The psychology behind price movements is interesting. When something is scarce on the shelves, we all move to buy it. When it is abundant, we all wait. The gold market has been a classic example of this as has the price run up of Apple stock in the last year. Philately, too, has had its speculations, price run-ups, and periods of quiescent markets, and as with other markets, many collectors sit quietly on the sidelines in quiet periods, only to wish that they had been more actively adding to their collections after the market has moved.
There have been four major price cycles in the philatelic market since our hobby began. The first in the 1860s, corresponded with the nascence of our hobby. There were virtually no collectors before about 1860; so the early Timbremaniacs, as they were called (after the French word for stamps “Timbres”), created a demand where there had been none before. The effect was electric with thousands of men and woman combing old correspondence and desk drawers for stamps that the new collectors might need and deem valuable. The period of the 1870s and 1880s were quieter as collecting became established and the main emphasis of collectors was on creating and establishing stamp albums and catalogs and studying stamp printing records to discover what rarer varieties might exist that collectors didn’t yet know about. The literature of the period is very compelling with constant admonitions for collectors to be on the lookout for this or that rare and still under-discovered stamp.
The 1890s saw the second great price increase in stamps. For reasons for which I have never been able to completely discover, philately had a real boom in the 1890s. Worldwide economic growth was strong during the decade, sure, and philatelic price appreciation always needs good economic conditions, but this only explains part of it. Perhaps the “next generation” effect was a part as well