Promises May Be Legal But Not Ethical

Question: I keep seeing advertisements offering to sell "investment portfolios" of rare stamps that are "guaranteed to go up in value" at least 20% per year. This seems like a foolproof investment but I'm a little suspicious. Are these firms ethical?--T.M.

Answer: As ethical as any business that wants to make money by playing on the public's greed, while technically staying entirely within the law.

What does "guaranteed to go up in value" mean? Will the company repay you your original purchase price for the stamps plus 20% per year interest if the stamps don't increase in price? Or is their fine-print guarantee merely limited to refunding the purchase price at any time you request it, even years later? Or will the company still be in business five years from now or will you be able to find their new location and new business name?

You can get a personal or car loan these days for 15% interest or less. If the stamp company was so sure that they had stamps that will increase 20% per year, then everybody who works for the company would take out a personal loan for as much money as they can get at 15% interest and buy their own stamps to get the "guaranteed" 20%, resulting in a neat 5% profit for doing a little paper work.

The fact is that nobody knows what the future is going to bring, and nobody knows what stamps will be worth tomorrow, much less in five or 10 years. Another general national economic recession could be devastating to all investments. Or a booming economy might fuel inflation that will make 20% look like a poor return on your money.

Collect stamps for fun, not for profit.

Q: I have a friend who is a serious philatelist, and I want to get him a stamp present for his birthday. What do you suggest? I don't want to duplicate what he already has in his collection, but I am afraid to ask him what he needs because I want the gift to be a surprise.--A.R.

A: Unless you are well acquainted with your friend's collection, chances are you won't buy the stamps that he particularly wants; although, if he is a beginner, he probably lacks just about everything.

I recommend stamp-collector tools (stamp hinges, an extra pair of tongs or watermark fluid). A book on stamp collecting is a nice gift, providing you are sure it isn't one he already has.

If you can ask him what stamp magazines he gets, then maybe you could buy a subscription to one that he doesn't receive. Two of the best general stamp newspapers in the United States are:

Stamp Collector, P.O. Box 10, Albany, Ore. 97321 (subscription rate $16.95 per year); Linn's Stamp News, P.O. Box 29, Sidney, Ohio 45365 ($22.95 a year). Both are published weekly and will deliver copies by mail anywhere in the country.

Q: I have complete sheets of the following U.S. stamps: 8-cent George Gershwin, 10-cent Jefferson Memorial, 10-cent "Commerce & Banking," 13-cent Pueblo art and 8-cent "Love" issue. What are their approximate values?--A.L.

A: Face value. These are stamps from the last 15 years and were issued in large quantities, so they are not rare or valuable today. I would use them for postage on my mail.

Q: I have a one-pound Bermuda stamp picturing Queen Elizabeth and the "House of Assembly" in mint condition. Also, a $2 Cayman Islands stamp with Queen Elizabeth's portrait and a clear 1976-dated cancel on it. What is their value?--E.B.

A: Retail price for the Bermuda item from the year 1962 is $7 to $10. Retail for your Cayman stamp, which comes in different watermark varieties that affect its price, is $3 to $6.

Barry Krause, a member of several national stamp-collecting organizations, cannot answer mail personally but will respond to philatelic questions of general interest in the column. Do not telephone. Write to Your Stamps, You section The Times, Times Mirror Square, Los Angeles 90053.

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