Quality v. Quantity: No Contest

Gary Watson.

Based on my 25 years experience in the collectibles market, I can confidently make the following statement. One of the biggest mistakes made by new collectors is to assemble their new collections too quickly. While enthusiasm for their new pursuit is to be encouraged, their lack of restraint can result in costly mistakes.

This is as true when buying antique and classic stamps as it is when purchasing wine, art, or any other prestigious item.

My advice is to approach collecting in the same way you would go about setting up a new business. You need to have the collector’s equivalent of a Business Plan. What are your goals? How do you intend to achieve them? What is your budget? What is your timeframe?

You also would be well advised to seek out the services of astute, experienced and knowledgable philatelists. Many in this market are willing to assist the new collector, sometimes without even charging a fee. Ask around and get a feel for the collectors and dealers who may be able to assist you.

Serious collectors can provide you with valuable insights into what is good, from what is bad or indifferent. However, as amateurs, they are rarely in a position to advise on values. Retail dealers can provide the material but it should come as no surprise that there are some who will have no compunction in selling the neophyte any rubbish that happens to be at hand.

While it may seem that I am speaking out of self-interest, I firmly believe that public auctions offer the best opportunities for the new collector to learn about both the material and its value. I routinely advise newcomers to request catalogues from all the major firms, and to attend the sales of more than one auction house.

Before the auction, attend the viewing and inspect all the items that may be of interest to you. If two items appear to be the same but are estimated at different levels ask why that is the case. Enquire of the specialist staff what the best items are in a particular section, and why?

Once the auction has begun, the serious learning begins. Attend with an experienced auction-goer and pump him or her for information. Look at what is selling, and what isn’t. What is popular, and what isn’t? Assess who is buying. Unless you are confident in what you are doing, resist the temptation to participate: there is plenty of time for that later on.

Afterwards, analyse the selling patterns, the clearance rates in different sections, and the overall result. It is almost inevitable that the greatest competition, and the highest prices, were attracted to the finest material.

Many collectors make the mistake of thinking they can’t compete for top quality material. As with any major purchase, you will do better to conserve your resources, to “keep your powder dry”, until you can afford to participate. It is just dumb to settle for inferior stamps because you convince yourself that they are “all I can afford”. (Perversely, the demand for lesser material is high enough that the very fine stamp often sells for little more than the average example.)

The value of this advice may not be appreciated until the time comes for you to sell. Recently I have auctioned two divergently different but in some ways comparable collections of classic Australian stamps that reinforce this point.

One client had spent about 20 years buying superb examples of Victoria’s first stamps, known as “Half-Lengths”. He had acquired only about 50 items, mostly single stamps. The other was keen on early Tasmanian issues. In only five years he purchased several thousand of these stamps.

Both gentlemen had spent significant sums on their collections. The first was meticulous in his selection of new items for his small portfolio. The second couldn’t spend his money quickly enough and siphoned up anything that was available, provided it was cheap!

Guess what? The “Half-Lengths” collector quadrupled his money. Many of his stamps sold for record prices. The Tassie buyer lost 60% of his “investment”. His stamps were spurned by discerning buyers and mostly ended up with other careless newcomers.

In collecting antiques one must always avoid a range of “traps”. My vendor of the Tasmanian stamps had blundered into most of them.

1. He lacked knowledge. He hadn’t studied his subject. He was unskilled in picking forgeries, repairs, and fakes. He didn’t know a postal cancellation from a revenue marking;
2. He hadn’t developed an eye for quality and couldn’t tell a gem from a dud. He failed to appreciate that quality is a key determinant of value;
3. He didn’t know he was being ripped off. He made many purchases from a couple of friendly dealers who happily took him to the cleaners;
4. He lacked caution. He bought many stamps that should have been expertised but did not insist on certificates of authenticity; and
5. He placed his confidence in advisers who simply did not deserve his trust, or his money.

This last point reprises what I said earlier. This poor guy trusted the wrong people. What he needed was a mentor who would do the right thing by him, train him up, assist him to spend his money wisely. What he got was a couple of hard-hearted operators who smiled broadly as they ripped him off.

Out of all this, something could have been salvaged if he had at least understood the first law of collecting: “Buy quality”. Even if he had no knowledge, and bought in unpopular fields, and paid too much for his stamps, he would still have done reasonably well if he had insisted on acquiring only stamps of the highest quality.

A major British dealer once said “Quality and the pleasure of ownership last long after the pain of the price has been forgotten.” In any luxury market there is no room for rubbish. Quality is King. You don’t need to be ultra-fastidious but, with the possible exception of truly rare stamps, you would be wise to avoid buying items with defects.

15th June 2005