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The 5 Golden Rules

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The 5 Golden Rules to maximise your returns in the prestige collectibles market

Sometimes it is worth stating the obvious. In business, I have made far more money doing the obvious thing than I have coming up with complex new ideas…

If it isn't straightforward - forget it - I'm not interested. Life's too short!

Making money in collectibles is as easy as 1,2,3… well, actually, 1,2,3,4,5! 

Today, I want to share with you my secrets to making money in collectibles. I hold a proportion of my own investments in the prestige collectibles market. My total average growth in the past 7 years…

33% per annum.

Better than any of my other investments have performed in that period.

You can do the same, by following my simple advice on how to select the best collectibles to invest in. 

In fact, I've made it even easier for you – I've selected some for you!

I have pre-selected items with a combined value of £2 million. That's the subscription limit. They all pass my stringent 5-point test.

So, now let me explain the "5 Golden Rules" to successful collectible investments…

1. Rarity

Only invest in collectibles where there are a small number of surviving examples or in unique pieces.Limited supply is the biggest factor in driving price increases. Simple fact is you only need two people bidding on a unique item at auction for the price to go up!

2. Condition

Aim to purchase the best quality examples of rare items in existence. At the least, focus on better than average quality examples.From my experience, premium quality examples regularly sell at auction way above estimates, thus increasing your chances of premium returns.

Specialist collectors have become far more "condition conscious" in recent years. The result is that they are all searching for the same "holy grail" in terms of quality, pushing prices up of the best quality examples.

To put into context, a rare stamp with minor condition defects can realise only 60% of catalogue value at auction, whereas a pristine example could sell for 200%.

3. Authenticity

Everything sold by Stanley Gibbons comes with a lifetime guarantee of authenticity.

I cannot stress enough the importance of proving authenticity when trading in the collectibles market.

To enhance investment returns, always seek to buy items with a well-documented history and provenance. For example, items that belonged to high profile famous collections in the past add value to an item.

This can create the "prestige value" in that buyers will desire the ownership of something once belonging to one of the all time great collections. 

4. Liquidity

Liquidity is as important as the first three rules added together. Obviously, there must be a trade off between rarity and liquidity. By definition, unique items cannot be liquid.

However, it is not about how regularly an item trades. The important thing is to invest in areas where there are a healthy number of potentially interested collectors. This will help ensure you can exit quickly when the time comes to realise your investment returns.

 

By way of example, consider a mint penny black. There are thousands of potentially interested collectors. Mint penny blacks are however very rare and we are able to buy only a handful in any given year. Demand always exceeds supply – makes for a sure investment bet!

Some items, whilst rare, are too specialised for investment purposes. Stick to popular areas of collecting where levels of interest have been high for a sustained period. 

5. Price 

This is the classic value investment principle. Always seek to buy at below fair value. Defining fair value is difficult, but, as a rule of thumb, most traders consider "mid auction estimate" as fair value.

Sometimes, though, auction realisations are way below "fair value". This can be down to many factors such as:

On the day of the sale, the right collectors were not bidding

A poorly promoted auction where potentially interested buyers were not aware of the sale

General fear in the market usually connected to external economic risk. This is the classic Warren Buffett principle of being greedy when others are fearful.

Items trading in the wrong market. It is usually cheaper to buy collectibles appearing at auction outside of their home market.

This is, in essence, our primary expertise and the key aspect of our service to you. 

We have the specialist expertise and buying power to buy at substantial discounts to fair value. Consequently, we are able to offer investors the opportunity to get in at a good margin of safety and provide the potential for higher investment returns.

The "5 Golden Rules" Selection

I have selected a range of items for you that pass the "5 golden rules test". These are all collectibles I would be happy to own personally.

Bear in mind that our internal specialists had already considered all of the above factors before recommending them as suitable for investment. What I have done, effectively, is pick the "best of the best" for you.

Let me give you one example and my rationale behind its selection…

1840 1d Black, Plate 1a (SG 2)

An exceptional pair of Penny Blacks of the highest rarity

 

Superb four margin horizontal pair, lettered SE-SF, unused with original gum.

Printed from an early impression, 

with beautiful deep colour and gum.

An exceptional pair of the highest rarity.

1991 Dienna and 1994 British Philatelic Association certificates of authenticity.

Ref. P12305101 

Price: £70,000

Taking each of the golden rules in turn…

1. Rarity

It is difficult enough to find a mint pair of penny blacks. What makes this even more special is the plate number. This is the equivalent to a first edition. This marks the beginning of philately being from an early impression.

2. Condition

Not only is this item incredibly rare, the quality is remarkable. You would think it was printed yesterday, not 172 years ago! 

The margins are absolutely divine. Quite simply, you won't find better quality anywhere.

3. Authenticity

This item comes with two independent certificates of authenticity.

Not only that, this philatelic treasure most recently belonged to the best collection of early GB philately ever assembled. That is not just my opinion…

That is the opinion of the world's most respected philatelists. This was part of the gold medal-winning collection at the prestigious London 2010 Exhibition. 

4. Liquidity

Penny blacks are the most collected stamps in the world. New interest from the Far East is fuelling demand further.

Penny blacks of this quality will always sell at auction and often at premiums to estimate.

5. Price

There is always a matter of opinion here, but, as I bought this item, I know I negotiated a good price. I also believe that it could fetch in excess of £100,000 at the right auction at the right time.

The Right Time To Invest

My selections include not just stamps. I have also selected a number of rare coins, historical documents and military medals. This provides you with the opportunity to build a well-diversified portfolio in different areas of collecting.

I believe the items I have selected are special. This is your chance to maximise your returns in the prestige collectibles market for minimum effort.

To be honest, I won't be undertaking an exercise of this magnitude anytime again soon. 

The reason I did it this time was that, without any doubt, we currently have the best quality offering of collectibles we have ever had in my 13-year career.

Some exceptional buying opportunities presented themselves to us recently and, as a result, I am telling all my friends that "now is the time to buy". 

The biggest challenge in our market is supply. It is unlikely we will be in a position to offer such a top quality selection of collectibles for long.

How to subscribe 

Please complete the online subscription form by following the link below, providing your details and the value you would like to invest:

 

Click here to subscribe to "5 golden rules" collectibles portfolio

 

Alternatively, e-mail us directly with any further questions you may have to [email protected] 

 

The total value of items I have selected is £2 million, but you can start at £10,000. I would urge that you at least take a look at the strength of the portfolio we can build for you. 

 

We devote 10 times more effort to buying the right quality than we do to selling what we buy. The value of our service is in this effort. 

 

This offer can be used in conjunction with any of our other investment products (Collectibles Growth Plan, Flexible Trading Portfolio and Portfolio Builder), subject to investment size and terms and conditions.

 

I have done all the hard work for you. As with all investing, if you buy the right quality at the right price, your returns will naturally follow...

 

By Mike Hall - Chief Executive - Staley Gibbons 

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