Bill Gross's stamp expert Charles Shreve on 'the famous Inverted Jenny and Z-Grill swap'

Video: Bill Gross is awarded the ASCAT Grand Prix, one of the most prestigious international philatelic awards at MonacoPhil 2009, accepted by Charles Shreve

January's final week saw yet more success at New York auction house Spink Shreves, not least with its sale of the 'Black Empress' stamp. In Part One of his exclusive interview with us (published last week) Charles Shreve, President of Spink Shreves, said of the specimen...

"I've been in the business my whole life, four decades and I've never seen a stamp of that rarity or that age, a classic stamp, in that perfect a condition."

In the end, the 'Black Empress', which we described as being in "freakishly good condition" in our auction report, sold for $425,000. Yet big money sales like these are nothing new to Charles Shreve, who over 40 years has built a career and reputation as one of the best philatelists in the business.

Among Mr Shreve's most famous dealings are those for which he has worked alongside William H Gross, the billionaire 'Bond King' investor who's also among the world's great stamp collectors. These include the legendary $2.79m Inverted Jenny and Z-Grill swap, one of the most famous events in the history of philately.

The 'Black Empress', sold for $425,000
at Spink Shreves in New York

The two have become firm friends over the years. Mr Gross even once gifted Mr Shreves' young son with a $35,000 cover so that he could begin his own stamp collection. (Charles tells the story in the above video, filmed by Paul Fraser Collectibles).

As we promised in Part One last week, Part Two of our exclusive interview with Charles includes his fascinating account of the $2.79m swap. It's a must-read, offering you a proper 'insider's perspective' of high-end stamp collecting.

Below, Mr Shreve talks candidly about his working relationship with Bill Gross, including how he help Mr Gross build his renowned collection. And he also reveals the thing about the Inverted Jenny/Z-Grill swap of which he is most proud...

How did you begin working with Bill Gross back in 1993?

Eighteen years ago he called us and started bidding in our auctions, because he thought we had the most professional ad in the trade publications. It just grew from there, and just working hand-in-hand with him and building the collection has been pretty exciting.

Mr Gross described your role (in an interview with Forbes) as "like a swing coach for a professional golfer." How did you help him build his collections?

When Bill finally rejoined the hobby [after many years away from philately] he had some extra money to spend. He was really very studious about looking at pricing trends and the past great collections like [Alfred H] Caspary, what the realisations were and using his financial acumen to try to extrapolate what the stamps should be worth today.

But what he really [needed] was to not only vet these kinds of things. He wanted to buy, but to make sure that he was paying the right price. He wanted make sure that I was aggressive enough to get the really rare things that he wanted, but also not to overpay.

As he put it: "Nobody likes to be a fish." And when you have lots of money, but not a lot of time at the beginning to put into it yourself, you really do need some professional advice. Somebody you trust, to help prevent you from being taken advantage of.

[For] the most important sales, I or Tracy Shreve [Chief Financial Officer at Spink Shreves] would attend the sale in person for Bill on his behalf. I like being on an auction floor and seeing what the auction dynamics are, what your competition might be, how aggressive other bidders are...

If it was an important sale, i'd be there in person. In lieu of that, i'd often bid by telephone.

When you first began working with Bill in 1993, was it his intention from the start to build the third-known complete collection of 19th century United States stamps?

Yes. As he oftentimes tells the story, he wanted to prove his mother right. His mother put away stamps for him for years when he was in high school [so he would] be able to go to college. She was putting away modern mint sheets of the United States

They were very disappointed that, when Bill tried to sell them, he couldn't do a "Jack in the Beanstalk." [Young Gross was sent into San Francisco to sell his stamps like Jack's 'magic beans', but dealers wouldn't offer more than the price his mother had originally paid.]

He always remembered that, and he said: "Well, I love stamps. I'd like to get back into it and I'd like to prove that my mother was right - she just bought the wrong stamps."

Charles Shreve began working
with Bill Gross in 1993

It was his goal from the very beginning. Like most collectors ... they always say they want to do this, particularly in US philately: "I'd like to try to complete a US collection'." Well, everybody says that but nobody can ever do it.

But when Bill set out, one of his main goals was to have a complete US collection, which he did when he finally acquired the 1 Cent Z-Grill. His 19th century collection was complete. But he's taken it well beyond that now...

