1. shopping
2. auctions

Your roadmap to the ins and outs of alternative
investments:
How to make BIG money
from beautiful things
By Karin Iten
How to make BIG money from beautiful things is issued and approved by Fleet Street
Publications (Pty) Ltd.
Registered office: Fleet Street Publications, Northlands Deco Park, Showrooms Stands 76-83, Units 29-30, Avant-Garde Avenue,
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Registered in SA, Reg No. 1999/019170/07. Vat No. 4430185282.
The past is not necessarily a guide to future performance. The value of any investment, and the income derived from it, can go
down as well as up. You may get back less than the amount invested. Never invest more than you can safely afford to lose.
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We do research all our recommendations and articles thoroughly, but we disclaim all liability for inaccuracies or omissions found
in this publication. Before investing, or if in doubt about the suitability of an investment, please seek independent financial advice.
ISBN: 978-0-620-45182-6
Prices as at 12 May 2010
© 2010 Fleet Street Publications (Pty) Ltd
1
Contents
Introduction
How to make BIG money from beautiful things
1
Chapter 1
Why alternative investments?
2
Chapter 2
How to appraise antiques and collectibles like a pro
4
Chapter 3
The 6 basic rules of investing in this market
6
Chapter 4: Auctions
Tips to becoming a successful bidder at auctions
7
Chapter 5: Art
Why money flows to it in good times and bad
9
Chapter 6: Coins
Thinking commodities? Consider investing in coins instead
14
Chapter 7: Antiques
Wiping the dust off antique furniture investments
19
Chapter 8: Stamps
This opportunity gets my “stamp” of approval
22
Chapter 9: Books
Read between the lines for a great investment
26
Chapter 10: Wine
Raise glass to real “liquid” investments
29
Chapter11: Cigars
A smoking alternative
33
Chapter 12: Memorabilia
As long as there’s a buyer, you can collect just about anything
36
Chapter 13: About your author
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How to make BIG money from beautiful things
Introduction:
How to make BIG money from beautiful things
When shares buckle, bond crash and the housing market grinds to a halt, it’s tempting to bail out of
everything and put your cash under the mattress. But, if you’re looking for a less extreme response to
difficult times – and one that’s proven to be a very effective wealth builder over time – you need to
take a serious look at alternative investments (otherwise known as collectibles).
Collectibles (like stamps, collectibles, antiques, art, coins, etc.) have a very low correlation to traditional
investments. And, right now, when we don’t know what’s around the next bend in this turbulent
financial sea, there’s a strong argument for diversifying a percent (around 5%) of your portfolio into
them. Because even during economic downturns, collectibles tend to hold their value.
They offer numerous advantages to your portfolio:
The reason for this is simple. Art and collectible offer your investment portfolio:
•
•
•
•
Diversification
Safety
Liquidity
And excellent long-term performance.
You see, when traditional investments go down in value, people tend to get out of those markets. The
need to put their money into something safer – gold, art, coins, stamps, etc. – leads to increased
demand for alternative investments.
And when this happens, the price of these collectibles shoots up. But, just like any market, there are
dangers too.
That’s why you’re about to discover how to spot a great investment piece – in just about every
collectible field – AND how to use various alternative investments to protect your portfolio. All in all,
you’ll find 10 handpicked opportunities in this report.
So what are you waiting for?
Let’s discover exactly why the world of alternative investments is such a lucrative environment…
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How to make BIG money from beautiful things
Chapter 1
Why alternative investments?
At first glance, the alternative investment world appears daunting.
What makes one piece of art more valuable than the next?
Does the antique shop around the corner have any “unrecognised” masterpieces that it’s selling at a
giveaway price?
How would you even recognise these undiscovered treasures?
And, while an artwork may look pretty, how do you know whether it’ll make a valuable addition to your
portfolio or not?
Quite frankly, the knowledge gap is the single biggest problem with investing in art and collectibles.
The first step to answering those niggling questions is to remember this simple rule of thumb:
“You need to know what you’re doing. It’s the only way to ensure you don’t get conned…”
To ensure you cover your bases from the get go, you need to know the pros and cons of investing in
this beautiful sector.
Five advantages of collectibles…
1. Many collectibles are portable. Through history, refugees (as well as fugitives) have used gold
coins, diamonds and art as portable stores of wealth.
2. They’re global investments. You can trade them anywhere in the world.
3. Collectibles generally gain capital value above the average rate of inflation.
4. Unlike shares, bonds and other investment instruments, you can actually enjoy your investment
as you wait for the price to appreciate.
5. It’s a passion – you’ll enjoy learning about your collectibles almost as much as you’ll enjoy the
hunt.
Three disadvantages of collectibles…
1. Highly valuable collectibles can be extremely expensive. This means you’ll often have to invest a
far larger portion of your capital than you’d normally risk on any one investment. And that
means greater risk.
Handy tip:
Always limit the amount you invest to less than 5% of your total assets.
2. The market’s teaming with conmen.
3. It’s a volatile industry utterly ruled by the dynamics of supply and demand. Sometimes, this can
lead to liquidity problems in certain sectors and, if you’re in a hurry to sell, you could find it
difficult to find a buyer.
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How to make BIG money from beautiful things
Avoid burning your fingers and you’ll enjoy the ride…
Apart from learning all you can about your area of interest, always rely on expert opinion. Remember,
it’s an auction or antique house’s job to properly authenticate an item. So start there if you want
information on a piece that’s caught your eye.
