Rare Book Monthly

Articles - April - 2018 Issue

Credit Suisse Labels Rare Books a "Mediocre" Financial Investment

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Increase in values of various assets (from Credit Suisse Yearbook 2018).

Rare books hit the news wires in an unflattering way last month. Credit Suisse, the major banking and financial institution headquartered in Zurich, released its annual Yearbook. They spoke of investments, including what they call "non-financial investments" or "investments of passion," or even "treasure assets." Rare books made it into the passionate category, but not to the one of best financial investments. Of course, we are passionately invested in our wives, husbands, and children, but they aren't great financial investments either. Anyone who wants to trade them in for stock certificates has problems at home that go way beyond the scope of this article.

 

Before we proceed, we should note that this report is aimed at the wealthy, or even ultra-wealthy. That includes an estimated 193,490 (that's a fairly exact looking number for an estimate) people in the world with net assets over $30 million. Most of us fall into the "other" category, which I estimate to be 6,999,806,510. The wealthy are the people who can afford to invest seriously in various sorts of collectibles. Even among them, it is still a small percentage of assets. They estimate these people hold 25% of their wealth in financial assets (stocks, bonds, cash), 24% in real estate investments, 23% in personal businesses, and 16% in real estate they inhabit. Only 6% falls to collectibles.

 

We should also note that this is focused on long-term investments. You can trade in and out of stocks in the same day, but it's hard to be a day-trader in books or art. Day-traders can make money on the change of a few pennies in a stock price. You cannot do this with a Shakespeare First Folio.

 

The common wisdom is that stocks are the best long-term investment. That belief has become so ingrained that we would believe it even if it weren't true. Fortunately, we don't have to face such a predicament. Credit Suisse confirms our assumption that equities are the best long-term investment.

 

However, when it comes to collectibles, they have concluded there is a difference, and here is where they determined rare books are on the short end. The categories they examined were fine wine, classic cars, musical instruments, rare books, jewelry, and stamps. All of these fell short of equities, but within the group, the runaway winner was classic cars. This was followed by wine, jewelry, stamps, musical instruments (as represented by violins), and art. That leaves just books to fill the bottom rung. Credit Suisse describes books as providing a "mediocre financial return."

 

However, here is where the chart departs from common wisdom. If books have something of a bad rap, art has a different reputation. We have read stories of paintings selling for over $100 million. Anything by Andy Warhol, even prints, just a few decades old, brings huge prices. A piece of paper Picasso used to wipe his paintbrushes would cost as much as an average house. Still, art barely beat out rare books on this index.

 

Here are a few points Credit Suisse makes in their report about those who purchase "treasure assets."

 

(1). "In the eyes of the owner, they are beautiful and collectible items, even though they do not generate any financial income." They "provide an emotional reward in terms of enjoyment for the owner."

 

(2). "Rare books have been a passion investment for centuries."

 

(3). However, "collectors point to cultural and artistic investment not only as a pleasurable activity but also as a contribution to financial diversification." "[M]ost high net worth collectors say they are interested in the financial as well as the psychic benefits of their private assets. They are not hoarders and accumulators; they are investor-collectors."

 

(4). "Within the category of passion investments, investors almost invariably hold focused portfolios. The average of their holdings should not be regarded as a desirable allocation for an individual or institution."

 

(5). "Such investments are in many cases marketable only with a substantial transaction cost, so the purchaser of these tangible assets is likely to be someone with a long investment horizon for whom the liquidity of the asset is a secondary concern."

 

(6). "The case for private wealth assets is that they provide a mix of wealth conservation, financial diversification, and gratification. We support the view that a moderate allocation to tangible alternative assets is appropriate for high net worth investors."

 

We will add one more point. Rare books, like equities, is a category of financial asset, but unless you are buying some sort of index fund, you are buying individual items, not an asset class. Stocks may be the best performers, but there's a whale of a difference if you bought tiny Apple or Microsoft in the 1980s, or retail behemoth Sears or the high-flying airlines. In the latter case, you probably lost most if not all of your money. With books, as with stocks, the trick is successfully anticipating which will be more valuable years from now, buying for a fair price, and being patient.

