A few weeks ago I helped clean out my grandmother-in-law's house. My wife's grandma, now aged 90, had started to experience failing health and found she could no longer care for her modest house. As a result, grandma departed for a long-term care facility while her relatives were left with the unenviable task of emptying her home of decade's worth of accumulation.
Because of my experience with antiques and the Pareto principle, I was aware that about 80% of the dollar value of a home's contents are normally concentrated in 20% of its objects. My expectations were tempered by the fact that my grandmother-in-law liked gambling in Atlantic City, sewing, costume jewelry and crystal, more or less in that order. Still, I went into the situation with an open mind because you never know exactly what you're going to find.
However, as expected, we discovered very little of monetary value in her home.
But one thing of interest I did find was a couple of old, unused Canadian stamps with the portrait of a young Queen Elizabeth II on them. Now, I'm no expert on stamp collecting, but I know enough about the topic to understand that vanishingly few specimens are worth significant money. But I liked the classic Mid-Century styling of these stamps and decided to take them with me on a whim. After a bit of research I discovered that they were Canadian 4 cent stamps in carmine color from 1963 (Scott catalogue #404). They were certainly interesting, but not worth more than face value. They are best used for their originally intended purpose - sending mail in Canada.
This entire episode got me thinking. Over the last two decades the more desirable investment grade antiques market has definitively split from the less desirable collectibles niche. High quality antiques have increased anywhere from 2 to 4 times in price over that time while glass, memorabilia and countless other collectible categories have simultaneously collapsed in value. But which side of this divide did stamps fall on?
It didn't take me long to find the answer: stamp collecting, also known as philately, is dying, albeit a long, slow death. Prices for most vintage stamps have plummeted; many now sell for only 5% to 20% of stated catalogue value. EBay has exacerbated this tendency, revealing that many issues of old stamps formerly thought to be rare or uncommon have actually survived in healthy numbers. Stamp collectors looking to sell their collections to dealers have suffered similar pricing trauma. Many dealers simply aren't willing to buy at all as they are already swimming in inventory that they can't clear.
Some stamp collectors deny the terminal decline of their hobby by pointing to the record prices that a few ultra-rare, ultra-desirable stamps have garnered at auction. For instance, the 1856 One-Cent Magenta issued by British Guiana sold at Sotheby's auction house for a jaw-dropping $9.5 million in 2017. An example of the world famous U.S. "Inverted Jenny" error stamp, accidentally issued in 1918 with an upside-down biplane on it, recently went for a princely $1.175 million at a 2016 auction.
However, record prices for the world's rarest stamps actually reflect the rise of the super rich in modern society. A handful of ultra-rare stamps get caught up in bidding wars between Russian oligarchs, Chinese billionaires or Silicon Valley technology CEOs, each of whom is intent on fulfilling his boyhood dream of owning the rarest fill-in-the-blank (stamp in this case) in the world. It only takes two obscenely rich bidders competing against each other to send the price of a truly rare stamp into the stratosphere. Ultra-rare and desirable stamps have effectively become trophies for the super-rich.
But this phenomenon doesn't do much to reverse the slow death of the broader hobby of stamp collecting. Every year stamp prices slowly drift inexorably downward while the collector base continues to age. In fact, the average age of a stamp collector is now over 60 years old. Rising prices for a few super expensive stamps does not reflect healthy demand for more pedestrian stamps from middle-class stamp collectors.
The grim outlook for stamp collecting is not helped by national post offices' widespread abuse of commemorative stamps and first day covers. The tendency to blatantly over-issue modern stamps has contributed significantly to the decline of the hobby. Treating stamp collectors as a profit center may boost government revenue in the short term, but malignantly erodes the hobby in the long term. In this aspect, stamp collecting shares parallels with the over-issuance of poorly conceived and designed modern commemorative coins by national mints.
As if postal abuse wasn't bad enough for stamp collecting, a precipitous decline in the volume of physical mail means that many younger people only encounter stamps with shocking infrequency. According to the U.S. postal service, when measured from its peak in 2001, estimated first class mail volume has collapsed by over 40% through 2016. And this trend shows no sign of abating in the near term. Of the physical mail that is still sent, a significant amount is either metered or uses perpetually unchanging "Forever stamps" (at least in the U.S.). Combine this with the ubiquitous rise of email, texting and online bill pay and it is easy to see that stamp usage, along with stamp collecting, is gradually dying out.
All of these trends contribute to a distinct lack of youth interest in stamp collecting. And children who do not collect stamps eventually become adults who do not collect stamps. Many stamp collectors have traditionally started as children who then abandon the hobby in their teenage years when other pursuits became more enticing. However, those exposed to stamp collecting early in life often circle back to philately again once they reach middle age or retirement. That circle of life in the stamp collecting community is now in terminal decline.
Now, let me be clear here; I don't think that stamp collecting is going to completely disappear. Yes, the numbers of active philatelists will probably decline dramatically in the future. And if you are hoping to make money by investing in stamps or selling your existing collection, you should probably reconsider.
However, there is a silver lining here. If you love stamps just for the pure joy of collecting them, then your chosen hobby is likely to become significantly less expensive in the future. Just don't expect a lucrative financial return from your vintage stamp collection.