And remember, although you can collect just about anything, reduce your liquidity risk by only
investing in pieces where there’s a large demand.
So what are you waiting for?
Turn the page to discover how to find the very best item you can afford …
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How to make BIG money from beautiful things
Chapter 2:
How to appraise antiques and collectibles like a pro
There are a number of factors you must consider when determining the value of an alternative
investment. Your starting point is a price guide (you can get one at any auction house or online sites for
the area of your choice). It’ll enable you to look up the price of a comparable item to discover what “fair
value” is.
But, to really get an idea of what an item should really sell for you’ll need to consider the following:
Your seven-point checklist for a successful evaluation
1. Condition:
Don’t kid yourself into thinking that the more rare an item is, the more it’s worth. In truth, the most
important factor is the condition of an item. The value of something that’s in mint condition is worth far
more than an item of below average condition.
So how do you determine if your dream collectible is a good buy? Well, depending on the area of
expertise you’re interested in (be it stamps, antique furniture, art or anything else you can collect), use
these simple guidelines.
Look for:
•
•
•
•
•
•
•
•
Cracks, fractures and chips
Defects and manufacturing flaws
Finish condition (this includes things like varnish, etc.)
The material an item is made of (for example, teak furniture has a far higher value than
something made from pine)
Missing pieces or parts
Visible repairs and touch ups
Excessive wear
Tears, rips, stains and marks
2. Market trends:
Collectibles are extremely vulnerable to fluctuations in public tastes. Like anything fashionable, trends
can change in a blink of an eye. For this reason, market trends can affect the price of your collectible in
a positive way – by driving the price up – or in a negative way – bringing the price down. So don’t rely
on price guides too heavily when it comes to determining your piece’s worth. Depending on the trend at
the time of printing, you may be over looking the current fad.
Monitoring global political and economic shifts are a great way to spotting the next BIG trend. You read
that right! For example, in the early 80s, when OPEC’s oil pricing power declined, the price of oriental
rugs also took a hit. (Since both originate from the same area, it was only natural that oil issues would
affect other produce from the region like these rugs.) The lesson: Just like investing in the stock
market, don’t underestimate the power of the “big picture” when it comes to collectibles.
How do you avoid getting carried away with today’s “must-have” fashion? Appraisers, such as those
that work at major auction houses like Sotheby’s and Christie’s in London, suggest you keep a close eye
on your favourite collectible market. By doing so, you’ll be able to establish what the trend towards
your passion currently is.
3. Age doesn’t always equal value:
Any dealer will tell you that the most common thing they hear when doing an appraisal is: “This is old
so it must be worth something”. That’s not always true. To be a real collectible, the item needs to be
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How to make BIG money from beautiful things
rare. If, for example, everyone can get their hands on a similar piece, then supply outstrips demand
and you won’t get much for your item. So remember this: Only use an item’s age to help you determine
the authenticity of the piece. And that brings us to my next point…
4. Rarity:
Remember, the collectible market is driven by supply and demand dynamics. And that means an
extremely rare item (like a Tiffany lamp) will fetch a high price – even if it has a hairline crack. A
common glass lamp, on the other hand, with the same type of crack won’t be worth much at all.
5. Check for marks:
Have you ever watched the Antiques Roadshow on BBC? If you have, you’ll know that one of the first
things an appraiser does when he or she first comes across an item is to pick it up, turn it over and
check for marks. No, I’m not talking about scratches, tears and stains. I’m talking about the maker’s
mark or signature.
Marks can tell you a lot of things about an item. Here are few of them.
A mark can tell you three vital things:
•
•
•
If an item is real or fake.
When the piece was made – for example a coin will have a mint date on it.
Who made it – we’ve all seen signatures in the corners of a painting, but did you know that
Persian carpets carry the names of their makers on them too? Yes, that’s right, somewhere
within every carpets design you’ll be able to find the weaver signature. It may be small, but
next time you walk past a Persian carpet store, go in and ask the dealer about this fascinating
feature. And speaking of carpets, only master weavers are allowed to sign their name into the
carpet. If an apprentice or less experienced weaver created your favourite woven masterpiece,
you’ll only be able to find the weaver’s initials or signature mark.
6. Ask the experts:
Appraisers have a network of friends and colleagues that they’ll consult when they need information on
an item outside of their speciality. And you’d be wise to follow suit. Don’t be afraid to ask for help. It’ll
save you both valuable time and money.
Chat to dealers and find out as much about an item as you possibly can before you decide to buy it.
Chances are, you won’t be able to return it.
Handy tip:
To make sure you can’t be conned by limiting your field of interest.
Remember, information reduces your risk so the more you know about your
area of interest, the better off you (and your capital) will be.
7. Take the middle road:
Sometimes an item will sell for more than it’s worth, sometimes it’ll sell for less. And that’s why when
appraisers evaluate an item they always use the median price. That way, they give the buyer the most
accurate value.
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How to make BIG money from beautiful things
Chapter 3:
The six basic rules of investing in this market
No matter which area you decide to invest in (and we’ll explore them in more detail a little later), there
are six basic rules you need to follow to be a successful alternative market investor.
1. Buy the best you can afford:
The best works of art – from the great and not-so-great – appreciate more in value than mediocre
works by the same artist. Take Picasso, for example. Although all his pieces are highly valuable, the
works he painted in his later life (such as his cubist pieces) are worth more than works painted in his
blue period. The same is true for antiques and collectibles. Top examples always hold their prices
better, especially in a down market.
