Credit Suisse Labels Rare Books a "Mediocre" Financial Investment
- by Michael Stillman
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.
Sotheby’s Bibliotheca Brookeriana: A Renaissance Library. The Aldine Collection D-M 18 October 2024
Sotheby’s, Oct. 18: Herodianus Syrus, Herodiani Historiarum, Venice, Heirs of Aldo & Torresano, 1524, Parisian binding for Jean Grolier by Jean Picard, ca. 1540
Sotheby’s, Oct. 18: Musaeus, Opusculum de Herone et Leandro, Venice, Aldo, 1495 (Greek text), interleaved with 1497–1498 (Latin text), English olive morocco by Charles Lewis, the Botfield copy
Sotheby’s, Oct. 18: Horatius Flaccus, Horatius, Venice, Aldo, 1501, Bolognese brown goatskin (between 1501 and 1503), arms of Mino Rossi and illuminated initials throughout
Sotheby’s, Oct. 18: Lucretius, De rerum natura, Venice, Aldo, 1500, English early eighteenth-century red morocco, the Fletcher copy
One of a Kind Collectibles Auctions Rare Autograph and Book Auction October 17th, 2024
One of a Kind Collectibles, Oct. 17: Abraham Lincoln Signed Letter on Executive Mansion Stationary To Secretary of The Navy re: Appointment for Naval Academy!
One of a Kind Collectibles, Oct. 17: Extremely Rare Ben Franklin Printed: Considerations on Keeping Negroes...Part Second. 1762.
One of a Kind Collectibles, Oct. 17: An impressively extra-illustrated copy; Including an Original leaf from Shakespeare’s 1623 First Folio!
One of a Kind Collectibles Auctions Rare Autograph and Book Auction October 17th, 2024
One of a Kind Collectibles, Oct. 17: Rarest Naval Autograph James Lawrence “Don’t give up the ship On " U.S. Ship Hornet June 19th 1812.
One of a Kind Collectibles, Oct. 17: Oversize Ernest Hemingway Signed Photo with long Inscription about Drinking Wine to his dear friend and Secretary Roberto Herrera.
One of a Kind Collectibles, Oct. 17: VOLTAIRE Signed Receipt about a partial payment of debt for the Duke of Wuerttemberg.
One of a Kind Collectibles Auctions Rare Autograph and Book Auction October 17th, 2024
One of a Kind Collectibles, Oct. 17: [Maps] Gio. Ant. Magnini, Italia, 1620.
One of a Kind Collectibles, Oct. 17: LAWMAN SALOON JUDGE ROY BEAN Signed Legal Document 1895-RARE!
One of a Kind Collectibles, Oct. 17: Autograph Album with James Garfield as President, Chester A. Aurthur as VP, William T. Sherman, Burnside, P.T. Barnum and many more!
One of a Kind Collectibles Auctions Rare Autograph and Book Auction October 17th, 2024
One of a Kind Collectibles, Oct. 17: Thomas Jefferson and James Madison Signed Four Language Ship's Paper.
One of a Kind Collectibles, Oct. 17: Hector Berlioz Autograph Musical Quotation Signed.
One of a Kind Collectibles, Oct. 17: Important Memorandum the Day after Gettysburg July 5th, 1863 where Lincoln asks all Department Heads of the cabinet to meet him at the Executive Mansion.
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RareBookBuyer.com We Buy Librairies & Rare Books Nationwide ABAA Dealer
RareBookBuyer.com Specialized in Purchasing Institutional Collections & Deacccessioned Books
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Heritage Auctions, Oct. 10:-11: J. R. R. Tolkien. The Lord of the Rings Trilogy. London, 1954-1955.FIRST EDITIONS, FIRST IMPRESSIONS, ALL IN THE EXTREMELY RARE FIRST STATE DUST JACKETS.
Heritage Auctions, Oct. 10:-11: Francesco Fontana. Novae coelestium terrestriumque rerum observationes... Naples: Gaffari, 1646. FIRST EDITION. Contains the first observations of spots on the surface of Mars.
Heritage Auctions, Oct. 10:-11: Adam Smith. An Inquiry into the Nature and Causes of the Wealth of Nations. London: Printed for W. Strahan and T. Cadell, 1776. FIRST EDITION of “the first and greatest classic of modern economic thought” (PMM).
