When You Can’t Lick the Collectibles


When you don’t give a lick about stamps there is still a way to protect purchasing power with collectibles.

Yesterday’s message Protect Purchasing Power With Collectibles  looked at ways to invest in stamps via Stanley Gibbons a 150+ year old British form that is one of the leading stamp experts in the world.

Being involved in collectibles can be interesting, fun and profitable.  However some investors don’t give a lick about stamps.

jenny invert stamp

The  Inverted Jenny stamp… worth more than a lifetime of savings?

For example, this stamp is known as The Inverted Jenny, is a misprinted 1918 US postage stamp with the image of the Curtiss JN-4 airplane upside-down.  Only 100 of these invert stamps was ever found and one was sold at a Robert A. Siegel auction in November 2007 for US $977,500.  In December 2007 one was sold for $825,000.

However the respected “Scott Specialized Catalog of US Stamps & Covers 2011”, is cataloging a single Inverted Jenny stamp for the price of $500,000.

Stampcatalogue.com explains this:  Scott catalog suggests an unused single of the Inverted Jenny is worth $500,000. However, typically stamps of this rarity means that the catalog is thrown out and the value depends on what the highest bidder is willing to pay, which is often many times above what the catalog value would suggest.

Such stamps come up for auction only rarely so collecting just one or a few stamps is not the best way to invest in stamps.  This type of uniqueness in collectibles leaves some investors unsettled.  The Stanley Gibbons collectible program balances out such ups and downs with diversification and expertise, but some investors do not want such fuzziness.  They prefer the instant pricing and liquidity of a stock market.

Another way to invest in collectibles is via the stock market.  One can simply invest in shares of Stanley Gibbons.  They are traded on the London stock exchange.

The Stanley Gibbons Group PLC sysmbol is SGI.L

Here is a share chart showing the Stanley Gibbons share price in British pounds to March 2013.

stanley gibbons shares

Here are excerpts from their 2012 annual report.

The Stanley Gibbons Group plc, whose principal businesses comprise Stanley Gibbons, Fraser’s Autographs, bidStart and Benham First Day Covers, today announced its audited results for the year ended 31 December 2012.

Key Financial Highlights

•    Sales of £35.6m (2011: £35.7m), reflecting a shift in sales mix to higher margin business.

•    Adjusted profit before tax* of £6.0m (2011: £5.4m, as restated) up 11%

•    EBITDA** of £6.5m (2011: £5.8m) up 12% •    Adjusted earnings per share of 21.44p (2011: 19.40p, as restated) up 10%

•    Gross margin of 43.7% (2011: 38.7%)

•    Internet sales from core website, www.stanleygibbons.com, up 55% in the year (2011: up 27%)

•    50% of revenues now from outside UK (25% in 2009)

•    Proposed final dividend of 3.75p per share (2011: 3.50p per share) up 7%, giving a total dividend for the year of 6.50p (2011: 6.00p) up 8%

•    Cash at 31 December 2012 of £6.8m*** (2011: £3.2m)

•    Stock at 31 December 2012 stated at historic cost of £20.7m (2011: £16.8m) sufficient to deliver future organic growth from core trading activities.

Key Operational Highlights

•    Acquisition of bidStart, a US-based online collectibles trading platform in November 2012 for a total consideration of $1m, provided a base from which to leverage the Stanley Gibbons brand in the low value/high volume segment of the collectibles market

•    Successful placing and fundraising of £6m to fund the consideration for bidStart and to provide funds to develop its trading platform

•    Appointment of the founder and vendor of the bidStart website, Mark Rosenberg, as Group Chief Digital Officer based in the USA and Paul Zimmerman, formerly of Play.com, as Director of E-commerce Operations, based in Jersey to lead the implementation of online strategy

 •    Increased gross margin achieved from acquisition of top quality collections at attractive values

•    Hong Kong office opened in September 2011, contributed sales of £2.6m and profits of £0.7m in the year ended 31 December 2012, including sales of £1.9m transacted to residents outside of Hong Kong

•    Prevailing strong demand for Chinese rare stamps with sales up by 83% to £2.1m

• Auction commissions up 60% in the year benefiting from the sale of the
prestigious “Arnhold Collection” achieving a total realisation of £1.6m

• Sales of rare coins and military medals were up 31% to £1m, with profit
contribution up 80%

• Benham first day covers benefited from sales of commemorative collectibles related to the Queen’s Diamond Jubilee and the London 2012 Olympics

Outlook

• Stanley Gibbons is well placed to become a leader in the global market for collectibles through the provision of key services online and by acquisition of quality businesses in rare stamps and related collectibles

• bidStart online trading platform and associated fundraising enables the acceleration of the delivery of the key aspect of the Group’s online strategy

•    This strategy is further supported and complemented by our international offices and planned growth of our auction business

•    The favourable economic fundamentals for collectibles have never been stronger and should ensure appreciation in value for the foreseeable future and an effective hedge against inflation

Martin Bralsford, Chairman, commented:

“The continued growth in the profitability of the Group in 2012 was achieved at the same time as substantial investment was made and corresponding progress in the implementation of our broader online strategy, which is expected to deliver material growth in future years.

Specifically, the bidStart acquisition brings us the technology required to develop the global online collectibles trading platform. The successful fundraising completed in November last year provides the capital required to invest in the acceleration of the roll out, backed by the prestige our brand carries in the global collecting community.

The market for rare collectibles continues to demonstrate its resilience. This was evidenced by the performance of the benchmark GB250 Stamp Price Index over the past year, showing growth of 11% in 2012.

