Phase Three: ProfitSo what's stopping stamp peddlers from buying up forever stamps at $0.46 before the price hike on Jan. 26, 2014, and selling them afterwards at a profit for less than $0.49?
We hashed out a hypothetical plan to see whether forever-stamp arbitrage is worth it. [...]
The good news is that you can buy up to 1 million stamps in a single order from the USPS, and pay a mere $1.75 in shipping. [...]
If you look at that as a profit on the $4.6 million initial outlay, it's not very much: less than 1.3%. But remember, all that outlay was leveraged. So if you look at it as a return on our investment -- $33.25 for shipping -- it's 175,541%.
Arbitrage something with falling demand? Good luck moving your inventory.
Why not securitize it? Obviously the first million stamps will be easier to sell than the last million, so parcel them up according to the risk, and on sell them to investors as tranches of stamp-backed securities.
What could possibly go wrong?
A while ago, the Royal Mail had an even more substantial price increase. Amazingly, in the run up to the increase almost everywhere was 'out of stock' of the first and second class stamps that would increase in value then, but had stock as soon as it happened.
Even collecting stamps is doomed as an investment. Someone at the local market sells some 'presentation packs' (special packs done for each new issue for the collectors market) for less than the face value of the stamps contained in them.
Tags: corporations
Seems like they should sell a futures contract to guarantee a buyer for the stamps ahead of time.