Armand Rousso Speculators Magazine

  Where Wall Street intersects with Pearl Street, just around the corner from the New York Stock Exchange, the International Stamp Exchange makes it home. On the floor of this exchange there are no frantic traders shouting orders. There are only the even tones of conversations of the men and women who operate computers that link buyers of rare stamps with sellers.
There was no Black Monday here. The week of the stock market crash, and index maintained by the exchange comprised of 25 rare stamps rose 5 percent. Trading volume on the exchange has been up ever since.
Rousso is one of the best known stamp collectors in the world. As a child he traded stamps for Chinese food. More recently, he traded millions of dollars or rare stamps for real estate, yachts and private jets.

Speculators: Are investment grade rare stamps undervalued now?

Rousso: I cannot predict the future but we can talk about the facts of the past. In the last 140 years, stamps have always gone up in any 10-year period. According to the way I’ve seen stamps perform over the last 30 years, stamps go up in cycles. Five years of going up in a very fast market are followed by five years of consolidation. The first time stamps went up 30 years ago the approximately doubled in five years; during the next five years they stabilized or stayed the same. In the next cycle stamps tripled in five years. The five years of consolidation that followed caused stamp prices to fall about 10-20 percent.

Speculators: When is the best time to buy rare stamps?

Rousso: The best time to buy rare stamps is like anything else. You should buy at the lowest point possible and sell at the highest possible. Nobody can predict the future, but when stamps have not gone up for five years, you can pretty well say that if you are not at the lows you are not very far from them.

Speculators: How does the International Stamp Exchange work?

Rousso: The stamp exchange works just like any other exchange; it’s a free market where you bid and an ask on all stamps. If somebody wants to sell a stamp, they send it to the stamp exchange where our experts will verify the quality and issue a certificate of authenticity of that stamp and will place it on our electronic exchange at the price the seller wishes to sell it for. We also have about 20 floor brokers who deal everyday with stamp dealers, investors and collectors. When one of their customers gives them a bid, the floor broker can put the bid on the exchange. Then we have a bid and we have an ask for one stamp. You have hundreds of collectors who want to sell the same stamp. So that’s what makes it a dynamic market. When more people want to sell, the prices go down. When more people want to buy, the price goes up, just like in the stock market. The buyer is not charged a commission, but the exchange charges the seller 10 percent.

Speculator: What factors make a stamp valuable to collectors?

Rousso: The harder it is to find the stamp, the more valuable it is. Together with the rarity you have the question of quality. Just like in diamonds, you can have a one carat diamond that is worth a fortune because it is in top quality, and a one carat diamond with a defect in it that might be worth only a fraction of the top quality diamond. The same thing applies to rare stamps. If a stamp is torn or has a defect it will only be worth a fraction of the amount it would be worth if it is in perfect condition.

Speculators: What about stamps with errors?

Rousso: Errors are extremely sought after by collectors. As an example, you have the famous inverted candle stick stamps known as the CIA stamps. These stamps made the front page of The New York Times. They are a very valuable error; only 400 of these stamps exist and 100 have been discovered. As funny as it may seem, it was an employee of the CIA who found the stamps. You also have the story of the upside down Shah of Iran stamps that were recently discovered.

Speculators: What advice would you leave our readers with?

Rousso: I would advise them to get the home study course from the exchange, to buy different stamp catalogs, to find some local stamp dealer where they live and to start to talk to them about stamps. Start to learn more about stamps. The more they learn, the more I know they will become enthusiastic about stamps.