Successful Investing:
You can hit pay dirt with the right collectibles
by Andrew Leckey
The
wild, wild ride of the 1999 stock market has more than a few investors thinking
that moving some money into collectibles and memorabilia might not be as
silly an idea as they once thought it was.
They see that Partridge Family lunch
boxes from the 1970s are now worth $100 and up. An "E.T.: the Extra-Terrestrial"
movie poster recently bought $1,000. A script from the film "Titanic"
goes for $1,000.
Experts predict that a "Butch Cassidy and the Sundance Kit"
or Clint Eastwood movie poster that now commands $200 will likely be worth
up to $700 five years from now. If you buy a "portfolio" of posters,
some are likely to hit pay dirt, they say.
Collectibles are no substitute for the stock market or other conventional
investments, but an entirely different animal with roots planted in pure
enjoyment. They don't offer the liquidity of stocks, for an item is only
worth more if you can find someone willing to pay it. They require brainpower,
good fortune and a sensible time horizon to succeed.
You must always be on guard for reproductions or fakes, especially star
autographs actually penned by assistants. This requires doing your homework
and obtaining necessary authentication. There's always room for adventuresome
beginners, with autographed photographs of newer or less-stellar athletes
and film stars current selling for $50 and move costumes and props starting
at less than $300.
The much publicized high end of the nostalgia craze is mind-boggling.
The U.S. Army draft card of Elvis Presley was recently auctioned off for
$22,500 at an MGM Grand Hotel event that garnered a total of $5 million.
At the Christie's sale of the personal property of Marilyn Monroe Oct.
27 and 28, the formfitting, flesh-colored and sequined dress she wore to
serenade President Kennedy at his birthday 40 years ago sold for a jaw-dropping
$1.15 million (1.26 million with commission), breaking the previous clothing
record set when Princess Diana's ink blue gown sold for $222,500 in 1997.
There's more: Slugger Mark McGwire's 70th home run ball from last year
brought a mind-boggling $2.7 million. A bid of $1 million for one of the
five existing pairs of ruby slippers from "The Wizard of Oz" was
actually turned down as too low. The Austin Powers "shagmobile"
was recently auctioned off for more than $200,000.
The reason behind some items exploding in value
is that they are rare, which distinguishes them all from all the Beanie
Babies, Pokemon cards and other mass-produced items less likely to appreciate
in value long-term because there are simply so many of them around. The
question is whether collectibles should be considered investments at all."After the stock market crash of 1987, I received a telephone call
from an investor who told me he'd just gotten out of the market and wanted
to quickly buy some collectibles that would rise 20 percent in value the
next year," recalled Eric Alberta, an executive in the collectibles
department of the New York-based Sotheby's auction house. "I told him
that if I was smart enough to do that, I wouldn't be working anymore."Those who do best in selecting items that appreciate tend to collect
with both their hearts and their minds, Alberta said. If you buy something
you like and it doesn't go up in value, well then, you've still got something
you like."If people are willing to stick with it three years or longer,
they'll see quite a significant increase in the value of what they've collected,"
predicted Michael Schwartz, director of entertainment memorabilia for the
San Francisco-based Butterfield & Butterfield auction house. "The
overall picture is one of significant increase, though some items have gone
down in value because there were too many copies or a particular genre wasn't
hot at the time."One-third of all collectors have used the Internet to further their
efforts, according to a survey of 2,000 collectors by market research firm
Unity Marketing. Besides the Internet popularity of eBay, there are other
ventures, such as a new on-line site for upscale art and collectibles initiated
by Sotheby's Holdings Inc. and Amazon.com. While the Internet marketplace
has increased interest in memorabilia, Schwartz believes, the trend was
already well in place a decade ago with collectors buying from private dealers
and auction houses."While we advise collecting what you like and collecting for fun,
historically there's definitely been an increase in prices of items produced
over the past 40 years, such as lunch boxes, autographs, movie props and
costumes," observed Bill Miller, publisher of the magazines Autograph
Collector Magazine and Pop Culture Collecting in Corona, California. "The
major difference between classic collectibles and newly manufactured collectibles
is that classics weren't produced in huge quantities."High-profile auctions attract wealthy people with unlimited funds who
are willing to bid whatever it takes to snare an item dear to them, Miller
acknowledged. However, Hollywood and pop culture collectibles are within
the reach of the average citizen if the individual attends less extravagant
events and also does some careful snooping around.