2. Ensure the item has a paper trail:
Good provenance (or history of origin) not only hikes but also adds to the resale value and allure of a
collectible item. This is because it shows prospective buyers the piece is authentic and tells the buyer a
bit about the piece’s history. People love a story and this will often drive them to buy a piece.
3. Buy signed objects:
I discussed marker’s marks earlier but it’s worth remembering this. Unlike art, where the signature is
clear, with antiques and collectibles you might not be able to see it when you display the item. But for
resale value, an investment piece must have one.
4. Keep pieces in top condition:
The better you look after an item, the more valuable it’ll be. That’s why there’s such a huge price
difference between items that are in mint condition and ones that aren’t.
5. Buy small scale objects:
On a rand/cmM basis, small items trade higher than big ones. This has to do with what antique guru
Jake Biddington calls “display logistics”. People tend to prefer smaller items because they take less
space.
6. Don’t buy at the top:
Tempting as it may be, don’t buy anything considered “terminally fashionable” – like art deco pieces,
this market’s far too fickle to find items with real long-term investment potential. If it’s on everyone’s
lips, it’s probably not a viable long-term investment.
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How to make BIG money from beautiful things
Chapter 4
Auctions:
Going once… going twice… sold!
Tips to becoming a successful bidder at auctions
There’s nothing like the thrill of an auction. On the day, hundreds of lots will be up for auction. And
that’s means being successful all comes down to your ability to think fast and react even faster. It’s an
aggressive and utterly nerve-wracking experience – especially if you’re a first time bidder. But there are
ways to make the experience a lot easier…
Four things to do before the bidding starts:
1. View the catalogue:
Auction houses generally release their auction catalogue about a month before the auction. So, if
you’re interested in attending – and possibly bidding on a piece – get your hands on a copy. These
days, most catalogues are available free of charge online. So once you’ve downloaded your copy,
run through it and mark all the lots you’re interested in.
2. Attend the preview:
Since most lots sell in about 30 seconds, it’s important to attend the preview and give yourself
plenty of time to properly assess the item. Check the item for damage and signs of restoration.
Handle it as much as possible and look at it from every angle. Any irregularity can seriously hamper
the feasibility of buying the piece as an investment. And remember, most auction houses don’t have
an exchange or return policy. Once you buy it, it’s yours. So make sure you like it. If you have any
questions about any of the items you’re interested in, the preview is the perfect time to approach a
house specialist. They’ll be too busy to give you an in-depth answer on the day of the auction.
3. Set a maximum price:
With all the hype of auction day, it’s easy to get carried away by the thrill of the chase. That’s why
you need to set a maximum bid before the day. So go online and do some research. Check how
much items of similar quality and from similar periods have fetched in the past and determine how
high you’re willing to go. A site like www.artprice.com will be able to help you with your research.
4. Pre-register:
Don’t forget to pre-register for the auction with the accounts department at the auction house. To
do so, you’ll need to give them your name, address and, in some cases, your bank account details.
They, in turn, will give you your paddle or bidder number. By pre-registering you’ll not only be able
to walk straight into the auction on auction day (a useful thing if you’re running late), but you’ll also
get a lower bidder number. If there’s a tying bid on the day, the auction house will use the lowest
bidder number to break the tie.
What to do on the day of the auction:
When a lot you’re interested in is called, the auctioneer will ask for an initial bid – usually at the
predetermined opening bid price you’ll find in the catalogue. If you’re a novice, don’t open the bid. You
don’t want “phantom” buyers to chase the price up because they can tell you’re overeager.
Once the opening bid’s been placed, bidding will move in standard increments – usually 10% of the
initial price. So if the initial bid was R1,000, you’ll need to raise your bid to R1,100 to be in the running.
If the auctioneer can’t get a bid for the initial price don’t panic, in this case the auctioneer will drop the
asking price by about an third to drum up interest.
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How to make BIG money from beautiful things
To raise your bid by the allotted 10%, simply raise your paddle and make eye contact with the
auctioneer or one of his assistants. If, on the other hand, you want to raise the bid by an increment
different from the standard raise – say up the price by R500 – then you’ll raise your paddle and call out
your bid.
As the bidding winds down, the auctioneer will ask for a final bid. Once sold, the auctioneer will close
the bidding and acknowledge the sale by calling out the bidder’s number and adding a description so
you know if you’ve won the piece or not.
You then need to go to the accounts department after the auction and settle your bill. Give them your
bidder number and check that all the lots on the bill are yours and no items are missing. Remember,
once you’ve successfully bid for an item, it’s yours. And you’ll have to pay for it. So make sure you
have enough money in the bank to pay for it.
Finding a collectible that fits the bill is easier than you think. You’ll discover this in our next chapters…
Happy bidding!
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How to make BIG money from beautiful things
Chapter 5
Investing in art:
Why money flows to it during good times… and bad
George Sutton, a senior research analyst who covers auction giant Sotheby’s believes, “investors
overestimate the impact of a recession on the art market.” In fact, Michael Moses, who is arguably the
art-world’s most famous academic expert on art pieces, agrees. He maintains that a sell-off of shares
has actually been a godsend for the art market.
“When individual’s sell equities, they need to put the proceeds somewhere, whether
it’s gold, cash or art… and money flows to it during good times and bad times. And
when people are disposing of other assets, there may be an opportunity for some of
those assets to flow into the art market.”
Why?
