I spent the last 18 years in the Finance Industry -- the world of stocks, bonds, Fed monetary policy, breaking news and screaming traders. I was fortunate. Upon leaving that business in late 1999, with the constant help of my wife Deborah, I managed to slide us right into our full time Internet stamp and Postal History business. Our quality of life has never been greater, and I have found that many of the skills learned in "the markets" are very useful and easily transportable to our new occupation.
One of these skills is market analysis. While I will never pretend to be a full time market analyst, every trader must be able to make observations about what he sees going on around him, assimilate the data and develop a "world view" from which to operate. The stamp market, while "just a hobby" is a market like any other, and is subject to market forces. It is certainly possible to enjoy the hobby of philately without ever being aware of, or caring about, these forces. In fact, most collectors do exactly that. If you are among that group, the rest of this article will hold little or no interest for you, however if you have ever wondered about the dynamics behind some of the stamp market trends of the last few years, the views of this ex-trader may hold some insights for you.
The most common refrain heard in discussions about the state of the hobby is, "there are too few young people taking up the hobby. The hobby is in a state of decline". There is no question that the first part of this statement is true. Stamp collecting is having a very difficult time competing for the hearts and minds of young people when pitted against their current activities of computers and computer games. As a father to one teenage son, and an uncle to seven others ranging in ages from 8 to 15, I can vouch firsthand for the difficulty of generating an interest in stamp collecting.
Part of the problem is the current general impression of stamp collecting as an activity for "nerds". Recently, I watched a
television episode of "Relic Hunter", certainly a show for teenage boys if there ever was one.
When Tia Carrera, the sexy star,
asked another character, a CIA agent, what he did in his spare time he answered "I collect stamps -- anything wrong with
that?". Her reaction of suppressed mockery and disbelief would have been a sufficiently clear signal to any aspiring teenage
boy that this is not an activity to engender respect in the female population! Possibly a better answer would have been "I study
the history of the world. My favourite medium is the stamps that have been issued for the last 160 years".
A dealer I met at a show last weekend told me an interesting story on this subject. He had a two year old complete set of Scott catalogs that he was determined to give to "the first kid who came to my table. It was a three day show starting Friday. I finally gave them away late Saturday afternoon!"
The lack of young newcomers, at least in North America and Europe, is a demographic fact. However the stamp market is not uniformly weak, there are many areas of dramatic strength. How can we explain this? In this writer's opinion, it's all in the demographics, but one must look at the global picture.
Here are some personal observations of portions of the stamp market, and how my trader's "world view" explains what I see.
World view explanation:
World view explanation:
The first two are demographics in another form. When we discuss the North American and European collecting population, we tend to ignore money, like it's a relatively constant element. However, this has not always been true! There is a reason all those Germany commemoratives of the late 1940's and early 1950's are so highly valued now -- nobody had the money to buy them during the reconstruction!
The availability of more spending power has created more collectors, of areas that were once unpopular in the rest of the world. The result is expanding demand for stamps with a limited supply, since why should anybody have put away stocks of something that was unpopular?
So what about the Internet? An axiom of trading is that "price cannot go up in a vacuum". For prices to rise, there must be some, limited supply. Then, when a collector sees the availability of desirable things, and becomes aware that he can purchase these things if he buys aggressively enough, he begins to do just that, competing with other collectors who have discovered the same joy from these items. The Internet has, almost overnight in historical terms, allowed collectors and dealers around the world to offer items to collectors in these expanding markets, soaking up the available supply in the rest of the world.
These are the growth markets for stamps in the future. Financially improved adult populations in Asian and some Latin American countries are replacing, on a global scale, the loss of the young population in the countries with a long standing philatelic population.