Heritage Auctions, Oct. 10:-11: Benjamin Franklin. Mémoires de la Vie Privée de Benjamin Franklin, écrits par lui-méme… Paris: Chez Buisson, 1791. FIRST EDITION OF FRANKLIN'S MEMOIRS IN THE PUBLISHER'S ORIGINAL WRAPPERS.
Heritage Auctions, Oct. 10:-11: Samuel Johnson, Jr. A School Dictionary… New Haven, [Connecticut]: Edward O'Brien, [1798]. FIRST EDITION OF THE FIRST DICTIONARY IN ENGLISH BY AN AMERICAN AUTHOR, AN EXCEPTIONAL RARITY.
Heritage Auctions, Oct. 10:-11: Joseph Smith, Jr. The Book of Mormon. Palmyra: Printed by E. B. Grandin, for the Author, 1830. FIRST EDITION.
Heritage Auctions, Oct. 10:-11: Miguel de Cervántes Saavedra. El Ingenioso Hidalgo Don Quixote de la Mancha. Madrid: Joaquin Ibarra, 1780. THE BEAUTIFULLY ILLUSTRATED IBARRA EDITION.
Heritage Auctions, Oct. 10:-11: James Joyce. Ulysses. London: John Lane The Bodley Head, [1936]. FIRST ENGLISH EDITION, SIGNED BY JOYCE. Designated a “Presentation Copy” in ink beneath Joyce’s signature.
Heritage Auctions, Oct. 10:-11: [Photoplay]. Delos W. Lovelace. King Kong. New York: Grosset & Dunlap, [1932]. FIRST EDITION of "a most sought after title" (Davis).
Heritage Auctions, Oct. 10:-11: Ray Bradbury. Fahrenheit 451. New York: Simon & Schuster, [1993]. 40th Anniversary Edition. PRESENTATION COPY, INSCRIBED AND SIGNED BY THE AUTHOR TO HUGH HEFNER.
Heritage Auctions, Oct. 10:-11: Neil Gaiman. Original manuscript for the "Neverwhere" BBC television miniseries. [London: Crucial Films, LTD., 1995-1996]. TYPESCRIPT "NEVERWHERE" WITH NEIL GAIMAN'S NOTES AND AMENDATIONS THROUGHOUT.
Heritage Auctions, Oct. 10:-11: [DICTIONARY]. Noah Webster. An American Dictionary of the English Language... New York, 1828. FIRST EDITION OF WEBSTER'S DICTIONARY, UNCUT IN THE PUBLISHER'S ORIGINAL BOARDS
Heritage Auctions, Oct. 10:-11: Stephen King. Full Dark, No Stars. Baltimore: Cemetery Dance Publications, 2010. WITH AN ORIGINAL TWO-PAGE COLOR ILLUSTRATION BY GLENN CHADBOURNE
Heritage Auctions, Oct. 10:-11: George Orwell. Nineteen Eighty-Four. London: Secker & Warburg, 1949. FIRST EDITION, IN THE ORIGINAL DUST JACKET.
Heritage Auctions, Oct. 10:-11: H. G. Wells. The Time Machine: An Invention. London: William Heinemann, 1895 [but 1897]. With a SIGNED PHOTOGRAPHIC POSTCARD laid in.
Old World Auctions (Oct. 10): Lot 1. Rare First Edition of Oronce Fine Double-Cordiform World Map (1531) Est. $50,000 - $60,000
Old World Auctions (Oct. 10): Lot 2. French Edition of "Rudimentum Novitiorum" with Woodcut Maps of the World and Palestine (1543) Est. $27,500 - $35,000
Old World Auctions (Oct. 10): Lot 3. Complete Edition of Munster’s Cosmographia with over 100 Maps & Views (1560) Est. $32,500 - $40,000
Old World Auctions (Oct. 10): Lot 4. Purchas' Important Collection of Voyages with 88 Maps, Including John Smith Map of Virginia (1625-26) Est. $55,000 - $70,000
Old World Auctions (Oct. 10): Lot 5. Complete First Latin Edition of De Bry's "Grands Voyages," Parts I-IX (1590-1602) Est. $120,000 - $150,000