The value of art lies
in the eye of the
beholder
Well, quality art survives economic downturns because its value never goes below
zero (unless damaged) – and prices bounce-back quicker after crashes than most
equities. In the case of art, it’s all about building up positive long-term returns.
But perhaps the best argument for investing in fine art comes from its proven low-to-zero correlation to
the movements of other assets – especially shares, bonds and real estate. Interestingly, art also
outperform commodities during the most volatile stock market downturns. This is mainly because art
itself is finite. Only a limited quantity is available and demand consistently outstrips supply.
But the fact is, these days, people increasingly view art as a hedge against the volatility of the stock
market. And you’d be silly not to diversify some of your portfolio into this sector.
But where do you begin?
The art world is a realm filled with subtle nuances, splashes of colour and every tint and shade you can
imagine. But, when it comes to the business of investing in art, the world is simply black and white. The
premise is simple: You buy a piece of artwork and hope it goes up in value.
Contrary to popular belief, this isn’t as easy as it sounds. In fact, art isn’t really an “investment” in the
pure sense of the word! Unlike buying shares, art doesn’t generate dividends or interest and actually
costs you money to maintain. Worst of all, the value of your piece is often only truly realised when you
sell it.
So, why would you even consider investing in such a fickle asset?
Well, much like investing in blue-chip companies, when you buy and hold for the long-term you can
rake it in. To do this, you need to ask yourself this obscure question: When is art NOT an investment?
If you’ve ever asked: “What is art?” you’ll know the question is near impossible to answer. Indeed, the
answer really does lie in the eye of the beholder. But, thankfully, there are some guidelines for
discovering whether a work of art is a good or a bad investment.
When not to look twice at an artwork:
1. When there are no potential buyers:
Just like any investment, the basic economic principle of supply and demand applies. While not being
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How to make BIG money from beautiful things
able to find a buyer for an artwork can depend on many factors (including market sentiment and
timing), it may also indicate that the artwork isn’t a collector’s item and, as an extension, not a great
investment. So ask around at your nearest auction house and read up on past auctions to find out what
prices have been set for a specific artist and whether there is high demand for the artist. Also visit sites
like www.artinvest.co.za to discover what prominent SA art pieces are selling for.
2. When the restoration costs exceed the artwork’s value:
Many investors look at art in much the same way they'd look at a house. But, this isn’t the best way to
go about it. Unlike a house, which you might consider buying to fix, thereby increasing the value of
your investment, if the cost of restoring a piece of art far outweighs the value of the piece you may
never recover the money you’ve laid out. The same rule applies to the frame. If a painting or sketch
was badly framed and it’s impossible to fix the job without ruining the piece, steer clear.
3. When it isn’t a slice of history:
Apart from aesthetic merit, the work also needs to have historical importance. This means history in
terms of the artist and the art world. And it's the reason why earlier works often sell at a cheaper price
than later works by the same artist. Remember, for the work to be in demand, the general public must
be able to recognise the artist’s contribution to art history.
Contemporary art is also not the best investment. Why? Well, in the same way a certain look may be
fashionable for a season or two, an artist may be a fashionable addition to your home for a while. But,
this doesn’t mean it’ll retain that value once the trend is over. You may be stuck with a piece with no
market. So unless the artist is setting the world alight with his/her pieces (see the list on page 13), stay
clear.
4. When it’s a fake:
Just like any other creative field, there are many imitation artists out there that plagiarise the work of
famous artists. So, do your research and ask an expert before buying a piece. If you discover the work
you’ve bought is indeed a fake, or worse copied, you’ll battle to get your money back.
Also be careful of auctions held in storage facilities or hotel lobbies. Yes, you may pick up amazing
bargains there, but ONLY if you know what you’re doing. Research is the key – so make sure you check
out the websites listed at the end of the chapter.
5. When it’s overpriced:
The value of a work of art is determined by what the buyer’s prepared to pay and what the seller’s
willing to sell for. So do your homework. If you’re interested in an established artist’s work, find out
how much previous pieces from the same period went for. This way, you’ll have a good indication of
how much the work should sell for. Websites like www.artprice.com are a great tool to help you do
just this.
6. If you don’t like it:
This should go without saying, but I’m going to mention it anyway: Don’t buy something you can’t live
with. You wouldn’t want to be stuck with a piece of art you don’t like and can’t sell for the rest of your
life!
Don’t make these five basic mistakes…
Now that you know when art isn’t an investment, let’s look at the biggest mistakes beginner art
collectors make:
1. Buying a piece you haven’t viewed in person – you possibly won’t be able to return it so check
the conditions of the terms of sale before purchasing the piece.
2. Not doing your research about the artist, price, period, demand, etc.
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How to make BIG money from beautiful things
3. Not considering the value of the work in terms of size, period, condition, provenance
(previous ownership) and condition.
4. Buying a forgery.
5. Going it alone. Choose a dealer wisely and it’ll be the best money you ever spend.
So how do you pick art with real appeal?
If you’re looking to buy the best selling piece of art you can afford, consider these factors:
•
•
•
•
•
A portrait of an attractive woman will have a higher demand than
a portrait of an old man.
Nudity, if done tastefully, always sells well.
Paintings with brighter colours attract more attention (and
therefore sell better) than paintings with sombre colours.
A painting containing geese and ducks will sell better than one
with cows in it.
Landscapes and seascapes fetch higher prices than portraits do.
