Australian collectors have always appreciated the value of our first national stamps, the 1913-1936 Kangaroo and Map series known as the Roos. In 2007, these became internationally famous when the collection of philatelist Arthur W. Gray sold for $US5,584,000 at an auction in New York. At the time that was worth more than $7 million.

Philatelic dealer Gabriele Woodbine attended the sale and describes it as "by far the most exciting I have ever attended. It was worth the trip just to see the stamps together as one collection, one last time."

The total auction result is the highest ever achieved for a "single stamp issue" collection yet it was a surprisingly compact collection, able to be laid out on a typical sofa. Arthur Gray's talent was in tracking down only the rarest Kangaroos of the finest quality.

Among the most impressive individual results was the $265,000 paid for a mint block of four ?1 Brown and Blue Kangaroo stamps. A mint ?2 Black and Rose single stamp with a JBC monogram sold for $175,000. This is the only known example in private hands.

Interest in this series of stamps has increased ever since. Woodbine - whose business, Gabriele's Philatelic Service, is at 44 Bridge Street in the city - has noticed an increase in new, younger clients asking about Kangaroo stamps. Many work in the financial sector. They've heard on the grapevine that the Roos are a great investment at the moment. They can be, the experts say, but they can also be a good means to throw away your money.

"I don't encourage people to invest in stamps as it requires a highly developed skill at telling the exceptional from the mundane," says Gary Watson from Melbourne auction house Prestige Philately.

" Thebest investors are the long-term collectors. They know their subject, they are rarely concerned about making money from their hobby and they tend to hold for extended periods.

"When they do decide to sell they are often astonished at how much their stamps are worth."

The three key factors in determining the value of stamps are quality, rarity and demand. "Of these the most important is demand," Watson says. "You might have rare and beautiful material but if nobody wants it the value will be very modest."

Following the Arthur Gray sale, Kangaroos are in high demand. Rarity is determined by several factors. Kangaroo and Map stamps come in different watermarks (first, second and third, Small Multiple and Commonwealth of Australia). They are very scarce in large multiples, perforated O.S. (Official Service) and with an overprinted "specimen".

If buying for investment, the best policy is to buy only stamps in the best possible condition. Watson says that just because a stamp sells for a large amount doesn't mean it makes a wise investment. With Kangaroos, an exceptional stamp is perfectly centred, has full perforations and original colour(s). If it is used, the cancellation should be lightly struck and neat. If it is mint, the gum should be fresh and original.

"The biggest mistake investors make is to focus on the back of the stamp," he says. "A poorly centred stamp with ragged perforations is an unloved dog, whether or not the gum is unmounted."

Watson and Woodbine alike warn of the dangers of forgeries and frauds. These include non-contemporary and faked cancellations, repairs including the replacement of large telegraph punctures, fraudulent re-perforating including the addition of the O.S. symbol using dentist's drills. There is also an epidemic of fraudulent re-gumming of stamps.

Kangaroo stamps should only be purchased through accredited dealers or auction houses where the provenance can be verified. Avoid stamps on eBay.

My collection

Growing up in Oklahoma, philatelist Pat Allison had an early introduction to Australian stamps. At the age of 10 she remembers sending away money to Seven Seas Stamps, a Dubbo dealer that advertised in American comic books - "111 stamps for 10 cents" was a typical transaction.

When she moved to Australia in 1968, she decided to collect the postal history of her new home and 10 years ago began to concentrate on the Kangaroo series. She now has close to a complete collection of Roos.

She sees her collection as an important part of her investment portfolio, along with company shares and super. At the moment, the stamps are performing better than the other two.

"I always try to buy the best examples I can afford," is her philosophy, although personal preference still plays a part. "I've never particularly liked the 'pinks'," she says.

$690

Kangaroos at the lower end of the price scale may look like bargains but are probably not. This stamp is used and the cancellation is off-centre. It's not recommended as an investment.

$1380

This one is a good buy, Gary Watson says. It is investment grade and very lightly mounted, with excellent perforations. These details greatly affect its future value.

$23,000

This block of four in mint condition sold for a considerable amount but Watson says it is not recommended as an investment. It has damaged perforations and the margin is untidy.