A stamp described as the world’s rarest—the British Guiana One-Cent Black on Magenta—sold for $9.5 million recently. That price eclipsed the previous record of $2.2 million set in 1996 for a different stamp, though it fell below Sotheby’s pre-auction estimate of $10 million to $20 million.
Whenever a collectible sets a new price record, it’s natural to ask if that asset class has moved into bubble territory. And while that’s possible, experts say, several factors argue against such a conclusion for today’s stamp market.
First, the British Guiana One-Cent Black on Magenta is unique. Its appearance on the market was compared to seeing da Vinci’s “Mona Lisa” be put up for sale. Thus, its latest sale price isn’t fully indicative of the broader stamp market’s performance.
Second, the broad market price indexes for collectible stamps don’t look bubbly.
The Linn’s U.S. Stamp Market Index, based primarily on fine and very fine stamps tracked by Linn’s Stamp News, was down 1% from April 2013 to April 2014.
According to Linn’s, prices for 19th-Century U.S. stamps specifically fell 2.3% over the past year or so.
Meanwhile, prices on Twentieth-Century stamps decreased 0.2% over those 12 months ended April 30, though airmail prices were up 3.2% for the period.
From an international perspective, the GB250 Index, which tracks the top 250 Great Britain stamps over the last 10 years, increased 3.4% from 2012 to 2013.
Finally, the overall market for investment-grade stamps has been steady, according to some experts.
London-based coin and stamp dealers Stanley Gibbons, which provides data for the GB250 index, says this index has never had a negative year and had a compound annual growth rate of 11.9% over the last 12 years.
The GB30 Rarities Index, which tracks prices of 30 of the most rate and highest-valued U.K. stamps, has had a compound annual growth rate of roughly 10% for the past 40 years.
Keith Heddle, global head of investment with Stanley Gibbons, sees several forces supporting demand for rare stamps, at least for the foreseeable future.