The five best art categories to suit your budget
Landscapes in bright colours
Art is an ever-changing market. But, over the years, there’s been a
(like this Piet Van Heerden
piece) are better
significant shift towards different categories when it comes to investing in
investments than sombre
pieces with real appeal. While painting and sketches by the likes of
portraits
Toulouse-Lautrec, Van Gogh, Rembrandt and Da Vinci will fetch you a
pretty penny, most of these works adorn the mantelpieces of the most famous art collectors and art
museums in the world.
Since you’re not likely to be able to get your hands on a piece by these legends, let’s ignore the “grand
masters” and look as the top five most sought after (and affordable) types of art in the art world:
Category
Where can you find the best value?
Latin American and
Caribbean art
This is a very collectible and relatively inexpensive art form. Look out for
scenic pieces by Jackie Hinkson and pieces that come from South
American tribes.
Surrealism
Think Salvatore Dali. While you may not be able to get your hands on
Dali’s original paintings, there’s a big market for works that follow this
style of art (from the likes of Magritte and Man Ray). This is also a great
area for investors to build up a good print collection.
Modern European
paintings
This highly established category is very liquid. Pieces with widespread
appeal include works by famous British painters George Stubbs and Air
David Hockney.
African art
This is a growing segment of the art world, with SA leading the pack. And
it’s becoming more and more sought after by collectors from both Europe
and America. Discover the most prominent artists in the country turning
to page 13 or visiting sites like www.artinvest.co.za.
1980s painters and pop
art
Be warned, if you’re risk-averse this isn’t for you. Pop art experiences
large shifts in perception and has struggled to find mainstream acceptance
in the art world. But, pieces from Andy Warhol and the like will stand you
in good stead.
What to look for in fine art…
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How to make BIG money from beautiful things
First be concerned with the price. Good value at a good price is a great formula. But in the art world,
good value often comes at a price. You should look for something that’s high in price and preferably has
a price history. In other words, you want to see the price rise over time.
For example, five years ago, a painting by SA artist John Meyer would have fetched about R80,000.
Today, you can expect the same piece to sell for around R300,000.
Remember, you want to buy something that’s in demand but not in huge supply. If you can’t find out
how much a particular piece has increased in price, try to establish an estimated value by looking at
other forms of art by the same artist or an artist who uses a similar technique.
Handy tip:
You’re going to live with this piece for some time so take you personal taste
into account too. Look for evocative pieces that reflect elements of design,
harmony and balance, as well as structural and spatial order. Art should be
sophisticated, emotive and thought provoking. The “visual language” of a
piece should create a sense of awe, mystery and delight.
Warning: Holding art can be a costly venture…
Don’t forget that there are costs involved when you begin to collect art as an investment. These are
“invisible” opportunity costs. So before you begin, investigate the cost of insurance, possible repairs
and maintenance and safe storage.
•
•
•
•
Insurance costs: R100,000 worth of household contents insurance can cost you around R2,000
a month. For a small art collection, it’s often better to use this broad cover instead of an
individual policy. But, before you decide, ensure this adequately covers the repurchase cost of
your pieces should someone steal them. Always itemise the art in the policy with valuations that
corresponds to the full replacement cost of the piece.
Valuation costs: A certified valuation will cost between 0.1% and 0.2% of the item. This is
necessary for both insurance purposes and for resale estimations at an auction.
Repair and maintenance: Paintings, prints and photos may require restorative work, such as
cleaning, reframing or screening. These costs will depend on the individual piece and the
condition of the item.
Safe storage: Use protective screen that block the art from light that’ll fade the work for
valuable pieces in your collection. And install individual burglar alarms.
Tax implications…
Art is not a tax-free investment. When you buy, you’ll be liable for certain transaction costs, including
the buyer’s premium plus VAT. And, when you sell, you’ll have to pay the seller’s commission and
capital gains tax on the item.
As a rule of thumb, if you add 20% to the investment when you buy it and deduct 20% from the gross
proceeds after you sell it, that’ll roughly account for your transaction cost. This means, that if you don’t
wait for the piece to appreciate, you can lose up to 40% of your initial investment. Remember, art is a
long-term investment and you need to be prepared to hold onto a piece for a few years to make real
money in this environment.
Top SA artists to keep your eyes out for:
According to Stephan Weiz, one of SA’s foremost art experts, while European art of has fetched
excellent prices at auctions overseas, “you’re very much better off collecting South African art”. But as
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How to make BIG money from beautiful things
a novice collector, where do you start to look. You’re first thing to remember is that you must LIKE the
piece you buy, if you don’t there’s no point in buying it.
After that, don’t forget to look for pieces from high-demand artists. Here’s a list of the top artists in the
country that you should consider investing in:
Upcoming contemporary SA artists:
• Zakkie Eloff
• Louis van Heerden
• Clement Serneels
• W.W. Battiss
• John Koenakeefe Mohl
• Gerard Sekoto
• Ephraim Ngatane
SA’s top 14 established master artists:
• Peirneef
• Maggie Laubser
• Hugo Naudé
• Gregoire Bonzaier
• Alexis Preller Frans Oerder
• Adolf Jentsch
• J. E. A, Volshcenk
• Terence McCaw
• Piet van Heerden
• Francios Krige
• Alfred Krenz
• Erich Mayer
• Irma Stern
• William Kentridge
Worth taking a look:
www.artinvest.co.za
www.artprice.com
www.absolutearts.com
www.artprice.com
www.christies.com
www.sothebys.com
Discover the most prominent artists in the country (and what they
demand per painting) on this site.
This database houses images and 290,000 catalogues online.