Rare Book Monthly

  • <b>Koller Auctions: Books & Autographs. March 26, 2019</b>
    <b>Koller Auctions, Mar 26:</b> Jacques Gamelin. <i>Nouveau recueil d'osteologie et de myologie, dessine d'apres nature...</i> 2 parts in 1 vol., large folio, 82 copper plates. CHF 12,000 to 18,000
    <b>Koller Auctions, Mar 26:</b> Melchior Pfintzing. <i>Die geverlicheiten und einsteils geschichten des loblichen streytparen...</i> 118 woodcut engravings, first edition. CHF 30,000 to 50,000
    <b>Koller Auctions, Mar 26:</b> Book of hours. Handwritten Latin text on vellum. With 17 large miniatures, Flanders, c.1460. CHF 70,000 to 90,000
    <b>Koller Auctions, Mar 26:</b> Maria Sibylla Merian. <i> Dissertatio de generatione et metamorphosibus insectorum Surinamensium,</i> 72 copper plates, Den Haag, 1726. CHF 60,000 to 90,000
  • <b>Swann Auction Galleries Mar 21:</b> Princess Diana, group of 6 ALS to the editor of British Vogue, 1989-92. $5,000 to $7,500.
    <b>Swann Auction Galleries Mar 21:</b> Joseph Brant, Mohawk Chief, ALS, writing with news after pledging support to King George III against the American rebels, 1776. $20,000 to $30,000.
    <b>Swann Auction Galleries Mar 21:</b> Ulysses S. Grant, photograph dated & signed as President, portrait by Brady, 1875. $3,000 to $4,000.
    <b>Swann Auction Galleries Mar 21:</b> Alexander Graham Bell, ALS, accepting an invitation to tea during his only trip to Japan, 1898. $1,000 to $2,000.
    <b>Swann Auction Galleries Mar 21:</b> Nikola Tesla, signature & date on his monogrammed correspondence card, 1935. $3,500 to $5,000.
    <b>Swann Auction Galleries Mar 21:</b> Richard Wagner, ALS, concerning his opera Rienzi, 1869. $3,000 to $4,000.
    <b>Swann Auction Galleries Mar 21:</b> Henri Toulouse-Lautrec, autograph note signed, requesting the address of Yvette Guilbert, 1895. $2,000 to $3,000.
    <b>Swann Auction Galleries Mar 21:</b> Claude Monet, ALS, to painter Harry Lachman, complaining that his vision has not improved, 1920s. $2,500 to $3,500.
    <b>Swann Auction Galleries Mar 21:</b> Friedrich Hölderlin, autograph manuscript, unsigned, 7 lines quoting Michael Denis's <i>Ossians und Sineds Lieder.</i> $10,000 to $15,000.
    <b>Swann Auction Galleries Mar 21:</b> Guestbook for Lüchow's restaurant, over 400 signatures, including W.H. Auden, Grace Kelly & drawings by Charles Addams, NYC, 1950-56. $8,000 to $12,000.
    <b>Swann Auction Galleries Mar 21:</b> George Washington, lottery ticket, signed, 1768. $5,000 to $7,500.
    <b>Swann Auction Galleries Mar 21:</b> Vaslav Nijinsky, postcard dated & signed, showing a drawing of him in <i>Schéhérazade,</i> 1916. $2,500 to $3,500.
  • <b>Forum Auctions: Fine Books, Manuscripts and Works on Paper. March 28, 2019</b>
    <b>Forum Auctions, Mar 28:</b> Greco (Gioachino). <i>Primo modo del gioco de Partito…</i> Manuscript, France, 1624 or 1625. A collection of partiti, or 'chess problems' by one of the most important figures in the history of chess. £20,000 to £30,000.
    <b>Forum Auctions, Mar 28:</b> Herodotus. <i>Historiae,</i> translated into Latin by Lorenzo Valla and edited by Antonio Mancinelli. Venice, 1494. £15,000 to £20,000.
    <b>Forum Auctions, Mar 28:</b> Darwin (Charles). Autograph Letter signed to his cousin Reginald Darwin, Down, Beckenham, Kent, 27th March 1879. £12,000 to £18,000.
    <b>Forum Auctions: Fine Books, Manuscripts and Works on Paper. March 28, 2019</b>
    <b>Forum Auctions, Mar 28:</b> Nicolay (Nicolas de). <i>The Navigations, peregrinations and voyages, made into Turkie,</i> first edition in English, Imprinted at London by Thomas Dawson, 1585. £10,000 to £15,000.
