As I See It...
By James E. Lee
(From Newsletter No. 54)
|Lessons that I
from Collecting – Part I
Generally speaking, the key pieces missing from your collection will return to the market about every ten years. An exception to this rule was the December sale of the "Whitpain" First Bureau Issue collection offered by Robert A. Siegel Auction Galleries, Inc. This collection had been built over a period of 50 years. Portions of the collection had never been offered publicly. So how do you put a value on material that has been absent from the marketplace for such an extended period of time. Lesson 1: You don’t.
The "Whitpain" sale like the 1999 sale of the Finkelburg essay and proof collection, the 1990 sale of the Brazer/Joyce collection, or the 1956 sale of the Hackett collection make up those seminal buying opportunities in philately. In 1990, I had a long list of firm bids for the Brazer sale and bought almost nothing. I decided to change my strategy for the Finkelburg sale. This time I went into the sale with absolutely no preconceived notion as to the value of any lot. The floor at the sale would determine the value. My only decision was to top the floor bid or not. This strategy paid off for both me and the clients I was representing. They bought everything they wanted and I wound up with a very large pile of fresh new material as well. At the time the prices seemed very strong.
However, 11 years later, almost all of the material is gone (at a profit) and I wished that I had bought even more at the sale. As a collector or dealer one must realize that when a collection like Finkelburg comes to the market it is truly a once in a lifetime opportunity that cannot and will not come around again. Falk’s collection in many cases had kept many pieces tied up for over 70 years.
When the "Whitpain" collection came up in December, the very same strategy was employed. The clients I represented bought every lot of interest except one and my success rate was beyond my wildest dreams. As with Finkelburg, the prices paid will seem cheap in a couple of years. Lesson 2: "Rare important pieces never go down in value".
Lesson two was learned many years ago during a conversation with Richard Champagne. It is a bold statement and worthy of some reflection. First, let me say, that rare does not necessarily mean expensive. If you search for years for a certain cover for your collection and one day you find it at a bourse for twenty dollars, I doubt that you would, years later, sell it for that same twenty dollars. At the time you bought it your knowledge bested the market. Something that elusive is most certainly worth more than what you paid. Collector and dealer want lists are forever bulging with elusive items and, when found, price is usually not the first consideration when deciding to purchase them.
Lesson 3: Quality is the hallmark of value. Whether you are collecting the 1847 issue on cover or have a specialized collection of the 1940 Famous Americans, the quality of your material will determine the ultimate value of your collection. This principle guided my quest to build a collection of domestic usages of the one-cent 1861-67 issue. For a period of just over 20 years, I followed the blue print that I had developed for the collection and sought out the finest examples that I knew existed. (The blueprint was developed from scouring countless auction catalogs from the past 50 years.) When I sold the collection it brought a three fold return.
One of my favorite covers had come from the Newbury collection. It had a one-cent (63) and five-cent red-brown (75) paying double the domestic rate from occupied New Bern, N.C., and going to Boston, Mass. The cover was acquired from the late Harvey Warm for what at the time seemed like an outrageous sum, $850. A leading New York auctioneer bought it from me for $2,500 and held it for a period of years. He removed the five-cent stamp and offered it along with the balance of the cover at auction. If my memory serves me right it brought over $7,000. That five-cent stamp was perfectly centered and would probably grade 98 today. Whatever you collect keep your focus on quality.
Lesson 4: "If you have the opportunity to buy something rare, buy it, for eventually someone will want it." This lesson came by the way of the late, legendary Robert Siegel. Philatelic material moves through the marketplace via auction or retail dealers. What doesn’t sell directly to collectors at auction is acquired by dealers. The dealer now becomes the owner of the item until another dealer or collector buys it. The market is, thus, like a giant holding pattern until the item finally lands in a collection. The dealer support for the auction market is important since there is never enough collector demand or money to buy out an entire auction sale. Just based on the natural timing of a sale opportunities will arise for knowledgeable collectors and dealers to acquire rare and important things.
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