It’s a great place for an art enthusiast to compare prices and find
out about upcoming auctions around the globe.
This site provide daily international art news.
A site for enthusiasts of Anglo-French art.
A very concise, in-depth art site offering auction facilities.
A great site that provides you with auctions news and art
information services.
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How to make BIG money from beautiful things
Chapter 6
Investing in coins:
Thinking commodities? Consider coins instead…
The US dollar’s been depreciating for years. And it’s clear that the dollar’s “safe haven” status will
ultimately come to an end.
So what can you do? Where do you run? Is there anywhere you can stash your cash to protect your
hard earned money?
Well, with the price of gold quoted in dollars, it’s only a matter of time before the market realises the
dollar’s true worth and gold comes to reflect its true value.
And it’s in this that your profit lies!
Gold’s been a store of value for over 6,000 years. Yes, it may seem like a boring old investment, used
in everything from your computer to your fillings, but right now it’s the only place to run and hide.
Let’s face it, you don’t really want greedy bankers and investment advisors getting their hands on your
money… We’ve seen the damage they’ve caused and can now say what we’ve suspected all along: Most
bankers and investment advisors, who peddle their products in fancy packaging, are only interested in
their own commission and profits. They’re NOT looking out for your best interests.
That’s why, with interest rates at 300 year lows, Alan Demby (Chairman of the South African Coin
Exchange) reckons you should invest in physical gold – like coins. Even though they haven’t given any
annual income since their creation, they’ve richly rewarded owners and hoarders for years.
So what drives the coin market?
The coin market moves in cycles. Both internal and external forces cause this cyclical behaviour. Since
internal forces are constantly working within the coin investing market, let’s take a look at the ones that
matter first.
Like all markets (shares, commodities, currencies, commercial real estate, etc.), coin investing reacts to
the price-driven internal forces of supply and demand People buy coins until prices get way too high,
then they sell until prices get way too cheap. The market builds momentum going each way. These
forces are very powerful. And because of them, coin investing can experience a bull market even in the
absence of bullish external forces.
There are also three major external forces at play in the coin market too. These are inflation, the stock
market and gold and silver prices.
• Inflation:
This is a major influence on the coin investment market. In the past, the collectible coin market
has always done very well in periods of increasing inflation. Remember, rare coins are a superb
inflation hedge.
• The stock market
Coins do well when the stock market does poorly. Coins also do very well when the stock market
does well, but not as well when the stock market soars.
• Gold and silver prices
Fluctuations in the gold and silver price have a clear impact on the rare collectible coin market.
But, that said, investing in coins can also bode well even without huge moves in gold and silver.
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How to make BIG money from beautiful things
Make massive gains from coin investing
The biggest blight to investment performance, besides the initial costs, is annual costs and fees. But if
you buy gold in the form of coins, like Krugerrands, there are no annual costs, no management fees
and no performance bonuses, etc.
If, for example, you invested R10,000 in Krugerrands 40 years ago, your coins would be worth over
R3.6m today!
Says Alan Demby:
“In good conscience, I’ll still tell you to only put 10%-15% (okay, maybe 20%) of your money into
physical gold in these uncertain times. We believe you should put two thirds of your “gold money” into
bullion coins, such as Kruger rands, which are dollar based and very liquid. The other third should be
put into local and international collectable coins and rare numismatic coins that give you steady growth,
international exposure, a store of value, and aren’t as volatile as bullion coins.”
When looking into the world of coin investing, a good starting point is to look at the distinction between
rare coins and bullion coins, like Krugerrands. The value of bullion coins is reflected solely by the weight
of the bullion they contain. The value of collectible coins, in contrast, depends on their scarcity and
condition. This means investors and collectors set prices independently. This happens mainly through
the auction market and a network of coin dealers. So while rare coins are made of gold (or in some
cases silver), their value isn’t dependent on the price of bullion.
Although rare coins are positively correlated with gold, price increases lag behind those of gold. When
gold goes up, rare coins follow. And, eventually, they go up much more than gold. Over the years, this
has provided an early warning signal of impending bull markets and produced windfall profits for
knowledgeable investors.
But unlike normal gold bullion coins, reliable, independent reports show that average annual returns on
rare coins have historically been more than 300% greater than the returns on gold bullion.
It’s the perfect time to invest in rare, collectible coins…
Right now, the factors that influence the rare coin market have become
overwhelmingly bullish. More importantly, the price of gold has gone up more
than $570 since 2005. And when gold goes up, rare coins follow – albeit a little
more slowly. If history is any guide, we can expect to see the rare coin market
take off soon and it’ll far exceed the performance of the gold market.
Collectible coins are
more valuable than
the gold bullion
So why not go one better than gold bullion and look at rare coins as an
investment medium instead? You can do this directly – by building up an
investment-grade collection yourself – or by buying a ready-made coin
collection through a reputable dealer.
Five important advantages of coin collecting
The rare collectible coin market’s bottom-line is one of the best of all investments. Here are five
important advantages of rare collectible coin investments:
1. Liquidity
Rare coins are the most liquid of all collectibles. Since 1963, the Coin Dealer Newsletter has published
weekly dealer-to-dealer pricing information for all important US coins. So what can you expect from the
rare coin market in terms of liquidity? Well, when the time comes to sell your coins, you can expect
(and receive) immediate payment.
