03 honegger philatelie Wissenswertes

Thoughts about the Market Situation 2023

Once again I feel like a commentator at an ice hockey game who is supposed to forecast how the match will end after the second period! That is exactly how I feel when I have to comment on our company's performance this year. The year to date has been about as good as the last two years. In banking jargon, this could probably be described as "very satisfactory". I prefer the more honest and clear statement that we are very content with the course of business. Turnover and profit remained more or less in the range of said two (very good) years. Add to that the fact that there are still six weeks left until the end of the year and it looks as if there could still be some major transactions happen. This result does not quite meet my own expectations. I did expect and predict last year that we would emerge from the pandemic with a positive result. But at that time hardly anyone assumed that a European dictator would seek salvation in a ferocious war. After February 24, 2022, most people would have expected an economic collapse with the usual financial consequences and negative long-term effects. That it has turned out far less badly is due to a number of reasons. Let me mention a few of them.

At the end of February, we contributed to the London World Expo with our own booth. The well attended exhibition offered the opportunity for some new acquaintances and reunions with long-standing clients. The month of May marked the hour of Swiss philately. Lugano is always worth a visit and this year’s national stamp show will remain a pleasant memory. We had been personally active in the USA beforehand and the and the extremely pleasing result was a larger delegation from the American "Switzerland Association". In light of the war in Ukraine, it was by no means a given that such overseas trips were already dared again. We were very satisfied with the course of business and proved that in Ticino one can not only enjoy the beautiful surroundings and go hiking (we did that too!), but that you can also work and do business there as a non-resident.

The summer months, which are usually quieter, were followed in mid-November by the exhibitions in London, in Ulm and in Basel. A fair number of visitors found their way to these shows, and it was even possible to meet you clients interested in Swiss Classics. By now, we were looking forward to the traditional end of the year with the Monaco fair.

Let me now mention a few more points about my assessment of the foreseeable future for our business. Whereby "foreseeable future" sounds a bit bold! After all, we have learned in this soon-to-be past year that that what is right today may no longer be right "tomorrow". Time has moved fast and not everyone likes to keep up with it!

  1. Without one's own effort, one has bad cards. Goethe already recognised this and formulated: "He who always strives, we can redeem.”
  2. The pandemic has "eliminated" many businesses, either because they have been given up due age or because quite simply no successors could be found. Of course, this has automatically led to a reduction in competitors. You can see this not only in the retail shops, but also in the much smaller number of auction companies today. For imaginative, active dealers, these are definitely plus points.
  3. The Lord God has placed us Swiss in a privileged category! We currently have an unemployment rate of 1.9% and the inflation rate has fallen from 3.5% in August 2022 to 3.3% in September 2022. In contrast, the Euro was inflated by 10% (in certain EU countries even much higher!). The reason lies in the extreme rise in energy prices (oil, gas). For us Swiss this brings great relief, especially in terms of imports.  For our national bank this may look a little different (the Franc will probably continue to be sought after as a refuge currency).
  4. This year we have seen that air and sea travel have been well booked again, after these sectors had suffered huge losses in the two years of the pandemic. There are well-off people in almost all countries that are economically important for us. They could afford something again with such holiday trips. We have already seen in the last two years that wealthy people have looked around for alternative investments. Not only in the fine art and jewelry markets, but also in classic stamps. Once again, we Swiss are privileged here in that we have a cult following for our Old Switzerland stamps, which are indeed tradable all over the world! This stands in contrast to the older issues of many other countries. Here we have been able to find new buyers who, for the time being, can be called investors. But experience teaches me that out of some of these new, so far hardly known and interested collectors, may well become the philatelists of the future. The future of classic Swiss philately may lie in their hands!
  5. Depending on the economic circumstances, states will develop differently. If, in countries of the present, there was a pure fear of the future in larger parts of the population, whether they will be able to afford the higher energy prices and the inevitably increasing health insurance premiums and rents. It is perfectly understandable that "unnecessary" expenses such as expensive holidays trips or expenses for a hobby are dialed back at least temporarily. People are spending with great care and turning each Euro over twice before spending it (unnecessarily). But… those circles that deal with alternative investments are much less affected by the understandable fears of the common people. For the salaries (and gratuities) of these people contain cushions that make such dents seem easily negligible. In fact, it is often the realisation that you can buy much cheaper in a difficult situation than in a boom phase. Clever investors know how to take advantage of this. I also personally assume that we in Switzerland will not be affected by the planned restrictions. With the already publicised calls to save money and the more rapid expansion of renewable energy sources alone, we will probably be able to make ends meet.
  6. Only buy things that you can afford and that give you pleasure! For you personally, not necessarily others! A hobby should first and foremost be a source of pleasure and may cost something! Why does a hobby have to be financially profitable? Every time, you can acquire a long sought-after or dreamed-of stamp or hold it in your hand. Or when you see it again while leafing through the album, you should feel a real joy! The return on a stamp purchase should therefore lie in the collector's pleasure. Or, as far as I am concerned, in justified collector's pride. Of course, you can also invest your in shares and stocks. However, only a few people have ever physically held these in their hands. And can you feel a joy comparable to that of stamps when new shares are simply added to the old holdings and managed by third parties?
  7. We deal exclusively in the old, so-called classic Swiss stamps from 1843 to about 1870, plus the pre-philatelic covers (when there were no stamps existed). These issues form an alternative capital investment; possibly one of the best, at any rate one of the most beautiful and interesting worldwide stamp areas ever. If someone chooses these old Swiss stamps as an investment object, he automatically invests in one of the hardest currencies in the world. Even the world's most important currency, the US Dollar, experiences great fluctuations. For example: on 3.11.2022 the exchange rate of the Dollar to the Swiss Franc was just under 1:1. On 11.11.2022, however the dollar was only worth around 94 Centimes! A loss of a good 5% in one week! This as an example of the strength of the CHF. When a foreigner (with a usually weaker currency) invests in classic Swiss stamps, whose market, as I said, is in the strong Swiss Franc, this investor can certainly profit from a sale later on, because he gets back much more of his own currency, because the exchange rate is much lower than at the time of purchase. Of course, this trend can also develop reversely, but that is not likely to happen in the foreseeable future.

I would like to express my heartfelt thanks to all those who have remained loyal to us this year. Not only to the buyers, but also to the numerous collectors (and dealers) who have sold their collections to us and who are gradually finding their way back into the market as a whole collection or as individual pieces. My son has never been able to acquire so many objects as this year. This we do not take this trust for granted. You can't buy it and you have to earn it. I would also like to thank my entire family and parts of our family, who help out in one way or another, especially with the catalogue dispatch.
And first and foremost to my son Markus. In him I have a generous and, above all, knowledgeable boss, who now understands much more about Swiss philately than I do. This is why I have handed over most of our shares to him. In this sense, you can see that in my longstanding efforts to make myself superfluous in my business, I have been right.

Schmerikon, 17 November 2022

Gottfried Honegger

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