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moneysense.ca, 4/08/09
Investing in Stamps, Coins, Comic Books, Baseball Cards and more…
Postcards best left to collectors
“If you know what you’re doing, investing in postcards is probably not a bad idea,” says Michael Rice, owner of Fenian Antiques, a Saanichton, B.C.-based collectibles dealer who has 15,000 postcards in his collection.
“If you don’t know what you’re doing, I’d be hesitant.”
Movie posters yield blockbuster returns
“I got out of investment banking a couple of years ago and started investing in posters,” he says. “The prices keep going up for the really rare things, and I’d rather put my money in something tangible than in stocks.”
$16,000 a bottle / an acquired taste, a smooth return
Investing in whisky has grown in popularity in recent years. The whisky market “is going well,” said Michel Kappen, who launched the World Whisky Index, or WWI, two years ago in the Netherlands. “We are creating an exchange where people can see the market value of rare whiskies that you can’t buy any more in the shops or that are difficult to find,” he said.
The WWI has nearly 5,000 bottles listed and prices for some have jumped more than 30 per cent year over year. The most expensive bottle currently on the exchange is a 50-year old Springbank whisky distilled in 1919. It was recently listed at $83,000 (Canadian).
Are there any beer collectors (oops, I meant investors) out there?
moneysense.ca, 4/08/09
The problem with “alternate investments” is that you almost never see book value if you decide to cash in and the value of many things is more theoretical than actual.
Sure, you have your rare instances of Honus Wagner baseball cards or Action Comics #1 but just try and get book value for something relatively modern.
Hmmm…I think we should start a “Canadian blog ETF” where investors can get a piece of some hot blogs….
I saw an article recently on movie posters…I just rolled my eyes.
I’d love to collect beer. Although the stuff in my fridge depreciates rapidly once I empty the contents. I never seem to get more than 10 cents a bottle…
Most of the articles regarding collectibles as investments seem to concern themselves only with the most rare and expensive examples. The first issue of Captain America may be steadily increasing in value, but the other 500 issues are probably worthless. Especially now, with the appearance of EBay, where virtually any common comic book can be found: Starting bid, ¢99; Buy it now price, $2.
The key to collectibles, as you say, is really that it is a hobby. It is something personal, that you have a passion for and definitely know a lot about! I have a number of friends (mostly of the female persuasion) who are into antiques – but they all know and love what they’re doing. To an untrained eye (ie. mine), they look like 100 yr old junk.
That said, a good friend of mine has a collection of about 14 or 15 special limited edition or celebrity autographed guitars in his basement. It is like going to a museum whenever I get to go visit his basement. That being said, it is next to impossible to put a price on his collection – you can’t mark to market his collection on every given trading day. What is a Jimmy Buffett or James Taylor autographed guitar worth? Heck if I know, but it would probably be worth a lot more after they pass away… What is the value of a rare limited edition 1960-something Gibson Les Paul hollow-body guitar? Heck if I know, but I’m told there were fewer than 100 of them originally hand-built and we don’t know how many are left in existence today that are still in original condition.
@Phil: The June issue of Globe Investor magazine had a column on collecting classical instruments. Unfortunately, it is hidden behind subscriber access:
http://www.theglobeandmail.com/globe-investor/e-zines/globe-investor-magazine/the-sweet-sound-of-an-investment/article1202270/
@Chris: Yes, whether it is coins or stamps or comic books or baseball cards, the investment aspect is applicable only to rare items. However, I wonder about some of the claims made in the columns. For instance, many auctioneers charge commissions to buy and sell in the 20% range, which doesn’t seem to be included in constructing the price index. To be fair, stock indexes don’t include trading commissions either but stocks can be bought or sold for a very small fee. Not so with coins or stamps.
@Steve: Exactly. Auction houses typically charge fees in the 20% range, which would drag down returns quite a bit.
Beer collection just doesn’t seem practical for two reasons:
1. It doesn’t improve with age, and
2. If you have it, why would you let it sit there and not be drunk?
Then again, apparently there is a market for very, very old wine which is probably not drinkable… so who knows!
Like Phil S said, liquidity is a major concern in exotic investments.
In illiquid investments, there may be a previous transaction suggesting the price of the investment. However, you may find that there is no additional buyer when you want to sell your investment especially at the previous transaction price.
Oh yeah! Don’t forget that if you are a collector of rare whatevers – cars, boats, musical instruments, jewelry, art, coins, comic books… You need to make sure that you INSURE your hard assets!!! Content insurance for your home and make sure you give your insurance agent the appraised value!!! If your collectibles hit some astronomical figure, your insurance may be rather high, but make sure it’s insured!
Okay, so we’ll tally up the costs:
*) Significant commissions to buy and sell.
*) Insurance. Typically 1% of the appraised value per year.
*) Maintenance. You don’t want to put your elbow through a Picasso like this: http://www.newyorker.com/archive/2006/10/23/061023ta_talk_paumgarten
I sent a few bottles of the Innis and Gunn Canada Day beer (only released over here in Canada, I think, despite it being Scottish beer) back with a family member to Ireland recently to sell and made a fair bit of money. And it was pretty repellant stuff. A note for you guys for next year!
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