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How to make BIG money from beautiful things
2. Diminishing supply
This is a subtle, yet very important, investment advantage. The supply of collectible coins diminishes
daily. Not only are they not making any more $20 Saint-Gaudens, Buffalo nickels, Walking Liberty
halves, Morgan silver dollars, etc., but the available supply is constantly diminishing as a result of
meltings, abuse, neglect, etc.
The advantage of this is twofold. First, any increase in demand makes price increases inevitable. You
can’t increase the supply of coins to meet new demand. The only way demand can be satisfied is with
higher prices. Second, a limited supply reduces the downside risk. As prices come down, production
gluts (as in the oil market) don’t depress prices further and hinder a price recovery. In fact, in the coin
investment market, low prices tend to drive coins off the market.
3. Affordability
A collectible painting can cost thousands of rands or more. Rare collectible coins seldom cost more than
R500,000 – (and they’re generally for imported, top quality coins). Top-of-the-line art, diamonds and
real estate all demand very large amounts of money for the purchase of a single item. But most coin
investments are in the R10,000 to R100,000 price range.
In terms of affordability, this means you can expect to participate no matter what your investment
budget is.
4. Favourable tax treatment
This is a seldom talked about (but significant) advantage of coin investing. According to SA Coins,
South African rare coins aren’t taxable on their sale. That means there’s no CGT (Capital Gains Tax)
payable on profits when you sell. And you can’t be taxed on the profits that you earn from investing in
them. Krugerrands, however, do attract CGT.
5. Anonymity
All of us have different degrees of confidence (or should I say paranoia?) about the government. I,
personally, feel global government intrusion into the private financial affairs of its citizens has become a
major concern for all investors. Just look at what’s taking place in tax havens (like Switzerland) and
issues surrounding tax secrecy in America. Luckily those who invest in coins don’t have to fill out any
special government reports.
Seven points you need to know about coin investing and the value of rare coins
I asked Van Simmons – who’s been in the coin business for over 40 years and contributes to the
renowned Daily Wealth investment eletter – for some advice. Here are the most important lessons he’s
learnt and he believes you should apply these to your coin investing pursuits too:
1. There’s no such thing as a bargain
Bargains (“rips” in numismatic insider terms) are a seldom-encountered exception to the day-to-day
reality of the coin marketplace.
A bargain in this market is a purchase you can resell immediately for a profit of more than 20%.
Instead of bargain hunting, concentrate on investing in rare coins at slightly under fair market prices
and selling them for a little more than you paid – 5% or higher.
2. Expect rare coins to often be overgraded
Misrepresentation is a problem in most collectible fields (coins, stamps, art, antiques, etc.). In the rare
coin field, the two basic forms of misrepresentation are counterfeiting and overgrading. Counterfeiting
is a fringe problem. “Reputable” dealers don’t knowingly sell counterfeit coins. Unfortunately, you can’t
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How to make BIG money from beautiful things
say the same for overgrading. The quality of a coin has tremendous bearing on its price. Very minute
differences in quality often mean large differences in price.
Your best protection against buying overgraded coins is to learn to grade accurately. However, grading
is a difficult skill to master. Still, you can be aware of the basic grading concepts. Carefully examine
every coin you purchase. Notice how sharply the details of the design stand out. Take note of all major
and minor marks. Now compare the coin with another, preferably of the same type. The coin with the
greatest detail and fewest marks is logically the better coin. Above all, seek professional assistance
because rare coins are often overgraded.
3. Value is relative
Coins don’t have absolute values. They have relative values that constantly change. So always consider
the following stumbling blocks to accurately assess the value of rare coins:
• Price guides don’t buy or sell coins. The common mistake is to say: “This coin is worth R50,000,”
when all you’re really saying is: “This coin catalogues for R50,000”.
• Mintage isn’t always relevant either. The number of coins supposedly made of a particular issue
(mint records are sometimes inaccurate) often has little bearing on its value. The number of
surviving specimens is the important consideration. Disregard mintage and concentrate on
availability.
• Prices can be determined only when coins are on the market. It's very difficult to pinpoint prices
of unavailable coins. But you can get a rough idea by looking up past sales on the internet and
rummaging through price guides.
4. Pretzel logic is the predominant mode of thinking among rare coin buyers
Most coin buyers, both dealers and public, buy high and sell low. The gold bullion market offers a
perfect example of this “pretzel logic.” In January 1977, at $250 an ounce, everybody wanted to buy
gold. At $200 an ounce, it didn’t look as good. People who bought at $250 quickly became sellers.
Fight the psychological forces of fear and greed that keep you from buying underpriced coins and from
selling overpriced ones. Remember, pretzel logic is the predominant mode of thinking among rare coin
investors.
5. High-quality coins increase in value faster
The best quality is in the greatest demand; therefore, prices of high-quality coins increase more rapidly.
Don’t settle for less than the best: High-quality coins increase in value faster than off-quality coins.
6. Rare coin investing fact: You must sell your coins
When a coin reaches its full price potential, you should sell it. Remember, by knowing how much other
coins in this area have sold for, you’ll get a good understanding of how much your coin should sell for
and the average percent the coin’s price has risen. Don’t forget, only by selling your coins are you able
to convert paper profits into real profits. Plus, you’ll become familiar with the mechanics of the selling
side of the coin investing market. (This will be a great help should you ever need to sell quickly.) So
learn about the selling side of the rare coin investment market because, the fact is, eventually, you
must sell your coins.
7. The secret to successful coin investing is paying a fair price for properly graded coins
The easiest thing to do in the coin market is spend money. It’s not quite as easy to receive fair value. If
you’re lucky, you’ll buy rare and collectible coins from a dealer who marks the coins up 15% to 30%
above his cost. Many dealers mark coins up 50% to 100% above their cost.
