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HOW CAN WE HELP YOU

WHEN SHOULD I REALIZE THE VALUE IN MY COLLECTION?
NOTES FOR THE ADVICE OF COLLECTORS

by WARWICK PATERSON

SPECIALISED AND SUPERIOR NEW ZEALAND PHILATELIC PROPERTIES
SELLING TO CAMPBELL PATERSON LTD

Perhaps the most difficult and often overlooked phase for any collector – the decision of the appropriate time and the most effective means of disposing of his stamps.

In my opinion, the hurdle looms larger simply because of the nature of collecting. To most serious practitioners the act and the art of collecting often has as one of its most attractive qualities, a suspension of “time awareness”, and together with all the other qualities present, this is one of its most beguiling.

There are, however, certain well-established principles involved in the disposal of any collection and to ignore them is to risk financial loss. These are the facts which must inevitably be faced by everyone who owns valuable property which represents an input of capital, judgement, and expertise.

Any decision either to collect or to sell has to be a strictly individual one based on the requirements of those concerned. Not least among these is the on-going pleasure that can be gained by continuing a collection as long as it is practical to do so. It’s been said that a true collector never sells his stamps; if he is wise he may be better to – eventually.

What follows, therefore, is an attempt to assist in planning. In Part One I attempt to deal with some of the constants which apply to most potential vendors, and in the second part I offer answers to a number of typical questions which are regularly asked by clients trying to make decisions about disposal.

Observation has convinced me that:

Any material purchase of philatelic property over a period of years inevitably comes to form a significant investment. It is realistic to review, on a regular basis, all security aspects relating to the collection – storage, protection against deterioration, insurance, security from theft, and so forth. An ounce of planning for all eventualities can save serious loss and trauma, particularly where family and beneficiaries may be involved at a future time.
At some time in the future, all collectors should come to terms with a decision to provide for the disposal of their stamps.
The best possible person to dispose of a collection is a collector himself/herself.
It is unwise to leave disposal of valuable specialised property entirely to Executors, Solicitors, and Trustees.
It is unreasonable to expect non-expert beneficiaries in an Estate, be they widows or family, to face the major hurdle of sorting out a collection and supervising its disposal.
It is better to apply a policy of phased disposal of the collection, allowing time to achieve a sale(s). In my experience, the more valuable the collection and the more specialised, the greater the time that should be allowed for the disposal.
One successful policy allows for a gradual rationalisation of a collection into areas of particular interest, allowing the controlled disposal of other important material. This is a practical way to approach effective disposal.
The maximisation of the return on a collection, and the returning to the owner of the true market value of that collection, is the primary objective.
A collector disposing of a collection is better to maintain an attitude of firm realism about the value of his stamps rather than allowing unreasonable expectations to cloud his judgement.
A well-informed collector, or one who has taken the trouble to remain in touch with collecting and market trends, handles a disposal most effectively.
The establishment of trust and confidence in dealers or advisers will be an essential ingredient of a successful disposal. An overly anxious approach or one which is clouded by fear of loss, will, in all likelihood, result in a less-effective disposal.
As a form of “insurance” it is better to have agreed with beneficiaries or colleagues a suitable means of disposal earlier rather than later. The general plan of disposal should be reviewed every few years, having particular regard for the direction the collection has taken and the level of investment involved.
Comprehensive records of purchases, sources, guarantees and specialised items – perhaps computerised – should be kept and should assume that the eventual reader is not expert. There are several computer programmes that are designed for this.

SELLING TO CP LTD.

From its inception in 1949, the firm has provided top service for specialised collectors of NZ stamps.One aspect of this service relates to disposal and the provision of advice to clients interested in NZ stamps at all levels. Comprehensive knowledge and long-term experience of the world market for different categories of NZ philatelic material and Postal History is a major factor in our ability to offer this service. The following are a number of pointers and specific advice given in typical situations which we have encountered over the years. They are presented in question and answer form.

What is the best way to find out what my stamps are worth?
If the valuation is required for personal interest and the collection is simplified (one of each issue) then a summary of the Catalogue values – a small simplified catalogue will do – divided by two, will give a rough approximation (but leave out stamps listed at very low values – they do not have a resale value). Inferior copies, hinged stamps, and heavily postmarked, must be excluded. In the case of a specialised collection, such a valuation is best carried out by a specialist valuer with an active current knowledge of market conditions, trends, values, and the specialised aspects of the issue(s) concerned. In my experience, “armchair valuers” should be approached with caution. In the end, if the material is to be sold, the only valuation of any consequence is the one backed by a cash offer. Some vendors tend not to sell to dealers from whom they have bought material. In my experience, this is a mistake. Provided trust exists between collector and dealer, your regular supplier will be happy to repurchase quality material which he himself sold you, at fully adjusted current market rates. A little thought will show that this is a good sign, not a bad one.

How can I ascertain whether my collection contains rare varieties which have not been correctly classified?
Find an expert who really knows the issue and who can be relied upon to give you fair and honest advice. Specialist Philatelic Societies are a good source of such people. A specialist dealer whom you trust will have the added advantage of commenting on market values and saleability. Varieties are not necessarily particularly sought-after or saleable by virtue of rarity alone. Nevertheless, an expert overview of your collection may reveal unrecognised shades and varieties and will always be worthwhile.

What proportion of the Catalogue price to Campbell Paterson Ltd pay?
It is useful to remember that a catalogue price is a guide to market price only. For instance, we have been known to pay more than our own Catalogue price for items which have proved to be particularly scarce or rare. Alternatively, the Catalogue puts a price on many items that covers the purchasing, stocking, advertising, and handling costs only – effectively those very common items do not individually have a resale value. Perhaps more than 99% numerically of all the individual stamps ever issued will never be scarce.
In carrying out an assessment for purchase, we ascertain the current market value, taking into account trends in scarcity and demand. After adjustment for dealer’s margin, this then provides us with a buying price. The point should be made that the market price for scarce property in the hands of a specialist dealer in that property is greater than its value in (say) a general auction. This is a result of a dealer’s access to a specialised world-wide market. As a vendor you are entitled the benefit of this access.

When is the best time to sell?
Very much an individual decision, influenced more by personal considerations, in my experience, than by the market which is relatively stable world-wide for scarce property and not subject to short-term change. Personal, financial, health, and time-availability considerations will weigh more heavily here and as such may be predictable.

Which is preferable, outright sale or auction?
In my opinion, auction is suitable for properties at either end of the specialised-simplified scale. For instance, very huge “million dollar” properties may well be suited to direct commission sale by a dealer, or if that is not possible breaking up through a major auction house. On the other hand, relatively undistinguished properties may sell well through local mail-order auction catalogues or Club auctions. However, where there is a high degree of specialisation and quality present, it is most advisable to seek a specialist dealer’s precise valuation and recommendation. High realisations at auction tend to attract headlines, but a large mass of material is sold through auction at unspectacular prices. This is a result of the fact that buyers may possibly be bidding for your stamps through auction, not because they wish to pay more but because they wish to pay less. An accurate specialist valuation and placement of quality material with clients who have a genuine specific need for it, will in all likelihood produce a better result, whether the dealer makes an outright offer or sells on commission.
Remember that prices realised at auction are subject to auctioneer’s commission and expenses, and (often) the addition of a 10% buyer’s commission and value added taxes. These can rise to as much in total as a third of the realised value at auction.

Are there other ways of selling material other than auction or outright sale?
As mentioned above, sale “on behalf”, at a reasonable rate of commission, is a suitable method of disposal, particularly where the material is not great in volume but where there is real rarity, quality and value present. A specialist dealer is used to discussing this type of decision with his client and you should seek his advice.

How would I go about getting Campbell Paterson Ltd to do a specialised valuation of my collection?
In New Zealand a direct contact to us with brief details of the collection, period of issues covered, general condition, degree of specialisation and an indication of whether money has been spent on the collection will receive an immediate response, and if appropriate a personal visit to value.
In Australia/USA a visit can be arranged for major properties as we travel overseas to buy on a semi-regular basis. Again, as much information as possible should be supplied with photocopies of valuable material (such as classics) where this is appropriate.
In the UK a similar approach should be taken. A visit and specialist evaluation can be arranged, at relatively short notice, by our representative in the UK, Derek Redshaw. An approach from any UK client requesting valuation or advice will receive immediate response and an early chance to have the material valued.
Our New Zealand buyer will also visit the UK from time to time.

Is it safe to send a collection through the mail?
In nearly fifty years of specialist dealing world-wide in New Zealand stamps through the mail, the number of times significant material has gone missing could be counted on the fingers of one hand. Campbell Paterson Ltd use unregistered sendings to clients all over the world, or for more valuable properties courier or registered sendings. All material is fully insured with our marine insurance company and there is no risk of financial loss. Clients wishing to send valuable property to us should be aware that provided an inventory and approximate valuation is sent separately in advance, with the date of posting by registered mail, we are able to arrange insurance cover for clients which will eliminate the risk of financial loss. While on our premises, material is fully insured. A quick way to obtain a valuation, therefore, is to use the mail with the full range of safeguards listed above. Material needs to be sealed in plastic, and with firm stiffening. It is our experience that it is safe to send a collection through the mail.

What is the best way to go about getting my collection insured?
For lower valued general property you should enter a discussion with your regular insurers (household policy, motor vehicle, etc). My experience is that most insurers look favourably on a full photocopy record with catalogue values appended (taking a reasonable proportion of the total as the insured value). For more valuable properties you may need a specialist valuation and again this should be discussed fully with the insurer as the valuation may be expensive and involve a personal visit, travelling expenses and expert valuation time.
Note: We do not recommend photocopying valuable property due to the fading effect of strong light on shades.
Above all, you should negotiate and insist on precise instructions from your insurer as to what is required to gain adequate cover for valuables.

How long should I allow for the disposal of my collection? I don’t want to mess about once I’ve made a decision.
A prescription for disaster. Urgency, or the feeling that “I just want to get it over and done with” means that decisions will be taken in haste and for the wrong reasons. Obtain more than one valuation, satisfy yourself that the information you’re being given is accurate and reliable.
Once the decision is made, be prepared to accept a reliable dealer’s cash offer. For more specialised properties, and particularly in the case of a commission sale, disposal of a major collection may take time. Unnecessary haste is usually taken at the expense of good judgement.

How can I ascertain market conditions for NZ stamps throughout the world?
Subscribe to magazines and particularly specialist periodicals like CP NEWSLETTER and the CP SPECIALISED CATALOGUE. Watch price trends, review auction catalogues and realisations, join a major specialist society (for instance, the Royal Philatelic Society of New Zealand) and be prepared to listen and learn. In many cases, experience shows that your own personal judgement – if well informed – is your best advice.

I do not wish to sell my stamps; what is the best way to leave advice for executors/trustees or beneficiaries?
Meticulous record-keeping and careful descriptions of “better” material, as well as precise instructions, will give confidence to those who have to make decisions on disposal later. Remember that institutional trustees and executors tend to make excessively cautious and safe decisions. These may not, in the long-term, be in the interests of your estate. The world philatelic market is made up of personal networks and knowledge. Selling outside that market may not gain the best result.

None of my family is interested in my stamps. In view of advancing age, should I seek advice now?
Yes.

Is it wise to sell major items from a more broadly-based collection?
Again specific advice is required in each individual case. Where the major items add status and value to the collection as a whole which would be at least partially destroyed by removing them, the collection should be sold en bloc.
However, this does not apply in every case. There is a perception that to remove the gems from a collection is to leave the collector with relatively hard-to-sell “valueless” material on his hands. My experience suggests that many valuers buy collections specifically for the major items they contain. The fact that they buy the collection in one piece does not mean that they allow a great deal for common material. It has to be said that you cannot do better than to gain the absolute maximum market price for specific and major items. There are certainly cases where to sell individual items for top prices is a good policy.

CAMPBELL PATERSON LIMITED was founded in 1949 by Campbell Paterson, whose name by then was already a byword amongst specialists, philatelists, and collectors of fine stamps throughout the world – especially those of NEW ZEALAND, whose stamps are among the most popular in the world.

Over the past over-fifty years through its branches in Auckland (New Zealand), and previously in Surrey, the Company has provided for the needs and interests of many tens of thousands of collectors who have found interest, relaxation and real enjoyment in New Zealand philately.

Campbell Paterson’s greatest contribution to philately generally was the invention and production of the leading loose-leaf cataloguing system for New Zealand stamps which is updated every year and which provides a huge volume of readily accessible information and prices to hold the interest of the keenest specialist collector.

Now headed by WARWICK PATERSON, the business continues under a second generation to serve the needs of its clientele throughout the world from its headquarters in Auckland. Its monthly “CP NEWSLETTER” is read throughout the world and often contains information on early or modern New Zealand issues, which is original and inaccessible to other than its subscribers.

ADVICE FOR COLLECTORS sets forth a distillation of two generations of experience in dealing in New Zealand stamps by one of the world’s leading companies in this field.

Those who will need to dispose of New Zealand collections, from the collector to family members and Executors, will find this booklet an invaluable long-term resource whenever the need should arise.