In 1856, if you were looking for a long-term investment, a British Guiana 1-Cent Magenta postage stamp would’ve been a pretty good buy.
The last known stamp of this kind will go up for auction at Sotheby’s Tuesday, and experts say it will likely fetch around $20 million. Not only would this make the Magenta the most expensive stamp ever sold by a factor of 10 – it would also make it the most valuable human artifact by weight in recorded history.
A growing global class of the über-rich, combined with the Magenta’s rarity and its colorful history – peppered by war, murder, and aristocratic intrigue – has led to the high price tag, say economists and stamp experts, known as philatelists.
The stamp, which features a three-masted schooner and the motto of the South American colony – Latin for “we give and expect in return” – was created when postmasters in London asked the printers of the Royal Gazette newspaper in British Guiana’s capital, Georgetown, to create a stamp in 1856 because a stamp shipment from overseas had been delayed.
The first owner, a young Scottish boy living in the colony who found the stamp among his family papers, sold it to a local collector in 1873.
Five years later, another collector in Liverpool, England, purchased the Magenta for 130 pounds, before promptly flipping it to Count Philippe la Renotiere von Ferrary at a slight markup.
When the Count died in 1917, the Postmuseum in Berlin inherited the stamp, only to see it confiscated a year later by France as part of World War I reparation payments. In 1922, while in French hands, the Magenta fetched $35,000 at auction, breaking the stamp price record for the first of two – and soon to be three – times in its history.
The buyer was an industrialist from Utica, N.Y., who outbid King George V, meaning the stamp would remain the one major philatelic omission from the Royal Family’s heirloom collection, a distinction it maintains to this day.
After a number of lawsuits and private purchases, the Magenta was eventually sold at auction again for $280,000 in 1970 breaking the price record for the second time.
By 1980, it had fallen into the hands of John Du Pont, a tycoon in the chemical industry convicted of murder in 1997, who died in prison four years ago. Now, in 2014, Mr. Du Pont’s estate has yet again put the stamp up for auction.
Interestingly, despite the rapid appreciation of rare stamps in recent years, there has been a “definitive decline in [their] organized selling,” said Ken Martin, executive director of the American Philatelic Society, to the Washington Times. So, intrigue aside, why the exorbitant price?
It comes down to the growing number of extremely wealthy people in the world, writes The Economist.
According to the Hurun Global Rich List, published in February by Barclay’s, there were 1,867 billionaires globally, an increase of 400 since last year. This elite class puts a premium on items that are truly extraordinary rather than “merely good” – from the finest wines to the rarest collectables.
What’s more, 300 of these billionaires are now Chinese, an increase of 25 percent over the previous year. That’s significant because China’s über-rich puts 17 percent of their money in "alternative investments" versus 9 percent for their counterparts in the US.
“At least a third of the world’s stamp collections are now in China,” writes The Economist, and “dealers say that auctions and shows in Hong Kong and Beijing are far more lively affairs.”
Sotheby’s, in fact, showed the Magenta in Hong Kong before the auction to pique investor interest. So, the stamp’s steep price isn’t just a reflection of its uniqueness and history – but also a symbol of the changing dynamics of the global economy.
This report includes material from the Associated Press.