A market that turned £100,000 into £300,000 in the past 4½years - FACT
As Chief Executive of Stanley Gibbons, China is fast becoming a second home to me. Today, I want to keep you in the loop about how you can benefit from the "Chinese Stamp Revolution"...
China's stamp boom just keeps on going... like a bull in a China shop. Chinese stamps represent the biggest bull market in stamps right now and the perfect momentum investment.
The easiest way to make money is to ride the waves of growth. Get in to a rising market and you will make money. Your risk - make sure you get out before the wave crashes. I'll tell you more about timing on this later.
Forget the hyperbole; let's just focus on the facts...
3 times your money in 4½ years
We recently published the 8th edition of our China stamp catalogue (the only China catalogue published in English on the market). We published the last edition in November 2006...
That is a four and a half year gap. Plenty of time for prices to rise, especially in this exciting market.
I'm offering a FREE copy of this catalogue, worth £44.95, to new subscribers in our Chinese stamps investment portfolios.
That's not the exciting part though. Let me show you the numbers...
I haven't just "cherry picked" the best performers here. All of these stamps are either currently available to buy from Stanley Gibbons or were recently sold by us.
The prices quoted come from third party auction prices, mainly conducted in Mainland China and Hong Kong.
The performance tracks the change in prices between November 2006 and April 2011 - 4½ years. If you had invested £100,000 in 2006, you would expect to have a portfolio worth around £300,000 today. That's average annual returns of 44%.
Performance like this during a time when most investments went down in value shows just how useful rare stamps can be as a means of wealth diversification. The key is that rare stamps are an asset class not correlated with traditional investments.
You wouldn't have even needed to invest big to make similarly strong returns. An investment of around £5,000 in 2006 would be worth over £12,500 today, averaging 34% per annum growth.
This is a market supported by 20 million+ collectors. Compare that against a total available supply in the thousands and you can see why prices must rise across the board.
The one you really would have wanted to own is the miniature sheet "Mei Lan-Fang 3y" (depicting a famous Chinese actor). If you had bought this in November 2006 for £2,250, it would now be worth £20,000, a return of 789%!
The most famous stamp from China is the "1980 Year of the Monkey 8f". This is like the Penny Black of China. Everyone there knows this stamp and reveres it. As everyone wants to own one, the price just keeps rising. In November 2006, they were selling for £275 each on average. Today, they regularly sell at auction for £1,300, an increase of 373%.
The worst performer in the portfolio still went up 54%. Not bad during a time when most investments delivered negative returns.
The strength of the historic performance is there for all to see. So all we need to consider is, "will this continue for the next 5 years"?
Is it a bubble?
I think the term "bubble" is widely misused by financial commentators when referring to anything that represents a high growth market. There is validity in the concept though, that things can't go up at such high rates forever...
Ultimately, prices rise in accordance with demand against the inherent supply restrictions, which exist in the stamp world.
It stands to reason that the more expensive things get, the more collectors become priced out of the market. There will come a time when only the very wealthy have the funds available to participate in the market.
But, it is all a numbers game...
In China, there are over 20 million collectors, far more than the print runs of the stamp issues. This is in a country where wealth is rising. The Chinese elite get the importance of "tangible assets" in prudent wealth management and protection.
More and more money is flooding into the market. Naturally, this causes a supply squeeze.
It is not just the Chinese that are buying Chinese stamps...
"I would say presently that half of my buyers are from Mainland China and half are from outside China," said Louis Mangin, owner of the auction house Zurich Asia.
"Many Westerners also buy Chinese stamps. It is seen as a diversification and investment into China."
Stamp prices in China started at very low levels. Chairman Mao banned stamp collecting, which remained in force until his death in 1976. Since then, the Chinese have been frantically buying back their postal heritage scattered around the world.
But, it seems to me that highly sought after stamps still trade at very affordable prices. In my experience at auctions in China, this is the most liquid stamp market in the world. I have never before seen so many collectors bidding in a room at one time. It staggers me when I see the price of a stamp going above £100,000 and there are still a dozen collectors in the game.
One day, this may become a bubble. Right now, it is a simple high growth market supported by huge and rising demand against severe supply restrictions. Don't worry; I will let you know if I think prices become unrealistic in the future or if I witness a decline in the number of collectors bidding in auctions.
When this happens, it will be time to get out. Because you signed up to this newsletter service, you get inside information ensuring that you can act before the herd.
One final point on this...
I have approached some of the biggest investors in this market. They have collections of Chinese stamps worth £millions. I asked them whether they would be interested in selling part or all of their collection to Stanley Gibbons for a fair price.
Not one of them would entertain the idea of selling. They told me that they couldn't think of anywhere better to put their cash right now! If the "big guys" are still holding (and still buying) then we are nowhere near bubble territory.
Let me in
The only downside is how difficult it is to get in to this market in a meaningful way. Supply is so tight that we simply cannot keep up with demand.
Demand is always far in excess of the available supply in the market. Bear in mind that we only buy quality and that is not in abundance.
We do however have a small selection available to purchase today (approximate value: £100,000) so you have a brief window of opportunity to jump onboard the Chinese stamp bull market.
To order your Chinese stamp portfolio, please complete the online subscription form below (minimum order size: £5,000):
For those of you who are too slow and miss out on this opportunity...
We continue our relentless pursuit of Chinese rarities in top quality condition. We aim to be in a position to offer more later in the year, but can't guarantee this.
The Chinese collectors don't yet discriminate against the quality of the stamp, but we do. We believe in only buying stamps in superior condition to the norm. We are able to buy quality examples in this market at the same price poor quality examples trade for.
We expect our investors will benefit from a "quality re-rating" when the Chinese ultimately begin to appreciate the premium rarity value of quality examples.
That is on top of the underlying growth in this asset class. The recent Merrill Lynch Wealth Report states that there are around half a million Chinese millionaires, (31% more than in 2008).
According to Barclays Capital, the Chinese account for 12% of the world's luxury goods market. The Chinese want to show off their new wealth to the world. The stamp market is just one part of this revolution.
Big Market, Big Opportunity
I believe the Chinese market will remain highly lucrative for the foreseeable future. It is already the biggest and most important stamp market in the world.
Because of that, we are looking to open an office in Hong Kong later this year. This will help us to increase our sources of supply. It will also ensure we can help you to get the best price on exit, when you come to realise your portfolio in the future.
To summarise the economics, you are:
Investing in a tangible asset;
In a growth market;
Not tied to the strength of the UK pound, US dollar or Euro;
Non correlated with other asset classes;
Benefits the most in times of high inflation;
If you have any further questions, please e-mail me at email@example.com and I will either respond to you directly or ensure one of our investment portfolio managers deals with your queries promptly.
Opportunities like this don't come round often, particularly in today's economic climate. You have the chance to invest in a tangible asset, in a high growth market, backed by a country which isn't bankrupt (a rarity in itself these days).
PS. All stamps come with our lifetime guarantee of authenticity. We also offer free safe storage and insurance during your investment term. We want to make sure you can invest hassle free with peace of mind.