Academic
Stamp Commodites and Futures
http://www.usps.com/communications/news/press/2006/pr06_031.htm
The USPS in its ultimate wisdom has decided that it will now go with a forever stamp. Yes instead of putting a 1 or 2 cent stamp to add to your old stamp, the stamp you buy today is worth a first class mailing forever. The USPS has also stated with inflation and energy costs their stamp fee has increase on average 1 cent a year.
Imagine the beauty of this. If you bought a forever stamp next year for 40 cents and held it for 1 year. The next year if that stamp is worth 41 cents you just made 1 cent for holding a stamp one year. Assuming you could sell that stamp for the same rate you made 2.5%. Now if it goes up 2 cents than you have made 5% on your investment. Hell that is almost as good as a treasury note.
So then what happens if you start trying to anticipate the costs of the USPS increasing such as union labor rates, energy, new trucks, loss of business from the internet, and increased competition from UPS and FEDex. Hell then you start selling options and create a new futures market.
Regardless of the investment option you could stockpile stamps for the rest of your life for xmas cards, bills, invites, etc..... And in 20 years you have a bunch leftover stamps, you could sell them on ebay. After 20 years and a 20 cent rise you're initial 40 cent stamp investment will be worth 60 cents. That is a 50% return on your investment. So if you put down $10,000 today for stamps you could make $15,000 in 20 years! Probably won't beat the S&P, but stamp price increases are as sure as inflation.
As the guys in my office would say lets name this great investment as "Stamp Arbitrage."
The USPS in its ultimate wisdom has decided that it will now go with a forever stamp. Yes instead of putting a 1 or 2 cent stamp to add to your old stamp, the stamp you buy today is worth a first class mailing forever. The USPS has also stated with inflation and energy costs their stamp fee has increase on average 1 cent a year.
Imagine the beauty of this. If you bought a forever stamp next year for 40 cents and held it for 1 year. The next year if that stamp is worth 41 cents you just made 1 cent for holding a stamp one year. Assuming you could sell that stamp for the same rate you made 2.5%. Now if it goes up 2 cents than you have made 5% on your investment. Hell that is almost as good as a treasury note.
So then what happens if you start trying to anticipate the costs of the USPS increasing such as union labor rates, energy, new trucks, loss of business from the internet, and increased competition from UPS and FEDex. Hell then you start selling options and create a new futures market.
Regardless of the investment option you could stockpile stamps for the rest of your life for xmas cards, bills, invites, etc..... And in 20 years you have a bunch leftover stamps, you could sell them on ebay. After 20 years and a 20 cent rise you're initial 40 cent stamp investment will be worth 60 cents. That is a 50% return on your investment. So if you put down $10,000 today for stamps you could make $15,000 in 20 years! Probably won't beat the S&P, but stamp price increases are as sure as inflation.
As the guys in my office would say lets name this great investment as "Stamp Arbitrage."
posted by Frank
at 9:02 AM
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