Update: The rare book investment market
Update: The rare book investment market
"Once is a fluke, twice is a pattern, thrice or more is a trend"
I will always remember a rare stamp auction I attended in London, many years ago.
The lots were lolling along and then something extraordinary happened.
An innocuous little stamp appeared with a 50-60 estimate.
One man started bidding it up; he was one of Britain's most respected stamp dealers.
Thisstamp couldn't possibly be of interest to him. Why was he bidding?
And then auction fever struck...
Other peoplein the auction room started bidding for no apparent reason. They followed suit thinking they had missed something in the auction catalogue description.
The stamp was nothing special, it still isn't. Yet it sold for 300, 6 times it's true value.
But it turned out the stamp dealersimply HAD to buy the stamp.
He told me the story. Yes he had overpaid, the stamp was only worth 50, buthe had messed up an important customer's order and desperately needed a copy of this particular stamp.
Hence he was willing to pay over the odds simply to keep a VIP client happy.
The stamp eventually sold for 6 times what it was actually worth as a mad hysteria enveloped the auction room.
That'swhat we call aone-off price. It's a fluke.
If another example of that stamp had sold for a similar figure then we would have had a pattern.
But it's not till it happens three or more times that we have a new trend in the collectibles markets.
The rare book market is a good case in point.
Most of us read books, we enjoy the stories, and just as importantly we love to hold a piece of literature in our hands. We enjoy thetouch of the paper, the images on the dust jacket, thesmell of the print.
Soit doesn't surprise me to seethe rare book market booming.
We've alreadywitnessed the fluke prices. I'm pegging them to a sale in September 2009 whena 1929 first edition, first printing of Dashiell Hammett's Red Harvest amazingly brought over five times its $5,000 top estimate, selling for $27,450.
The patterns have appeared in thesix months since
A first edition of Charles Darwin's first work Tales of the Beagle sold for $33,000 at Christie's in November last year.
Not to be outdone Bonhams sold another copy for $36,600 last month. That's a 10.9% increase in value in just three months.
Darwin has been extremely popular at auction recently; afirst edition copy of Darwin's On the Origin of the Species by Means of Natural Selection also sold in November.
Again the auction house experts estimated it to be worth 40-60,000. It sold for 103,250.
Even asigned first edition Harry Potter book sold in February for $23,900 against an estimate of $15,000.
When auction house experts become so out of touch with prices we know the 'pattern' is over.
We're officially in a trend
Just this week at Bonham's auction house a copy ofKenneth Grahame's Wind in the Willows sold for 32,400, against an estimate of just 3-5,000.
Now it's always easy to glaze over figures, so let's put it another way, this book sold for almost 10 times what the book experts at Bonham's thought it would.
I was thinking about the demographics behind the rare book market the other day. And I did a bit of research.
It seems thatpeoplewhoread books are of an above average intellect. They are also likely to have an above average income, and, in turn,an above average investment portfolio. All common sense stuff, really.
And it looks like they have started placing money into rare books, first editions in particular, and especially books that have been signed by the author.
Prices are increasing rapidly as more collectors pile into the market.
In the last few weeks I have seen 17th century editions of Shakespeare works...
I've seen an incrediblefirst edition Frankenstein by Mary Shelley...
I've looked atfirst edition Charles Dickens.. and then there's Steinbeck, Hemingway, Tolkien, Sylvia Plath. The list goes on.
The thing that continually amazes me is that wecan all own a first edition of anyof these greats of literature.
No matter who your literary hero, I'm betting we can provide a rare book that will excite you, and ultimately prove to be a worthy investment.
And the best bit? Rare first editions can be had for as little as $5,000.
The rare book market is officially entering a trend. Prices are rising and now is the perfect opportunity to be investing.
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