    <b>Forum Auctions, Mar 28:</b> Saint-Exupéry (Antoine de). <i>The Little Prince,</i> number 66 of 525 copies signed by the author, 1943. £8,000 to £12,000.
    <b>Forum Auctions, Mar 28:</b> Catlin (George, 1796-1872). Tuch-ee, A Celebrated War Chief of the Cherokees, watercolour, [circa 1834]. £6,000 to £8,000.
    <b>Forum Auctions: Fine Books, Manuscripts and Works on Paper. March 28, 2019</b>
    <b>Forum Auctions, Mar 28:</b> Genetics.- A collection of c.300 pamphlets on genetics comprising many of the major contributions from the first half of the 20th century. £5,000 to £7,000.
    <b>Forum Auctions, Mar 28:</b> India.- Rajasthan.- Kota School (probably late 18th c.). Elephant in a landscape with chains around his feet, brush and black ink with opaque pigments. £5,000 to £7,000.
    <b>Forum Auctions, Mar 28:</b> Commelin (Caspar). <i>Horti medici Amstelaedamensis plantae rariores et exoticae,</i> first edition, 48 finely hand-coloured engraved plates, Leiden, F.Haringh, 1706. £4,000 to £6,000.
    <b>Forum Auctions: Fine Books, Manuscripts and Works on Paper. March 28, 2019</b>
    <b>Forum Auctions, Mar 28:</b> Plague-water and cookery & medical recipes.- Jackson (Mrs Sarah). Medical and cookery recipes, manuscript in several hands, title and 134pp., 1688-1755. £4,000 to £6,000.
    <b>Forum Auctions, Mar 28:</b> Vernet (<i>After</i> Joseph, 1714-1789). <i>[Vues des ports de France],</i> sixteen plates (of 18), etchings and engravings by Charles Nicolas Cochin fils and Jacques Philippe Le Bas, [c.1760-1780]. £4,000 to £6,000.
    <b>Forum Auctions, Mar 28:</b> Detmold (Edward Julius, 1883-1957). Parrots and Butterflies, watercolour. £2,500 to £3,500.
  • <b>Bonhams, Mar 12:</b> Walt Whitman. <i>Leaves of Grass.</i> First edition, first issue, SIGNED in block letters by Whitman. 1855. $200,000 to $300,000
    <b>Bonhams, Mar 12:</b> Isaac Newton's copy of John Greave's <i>Pyramidographia,</i> London, 1646. $50,000 to $70,000
    <b>Bonhams, Mar 12:</b> Colonel John Mosby. Robert E. Lee's autograph letter to Samuel Cooper reporting on Mosby's exploits, with Cooper's autograph note ordering his appointment to Major.
    <b>Bonhams, Mar 12:</b> Gyula Halasz Brassai. Large archive of autograph and typed letters, over 260, to his family including his wife Gilberte, 1947-1978. $40,000 to $60,000
    <b>Bonhams, Mar 12:</b> Archive of drawings and letters from Harper Lee to Charles Carruth, including an inscribed first edition of <i>To Kill a Mockingbird.</i> $20,000 to $30,000
    <b>Bonhams, Mar 11:</b> VESALIUS, ANDREAS. 1514-1564. <i>De humani corporis fabrica libri septem.</i> Basel: Johannes Oporinus, June 1543. $300,000 to $500,000
    <b>Bonhams, Mar 11:</b> HARVEY, WILLIAM. 1578-1657. <i>De motu cordis & sanguinis in animalibus Anatomica Exercitatio.</i> Leiden: Joannis Maire, 1639. $25,000 to $35,000
    <b>Bonhams, Mar 11:</b> BERENGARIO DA CARPI, GIACOMO. 1460-1530. <i>Isagogae breves perlucide ac uberrimae in Anatomiam humani corporis.</i> Bologna: Benedictus Hectoris, 15 July 1523. $15,000 to $25,000
    <b>Bonhams NY, Mar 11:</b> FRANKLIN, BENJAMIN. 1706-1790. <i>Experiments and Observations on Electricity, made at Philadelphia in America…</i> London, 1769. $10,000 to $15,000
    <b>Bonhams NY, Mar 11:</b> BENIVIENI, ANTONIO. 1443-1502. <i>De abditis nonnullis ac mirandis morborum et sanationum causis.</i>Florence: Filippo Giunta, 1507. $8,000 to $12,000

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