited James Gavin, aka the Digital Philatelist, and yours truly to chat about the ramifications of the one-cent magenta auction. As you’ll see, we also spent a fair bit of time racking our brains over what Stanley Gibbons might be up to. James had gone deep on the loan conditions, and it made for some very intriguing insights. It was lots of fun, so I’m posting it here for you to enjoy. I encourage you to click on the YouTube logo, which will take you through to the Exploring Stamps YouTube channel, where you can join in on the speculation.
I’ll be back soon, hopefully with some chatter about the more affordable end of the market. Where the real people live.