Following the acquisition of bidStart and the recruitment of top quality senior personnel in our online division, the Board looks forward to its enhanced business.

You can have a free copy of the Stanley Gibbons annual report and updates on collectibles and Stanley Gibbons by clicking here.

You can buy shares of Stanley Gibbons from Michael McDonald at Aegion Capital. Contact Michael at mmcdonald@aegiscap.com

Gary

How to Gain With Multi Currency Value Investments

Old Accord Creates New Profits – Multi Currency Investments.

Earn more with multi currency stock market breakouts.

Improve Safety – Increase Profits

Learn how to improve the safety of your savings and investments by selecting good value and diversified investments in a multi-currency portfolio.

Few decisions are as important to your wealth as the value of the markets and currencies you invest in.  This has been our area of expertise since the 1970s and we have worked with and advised some of the largest currency traders in the world.

Gain Protection First – Against the Dollar’s Purchasing Power Loss.  In 1913 the The Federal Reserve Act created the Federal Reserve Bank to protect the purchasing power of the US dollar, which has since lost about 94% of its purchasing power.  Here is its price compared with gold since 1900.

priced in gold

Dollar chart from pricedingold.com (1)

The Fed has let the dollar lose most of its strength plus has allowed interest rates to fall so low, that safe investments cannot keep pace with the drop in purchasing power.

multi-currency-chart

Chart from Grandfather Economic Report (2)

Many investors have forgotten about the risk of a falling dollar because the greenback has been strong for the past five years.  This temporary dollar strength came after the great recession of 2009 just as there was temporary dollar strength after the great recession of the 1980s.  Then about six years after the recession, an agreement was made by major governments to weaken the dollar.

There was a severe global economic recession affecting much of the developed world in the late 1970s and early 1980s.  The United States and Japan exited the recession relatively early, but high unemployment would continue to affect Europe and the UK through to at least 1985.  As a consequence between 1980 and 1985, the US dollar had appreciated by about 50% against the Japanese yen, Deutsche mark, French franc and British pound, the currencies of the next four biggest economies at the time. Then the governments reached an agreement and exchange rate values of the dollar versus the yen declined by 51% from 1985 to 1987.

Now the world is again in the same place.  The recession is over.  Europe is a bit behind in recovery and the dollar is higher than before the recession.

There is no reason for the greenback to be  strong.

The agreement in 1985 was called the Plaza Accord.   Over just two years the greenback dropped nearly 50% versus other major currencies.  The next accord will generate great profits for those who know what to do while it ruins the purchasing power of dollar back investments.

The strong US dollar and low interest rates have created one of the biggest stock and multi currency breakout opportunities in history.  Learn how to create a plan to profit from multi currency shifts ahead.

One reason for the potential gains is that stock markets and currency values are cyclical.  Due to low interest rates created by the 2009 economic downturn, the US and a few other equity markets have risen to some of their highest prices, ever.  These markets offer very poor value now.  The steep valuation creates incredible profit potential but also hides some enormous risks.  Learn how to develop an investing strategy based of earnings, cash flows, dividends and book values to increase potential for profit and reduce the risks.

Next Extra Profit Created by Value Breakouts

Over the history of US equity markets, the  price of overall markets have risen about 9.1 percent, respectively, compounded annually.  Yet over more than a hundred years of stock market activity,  a majority of the profits have come from just a very few dramatic breakouts.

Equity markets are ruled in the short term by emotions that create unpredictable ups and downs.  Numerous fears of defaults, worries of double dip recessions, high unemployment, concerns about fiscal cliffs, hold investors back.  Yet global population growth and advances in production and prosperity are relentless economic fundamentals that increase value.

When fear holds back a a fundamentally rising value, rising profit potential grows.  Values increase as prices stagnate.  Then markets break free and rocket upwards creating wealth, prosperity and growth.

Find out which breakouts are likely to take place next.

Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns create war.

Here is the war stock cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Learn how the Cyber War (WWIV) may change the way we live and act and how this will affect currencies and investments.

Learn:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios), but his big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of outperformance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  Buffett leverages his portfolio at a ratio of approximately 1.6 to 1.  This rate of expansion by the way is called the “Golden Ratio”.  It is a mathematical formula that controls the growth of most natural things; trees, the shape of leaves, the spiral of shells, as well as the way economies and societies grow.

We’ll sum the strategy, how to leverage cheap, safe, quality stocks and for what period of time based on your circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

Enjoy investing more with slow, worry free, good value investing.  Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.

Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.

Learn how to span the behavior gap.  Behavior gaps are among the biggest reasons why so many investors fail.  Human evolution makes fear the second most powerful motivator.  (Greed is the third.)  Fear creates investment losses due to behavior gaps.  Fear motivates us more strongly than desire.  By nature investors are risk adverse, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

Combine your needs and capabilities with the secrets and the math of our good value model portfolio.

Share ideas about my good value portfolio.  My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.

Markets included in this portfolio are:

• Norway
• Australia
• Hong Kong
• Japan
• Singapore
• United Kingdom
• Taiwan
• South Korea
• China

These markets have been chosen based on four pillars of valuation.

• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation

Learn how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.

To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country.  These country ETFs provide diversification into a basket of equities in the good value countries.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.  You are investing in a diversified portfolio of good value indices.  A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Learn the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

The results of this test  show how you can gain on any purchase of country ETFs.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2017” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

Gary

(1) Dollar chart from pricedingold.com

(2) Grandfather Economic Report

 

 

 

 


Related Artices

If you enjoyed this article "When You Can’t Lick the Collectibles" you may find these related articles of interest too: