The stamp market, desolate for over a decade, has suddenly become bustling. Newly founded stamp collecting shops have sprung up "like mushrooms after a spring rain." Kuling Street, next to the Postal Museum, used to be lined with second hand book shops, but it has been taken over by stamp dealers.
Seven or eight stamp vendors, who used to try to buttonhole people on the roadside, now have their own shops, making up the so-called "Stamp Plaza." Four other relatively large stamp shops have also opened up in the area. Two stamp collecting dealers which are growing larger every day they operate have, like suddenly wealthy stock brokerages, opened branches in central and south Taiwan.
As soon as the weekend comes, the once deserted and quaint Kuling Street comes to life because of the drawing power of stamps. Business is great at all the stamp shops, and turnover is way up. According to the estimates of a Mr.Yeh, chairman of a certain relatively large stamp trading center, business at his store this year will be more than double last year's.
It's a stampede: Not only is business booming at the stamp dealers, even the income of the Directorate-General of Posts in the Ministry of Transportation and Communication has increased greatly. According to DGP statistics, before 1990, income from stamp collecting (including the stamp collectors' window and long-term subscribers) was about NT$200 million annually. In 1991 it began to grow rapidly, to more than NT$550 million. For 1992, by the end of May, income had already exploded to more than NT$2 billion.
The increase in stamp collecting income makes one wonder whether or not this is connected to the increase in stamp prices in July 1991. Chien Tehyin, assistant director of the Office of Stamp Collecting at the DGP, points out that although the face values of many stamps went up, overall there was no large-scale adjustment, and so there wouldn't be that much of an effect on stamp collecting revenue. The main reason why income has gone up so dramatically is that the number of people buying and selling has increased, and there has been a large upgrading in the units by which stamps are being sold.
According to DGP statistics, long-term subscribers at the post office reached 200,000 only by the end of 1990. By March of this year the number had exploded to 320,000. The figure had increased 60% in just over a year.
In the past, the number of sets issued for each group of stamps was between 1.5 to 2 million, and they couldn't be sold out even after many months. Today the number of sets issued is five or six times greater, and they sell out in a day, with supply still not meeting demand. Taking for instance the "children's toys" stamps, the first group went on the market last April; three million sets were issued, as were 1.4 million complete sheets. This still couldn't meet market demand, and the second printing of children's toys stamps this April was specially increased to ten million sets with 6.5 million complete sheets. They caused a sensation even before being released, with people beginning to line up the afternoon before they went on sale, and they were sold out by the afternoon of the first day.
Stamp "intelligence": Why the sudden increase in demand for stamps? It's certainly not that everyone suddenly became enamored of writing letters, and not that suddenly a huge number of stamp lovers appeared, but that, besides "stamp collectors," our society has had a sudden increase in "stamp accumulators."
Wang Chung-jih, the business general manager of a stamp shop, states that the purpose of the "accumulator" is not to collect stamps per se, but to invest. The face value of a stamp is but a few NT dollars, and even if it goes up several ten-fold, the price will still not be more than a few hundred. If you want to reap hefty profits, you have to vastly increase the number of "chips" you hold.
The media, which is quick to smell a story, has greatly increased the number of reports about stamp collecting in recent months. One evening paper even initiated a "stamp investment" page beginning in March of this year. The whole page is devoted to reports about the goings-on in the stamp market, carrying a buying and selling table of stamps each week. There are stories like, "Mr.Chu is anxious to sell five packs of complete sheets of peacock stamps, and anyone interested should offer NT$23,000 per package...."
The editor of that page, Hu Chao-chun, reveals that you can get an idea of the intensity of stamp investment fever from these facts: Every day stamp dealers try to curry favor by taking him to dinner, he receives tens of letters from readers every day, if there is the slightest error there are a huge number of calls and faxes correcting it, and newspaper sales have gone up significantly.
Who are the "stamp accumulators"? Who are these "stamp accumulators"? A stamp dealer named Chen points out that people of all classes and professions buy stamps by the package. Among the clients with whom he has had contact, there are even many military officers and housewives.
What's surprising is that students are also among the "investors." Hsu Chiu-chi, who once sold stamps on the roadside on Kuling Street, notes that many high school students go there to buy stamps, and talk prices by the package (each package includes 200 sheets, with a small complete sheet being one whole set and a large complete sheet made up of a number of these sets). Clearly they are not simply collecting stamps. And a certain "National Taiwan Normal University Hsu," known to all the insiders, is a "major player," having invested more than NT$1 million as of the present.
This student Hsu, just a freshman, says that he has had a concept of "money management" ever since he was a child. "I started collecting stamps in third grade, and I discovered that stamps increased in value every year, which gave me a great sense of achievement," he says. In March of this year he saw in the papers that the stamp market was heating up, and his stock player brother told him that many punters were going into stamps, so his confidence increased, and he borrowed more than NT$1 million from family members to "invest in a big way."
This Hsu "hasn't had to take any money for living expenses from my family since doing stamps." Now, besides schoolwork, his most important activity is to go to the convenience store at 4︰00 PM to buy the evening paper and check the day's information from the stamp market. From time to time he also goes to stamp shops to ask about the latest news.
Is speculating on stamps the same as on stocks? As for old investors switching over from stocks to stamps, the biggest impact is made by stock clubs which force up prices by speculation and rumors. They use exactly the same methods as in "cooking up" stock prices--nurturing, swapping and killing--to play stamps. Thus the more the price is nurtured, the higher it goes.
Tsai Chang-chu, who describes himself as a "stock market loser," reveals that by the end of November of last year he had lost all of his property and assets, including his house in the pricey Chunghsiao East Road area. "Fortunately stamp prices have been going up lately, so I've brought out my stamps that I've collected over more than thirty years to sell, so I can get by," he admits. He has already switched over from the stock market to the stamp market.
Buy low, sell high--that's the only way to make profits. In May, on the day that the children's toys stamps were put on sale, Tsai bought all morning in front of the Postal Service Museum, and sold all afternoon. "Recently the issues have been huge, so the risk is great; if you can make money, then unload the stuff. You could say there's little risk to the early stamps which were issued in smaller numbers, and investment in them over the long haul will definitely yield profits." This is the conclusion Tsai has reached after many years of stamp collecting experience and painful lessons from the stock market.
With changing methods of investors, the operating methods of stamp shops have also changed in their wake.
Conversation in the stamp dealerships is often peppered with stock lingo like "bullish," and "bearish." Yeh Wu-yin says that, "these expressions are already familiar to everyone, so we don't need to waste words, and we can easily bring the customer up-to-date."
Stamp situation: They not only use the jargon of the stock market, they have even brought the "big board" of current prices to the stamp market, posting up the buying and selling price for various stamps, adjusting it once a week. The person in charge of the company which was the leader in posting prices last June relates that, "the only way to get more people to invest was to establish public pricing and marketization."
However, though the "big board" has already become a reference indicator for the stamp market, stamp trading is not as open as stock buying, and has no publicly fixed prices as in the gold market. Only one or two companies fix their buying and selling prices according to "market supply and demand." But other shops privately express suspicions that there is manipulation, or doubts about whether the prices really reflect market conditions.
Taking a small complete sheet of the newly issued toys stamps, with a face value of NT$20, for example, in less than one short month, the stamp market price reached NT$250 per set, a more than 12-fold increase. If you ask dealers how the price could go up so rapidly, they just shake their heads "who knows?" and can't give you a reason. In the end they can only rationalize this saying "demand is larger than supply, so the price naturally goes up" to explain this unreasonable phenomenon. What's intriguing is that during the mid-June auctions, the stamps were set at a minimum of NT$200 but none of the bids met this price.
Stamp fever across the Taiwan Strait: The fever for investing in stamps, brought about by the switch from the depressed stock and property markets, also has its "foreign investment," creating a mutually reinforcing effect.
These foreign investors are not outsiders, but Chinese from the other side of the Taiwan Strait. Mainland China's stamp fever got rolling about the same time as Taiwan's, and is at least as intense if not more so than Taiwan's. According to official Chinese Communist statistics, there are seven to eight million stamp collectors in mainland China (one must have a permit to buy and sell stamp collector's items, so that the registered number is probably not too far from the number of actual dealers). Chien Teh-yin goes a step further, noting that although the economic power of the mainlanders is low, with the rise of "individual enterprises," some idle capital has accumulated. Since property cannot be privately bought and sold, there are few items in the stock market--and you can't get those anyway--and bank interest rates can't keep up with inflation, many people hope to hold value by turning their cash into stamps.
Ever since visits to the mainland were allowed, some people have taken Taiwan stamps over as gifts for friends and relatives, and these have been very popular. Gradually, people on the mainland began asking friends and relatives in Taiwan to buy stamps for them and send them over. More sensitive people recognized that the mainland could be a huge market--on the day Taiwan and the mainland are reunified, the stamps issued in small numbers in Taiwan now and in the past could become real "collector's items" of great value.
With everyone optimistic about the mainland market, Taiwan investors setout to seize it, and the supply of stamps could not keep up with demand, and prices rose. After older stamps have been first "cooked up," newer stamps are also being bid upward.
Can you eat a piece of paper? Of course many dealers remain sceptical of the buying power of mainland Chinese stamp collectors. The face value of Taiwan stamps makes them rather expensive in the mainland. A set of four NT$20 toys stamps, for instance, would be four or five RMB. If traded at the current "market price" of NT$250, that would be an incredible amount of more than RMB50 per set, which the ordinary mainlander could not afford.
But Mr.Chen, who went to the mainland to explore the market in July, has a different view. "There are people in mainland China offering RMB500,000 to buy stamps," he contends, saying that the economic capability of the Chinese coastal region has been underestimated.
Putting aside for the moment the question of developing a mainland market for Taiwan stamps, the price of stamps in Taiwan has gone up significantly under the impetus of this on-paper demand. Many followers don't even know why the price of stamps is going up, or what the difference is between the stamp and stock markets, and just jump into this money game feet first.
According to observation of the stamp dealers on Kuling Street, some people just are in for the short haul, carrying a briefcase up and down Kuling Street; the briefcase either is full of stamps or cash. There are even people who turn over huge sums of cash to dealers to "reserve" stamps that haven't even been issued yet.
Stamping out stocks? In the face of this developing "money game," many dealers are anxious to strike while the iron is hot, and are talking big: "Stamps are superior to stocks, because the number of stocks will increase as the price rises, but the number of stamps will decline as they are used," or "there is less risk in stamps than in stocks, because each stamp has a legally guaranteed value," or even "stamps are art objects, and will become increasingly valuable with the rise in national wealth."
But some dealers are worried, and wonder where the logic is in saying that stamps that are issued in ever-increasing numbers can only rise in value and not fall. Maybe people will try to corner the market and place hope on the mainland market, but will there really be so few investment channels in the mainland when the day of reunification arrives that people will have to invest in stamps? And what's more, stamps are not essential to daily life, and sooner or later you'll have to get all those accumulated stamps off your hands, and at that time supply and demand will change places, so the price will "go straight down."
In order to lower the risk, most dealers have recently adopted a policy of "only selling, not buying." If they run short of goods, they'd rather borrow some from others in the same line than to buy them on the open market. In this way, although the number of chips they hold is down, the chance they will be left holding the bag is reduced. Thus, although there is still no sign of the "collapse" of the stamp market, in fact buying and selling channels are less than smooth. People who want to buy may find it hard to do so, and people who want to sell may not find any takers, so that there has been a corresponding rise of "intermediary" or "auction" selling methods.
Some gotta win, some gotta lose: At present there are at least three dealers who hold regular auctions. One businessman points out that holding an auction not only opens sales channels, it has a certain predictive nature. One can understand market direction through auctions, and figure out the true demand.
In the middle of June, Mr. Chen boldly did a market trial by holding a huge stamp auction. The auction was of unprecedented scale, with more than 100 types of items, with the minimum price totaling NT$19 million. The outcome was that valuable early stamps sold out at high prices, but none of the bids for the recent so-called "hot-ticket items" like children's toys stamps, peacock stamps and Chinese 12-year cycle animal stamps made the minimum price.
There is no telling whether this will serve as a warning to some "investors." But it doesn't matter if there is "fever" on the stamp market, or whether there is "chaos"; for purist stamp collectors, these create no significant losses except for some slight disturbances. By being a long-term subscriber at the post office, a collector can always get their new stamps when they come out, and needn't line up at the post office window or worry about the latest situation in the stamp market. For stamp "accumulators," some gotta win and some gotta lose. The lucky ones will be able to unload their stamps at a profit. The less fortunate, being the last to take possession, will have to be happy counting their stamps.
[Picture Caption]
From tranquility to investment fever, auctions have now become a major way of buying and selling stamps.
Cartoon by "The Vulture" (from the Minsheng Daily News).
This envelope commemorates the sending of rice from the R.O.C. to Russia. The marks trace the path of the rice from Taichung harbor to Vladivostok and back to Taipei. (photo courtesy of Tsung Hsiao-an)
Ten million sets of children's toys stamps were issued in the second printing, and all were sold out in the first day. (photo courtesy of Hsieh Tsu-chin)
Business booms on weekends and holidays at the Kuling Street stamp plaza.
The design of the peacock stamps is exquisite and the materials well-organized, making them popular among philatelists. (photo courtesy of Hsieh Tsu-chin)
The "red stamp marked one yuan," issued in the 22nd year of the Kuang Hsu reign (1892) because of a currency reform and known as "the king of Chinese stamps," is the most valuable Chinese stamp in history. Its market value is estimated to be from NT$6-8 million. (photo courtesy of Chang Min-sheng)
Most of the people at the stalls in front of the postal museum are part-time punters.
The stamp market has succeeded the stock market with one "stamp market investment seminar" after another.
On weekends and holidays the space in front of the postal museum becomes a stamp market, bringing together adults, children, stamp lovers and stamp investors.
It's common to see people buying by the package and paying in cash at the sstamp market these days.
To cope with trends in the stamp market, the Ta Ming Pao, which specifically reports stamp market news, was founded in December 1989.
Cartoon by "The Vulture" （from the Minsheng Daily News）.
This envelope commemorates the sending of rice from the R.O.C. to Russia. The marks trace the path of the rice from Taichung harbor to Vladivostok and back to Taipei. （photo courtesy of Tsung Hsiao-an）
Ten million sets of children's toys stamps were issued in the second printing, and all were sold out in the first day. （photo courtesy of Hsieh Tsu-chin）
Business booms on weekends and holidays at the Kuling Street stamp plaza.
The design of the peacock stamps is exquisite and the materials well-organized, making them popular among philatelists. （photo courtesy of Hsieh Tsu-chin）
The "red stamp marked one yuan," issued in the 22nd year of the Kuang Hsu reign （1892） because of a currency reform and known as "the king of Chinese stamps," is the most valuable Chinese stamp in history. Its market value is estimated to be from NT$6-8 million. （photo courtesy of Chang Min-sheng）
Most of the people at the stalls in front of the postal museum are part-time punters.
The stamp market has succeeded the stock market with one "stamp market investment seminar" after another.
On weekends and holidays the space in front of the postal museum becomes a stamp market, bringing together adults, children, stamp lovers and stamp investors.
It's common to see people buying by the package and paying in cash at the sstamp market these days.
To cope with trends in the stamp market, the Ta Ming Pao, which specifically reports stamp market news, was founded in December 1989.
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