Billionaire Bill Gross was in a near-fatal car crash in college...

During his senior year at Duke University, his Nash Rambler skidded out of control on an icy road and crashed into oncoming traffic. As unlikely as it seems, this accident in part led Bill Gross to become one of America's richest men.

Now he is called "The Bond King," and is the most famous bond investor ever. He also deserves to be called "The Stamp King," as in recent years he has amassed the world's greatest collection of U.S. stamps.

How did Bill Gross become the world's biggest investor, managing $700 billion in assets? What is this guy doing in the world of stamps now? And what is this huge change that is happening on June 11th? I'll try to answer those for you now...

HOW BILL BECAME A LEGENDARY INVESTOR

The story of Bill Gross, the legendary investor, begins in a hospital bed after that car crash...

To pass time during recovery, Bill started reading a gambling book called Beat the Dealer. The book intrigued him so much, Gross headed straight to Vegas as soon as he had recovered and spent upwards of 16 hours a day at the blackjack tables at the Fremont and Four Queens casinos.

Gross played meticulously. When others would get wrapped up in the emotions of the game, Gross would stick with his system, counting cards and only making big bets when the odds fell in his favor.

In essence, Gross learned the fundamentals of money management right there at the blackjack table. Within six months, Gross had parlayed his $200 into $10,000.

Gross had beaten Vegas. Now he was ready to take on Wall Street.

Unfortunately, nobody on Wall Street was ready to take on Bill. He couldn't get a job. Finally he took a job as the "coupon-clipper" of bonds at an insurance company called Pacific Mutual - not exactly the sexy stock market work he was looking for.

Just like in Vegas, Gross had an idea that no one else had really considered, and he was willing to do the hard work to make it happen. He recommended to the insurance committee at Pacific Mutual to set up a subsidiary for him (called PIMCO) to actively trade bonds. "Let me try to trade these things and see if I can do better than just holding them," he said.

The rest is history. In a very ugly market, Gross made 17.6% in 1975, followed by nearly 18% in 1976. Gross started with $15 million. Today, Gross' PIMCO is one of the biggest asset managers on the planet, responsible for over $700 billion in bond funds. His track record is unparalleled, as he's brought home double-digit compound annual gains in bonds for decades now.

BILL APPLIES HIS INVESTING LESSONS
TO THE STAMP MARKET

In the 1940s, Bill Gross's mom had a plan.

Unfortunately, it wasn't a very good one... Her plan was to pay for Bill's college education with a stamp collection. But she didn't know what she was doing, and didn't buy "the good stuff."

So unfortunately, twenty years later when Bill went to sell the stamps, he learned they were worth less than his mother had paid. Bill paid for his college with a scholarship.

The memory affected him. In a way, he wanted to prove his mother was right about stamps. He approached the idea of building a portfolio of stamps like he was building a portfolio of investments.

First he did his due diligence. He built up a huge collection of auction catalogs and price guides going back to the 1920s. Then he started to analyze stamps just like he analyzed other investments... He figured out which ones were scarce, and then figured out which ones were cheap and expensive, based on their histories that he'd accumulated.

"I don't think most of the people in the stamp-collecting world understood what I was doing," he told the Wall Street Journal earlier this month.

The Wall Street Journal said of Bill Gross: "Unlike stamp collectors of yesteryear, who bought and sold largely on instinct, Mr. Gross relies on some of the same sophisticated financial strategies he uses to make billions in the bond market..."

Gross said: "I looked at the history of the stamps and correlated the prices to the growth rate of the U.S. economy to make sure I wasn't getting my hat handed to me."

THE WATERSHED EVENT ON JUNE 11TH

Like it or not, this is becoming the new reality in the stamp market. It's not just stamps, but many other types of collectible assets as well.

In that same article, The Wall Street Journal reported: "...Auctioneers and sellers say the real change in these markets is being driven by a new breed of buyer: young, newly rich financial traders and entrepreneurs... To some of these buyers, collectibles aren't just accessories for the mantelpiece: They're tradable assets, just like stocks, bonds or derivatives."

On June 11th, in an effort to raise money for charity, Bill Gross will be auctioning off roughly $5 million worth of his stamp collection... primarily British stamps.

We see it as a "coming out party" for stamps as an asset class.

The auction is being held in New York - so in addition to the usual stamp crowd, we will likely see the largest contingent of Wall Street bankers ever seen at a stamp event.

When the Wall Street crowd gets going, it doesn't seem to be able to stop... for example, Wall Street hedge fund investors have piled hundreds of millions of dollars into fine art in recent years. And art prices have soared in that time, as you might expect. But they haven't picked up on stamps as an "asset," yet.

They will. And the starting point for this will be June 11th.

It's about time...

Looking back over the last 50+ years, stamp prices have held their own against other assets... and this has been tough.

Stocks and property have had an extraordinary run in that time. But the table below highlights the top three performers over various time periods. Based on Stanley Gibbons's GB30 Rarities Index, stamp prices increased faster than any other asset class - including stock prices and property prices - in three of the five periods in the table, and was always in the top three:

Asset class*	Stocks	Real Estate	Stamps	Gold	Commodities	Inflation
Index	FTSE All-share	HBOS avg. home price	SG GB30 Rarities	In GBP	CRB Index in GBP	RPI
1954-to-now	7.8%	8.9%	9.6%	6.3%	3.2%	5.7%
1970-to-now	9.1%	10.2%	10.7%	8.6%	4.2%	6.6%
1980-to-now	9.5%	7.6%	4.6%	0.8%	2.0%	4.1%
1990-to-now	7.3%	6.8%	6.3%	2.4%	2.4%	2.7%
2000-to-now	1.9%	10.9%	11.1%	8.9%	4.2%	2.5%

*Just includes price appreciation, doesn't include rent, dividends, or other income.

For a few decades now, Bill Gross has been the "Pied Piper of Bonds." Whatever he does in bonds, Wall Street investors follow him into it.

We'll soon find out if he is the "Pied Piper of Stamps" as well. If only a tiny fraction of Wall Street investors take note of his stamp activity, the impact on the stamp market could be absolutely huge.

Compared to most other "alternative" asset classes, the stamps market hardly has any "investor"-type folks. We simply have a solid collector base.

In our market, it would only take a small number of large investors to start driving prices to astronomical levels. We've seen it happen in other alternative assets recently (for example, a few modern paintings just sold for over US$70 million in May). And we expect it's coming to stamps soon.

Stanley Gibbons will be bidding at the Bill Gross auction to acquire high quality stock for our inventory now.

On June 11th, the world's biggest investor could change the stamp world forever. Investor-types are coming. You may want to get yourself positioned in advance, for what could be an incredible run in prices in the next few years.

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+44 (0) 1481 708 277 or
email investment@stanleygibbons.co.uk

TOLL FREE from the USA 1 866 644 6146
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Happy investing

Adrian Roose
+44 (0) 1481 708 277
aroose@stanleygibbons.co.uk
www.stanleygibbons.com/investment