He not only collects singles, he collects largest known multiples, plate blocks, postal history, while all the while concentrating on his US [collection]. He was also putting together world class collections of non-US countries like his Great Britain, which he sold in 2007, his Scandinavia [which was sold for charity] and his Switzerland which he still has.

With many of the rarest types of stamps needed for such a collection, it's not always known where they are (ie they may change hands privately, or not be seen in public for decades). How does a collector overcome this?

It requires patience and taking advantage of the time when they do come up. You have to take advantage of those times when certain stamps come up because some of them only turn-up very generationally.

If you don't step up to the plate at that time, you might not get another chance in your lifetime, so it requires a certain tenacity to be able to do it and a financial commitment. Of course, Mr Gross is in a different financial way than most other people.

But most 'mere mortals', like myself, try to collect as many different stamps as you can using good taste within your budget. And then, after that, you just have to be realistic and know that there are some stamps that you're never going to own.

Many people have learned from Bill Gross as an investor. What did you learn from him as a stamp collector ... or what did you learn from each other?

Well, I've learned so much from him. I've been truly blessed with the relationship that we have. First of all, as human beings, both Bill and Sue Gross. Tracy and I have never met finer people that have been more generous, not only to ourselves, but to humanity in general.

I try to understand Bill when he talks about the financial worlds and its nuances... But he's such a genius when it comes to that he leaves me in the dust! When I think about it, he often credits us with teaching him more about stamps than he could ever possibly have time to know.

But what I'd really liked about Bill from the very beginning is that he wanted to try to buy the best. He revered the old sales of the past, particularly the Caspary collection, looking at that as his goal.

If these items in the Caspary sale were good enough, they must be good enough for Bill. So he would often seek out things that were [of comparable] provenance, and ex- Caspary would fit into what his collecting goals were.

How did it feel to be involved in Bill Gross's $2.79m Inverted Jenny / Z-Grill swap in 2005. Whose idea was the swap - yours, Mr Gross's or both?

As with many things with Bill it's been very exciting. The germination of that came along when Bill already owned four of the six known blocks of four of the airmail Inverted Jenny. He owned everything but the plate and the so-called Princeton block (which is the lesser-quality block).

When the announcement came that the plate block was coming up for sale, I emailed [Bill] and I said: "Did you know this was coming up? Y'know, you need another Inverted Jenny block like you need a hole in the head. But this one's different: it's the plate block and you have your separate plate block collection..."

Right in the middle of typing that email, I said "Wait a minute, i have an idea!" And it germinated between the two of us. We were sorry that we'd missed out on the 1 Cent Z-Grill, where we were under bidders to the Mystic Stamp Company.

Super-swap: the Inverted Jenny block and 1 Cent Z-Grill 

In the intervening years, Mystic had been using the Z-Grill tirelessly in their marketing [laughs] and in their promotion. And i got the idea that they weren't necessarily in love with owning the Z-Grill, they were in love with how it could be marketed and help their business.

The Inverted Jenny plate block could do just the same - it would freshen up their marketing! So I suggested it to Bill: 'Why don't we try to do that? We'd buy the plate block and engineer a trade because I think that [the Z-Grill and Inverted Jenny block's] values are going to be similar.'

We approached Don [Sundman] at Mystic several times, who turned us down. Said that he wasn't interested, that he liked the Z-Grill and so on... But we talked to him about it. He's a massive marketer, one of the best in the business.

We said: 'You've really run its course on the 1 Cent Z-Grill. To buy the Inverted Jenny plate block ... it's an even more recognisable and iconic rarity.' We said that, from a financial point of view, there'd be no tax implications involved because it would be a like-for-like trade.

The only problem would be how much we would pay. How much would the Inverted Jenny plate block cost? Would it be commensurate with the value of the 1 Cent Z-Grill? We both kind of agreed on what that would be.

Not 10 minutes before the [public auction] sale of the Inverted Jenny plate block occurred, we came to a written agreement. We knew when we bought the plate block that we were going to announce the trade a week later...

So we set it up, and all tons of journalists and television stations and everything came ... and it was kind of fun!

What it really did at the time - that i'm particularly proud of - it really brought stamp collecting to the forefront of the mainstream press, which stamps have kind of fallen off of for a long time.


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