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How to make BIG money from beautiful things
Handy tip
The following coin investing tips will help soften the blow of excessive dealer markups:
•
•
•
in
Be aware of the price you’re paying for coins.
Study and compare coin prices.
Ask for buy-backs. Find out at what price a dealer would buy his coin back. Get it
writing.
To participate in all the fabulous rare coin profits you read about, you must realise that the most
guarded secret to successful coin investing is paying a fair price for properly graded coins.
How to avoid devaluing your investment…
•
•
•
•
Store your coins in a wooden cabinet, album with plastic cases or attaché briefcase.
Avoid direct contact with wooden surfaces.
Invest in a magnifying glass to help you examine the coins.
Remember, the act of cleaning a coin can permanently damage and devalue it. Often, coins are
worth more it they’re dirty or show signs of wear. Remember this. Don’t ever rub your coins.
Should they begin to look a little grotty around the edges, bath your coin in metholated spirits
for a few minutes and then wipe with a soft cloth – it’s the best way to remove the grime.
So what coins should you look out for?
South African rare coins have a long history of giving some of the highest financial return in SA. For
example, a 1902 Veldpond – with a mintage of 986 pieces – was worth £1 when it first came out. A
year later, the value of the coin had shot up 1,000% to £11. And it’s still one of the most sort after SA
coins in the world. South Africa is also the proud owners of the rarest coin in the world – the Single 9,
which has a mintage of just one coin and is worth around R18 million.
But finding a Single 9 is like looking for the proverbial needle in a haystack. Instead, look for coins
dated between 1874 and 1902 – to date, coins minted in this period have doubled in value. Modern rare
coins (minted between 1923 and 1964) are also extremely valuable – especially proof ¼ pennies
minted in the 1920s.
Also keep
•
•
•
•
•
your eyes peeled for the following coins:
The Sammy Marks Tickey
Burger’s Ponde
1996 Constitution coins
Desmond Tutu R1 coins
The 2004 Mandela Coin
Worth taking a look:
www.scoin.co.za
www.southcapecoins.co.za
www.numismatics.org
The official website of the South African Coin Association. A
great site for learning more about the South African coin
market.
South Cape Coins is one of South Africa’s premier rare coin
dealers.
The website for the American Numismatic Organisation. Visit
it for more information about coin investing and to view and
read about collection pieces.
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How to make BIG money from beautiful things
Chapter 7
Investing in antiques:
Wiping the dust off antique furniture investments
By definition, an antique is an object that has special value because of its age, especially a domestic
item, or a piece of furniture or handicraft esteemed for its artistry, beauty, or period of origin. But there
are three distinct areas that can be incredibly lucrative investments: Furniture;
pottery and porcelain; and clocks and watches.
Let’s look at each one briefly in turn:
Demand for quality antique furniture has never been bigger
Thanks to the political and economic uncertainties since 9/11, there’s been an
insatiable demand for rare furniture. Collectors and non-collectors alike have been
scouring the market for rare, exceptional quality pieces with pedigree and/or
providence. Most sought after are good quality late 17th and early 18th Century
walnut items as well as pieces from the same period made out of English
mahogany.
But, what is it about these pieces that you should consider when choosing them
as part of your investment arsenal?
Don't forget to
consider a piece’s
form and function
before you invest in it
First and foremost are style and utility. They’re important factors when determining the value of a piece
of furniture. Also consider the monetary value of the set. In most cases, an entire dining room suite is a
rare acquisition. If you can get your hands on a dining room table, sideboard and chairs from the same
period they’ll be worth a lot more as part of a set than they will when considered individually.
You’ll be spoilt for choice by the pottery and porcelain out there
The two most important things you need to now before entering the world of porcelain and pottery
collections is that it’s becoming increasingly difficult to find buyers for damaged pieces and over
restored items are just about impossible to sell.
Yes, quality items are experiencing unprecedented growth and a rise
in prices. But you need to know what the market wants before you
get involved in this fickle asset. Investment grade pieces are those
that incorporate animals (especially equestrian figures) and any
figures of real clarity and quality. Demand for French Faience,
particularly Quimper, has substantially increased in recent years. The
reason: There’s an active group of collectors and specialist dealers in
this field.
It’s also becoming increasingly rare to find complete dinner and tea
services. Especially ones that are highly decorative and in good
condition. These days, there’s a huge financial advantage to keeping
pieces together – rather than selling them individually. So if your mother (or grandmother) leaves you
a fine set of Herringbone china in her will – don’t underestimate it’s true worth.
Chinese artefacts are in BIG
demand
Right now, one of the biggest collector fads is Chinese pottery pieces. And I’m not talking Ming vases.
So if you can find an exquisite Chinese artefact (like the Chinese tile pictured left) – don’t overlook it.
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How to make BIG money from beautiful things
Clocks: An investment that stands the test of time
Over the years, British and Continental clocks have maintained their value and continued to rise in
price. The most popular types of clocks on the market are French timepieces that date back to the 18th
and 19th Century. And when it comes to clocks of calibre, you’re choices are endless.
To decide on what you want, consider where you’d like to display the piece. Do you want a mantel- or a
freestanding piece? For your mantelpiece, you could invest in a plain carriage clock or a decorative
ormolu clock (a fire-gilded, gold plated highly ornate clock renowned for its superb craftsmanship.) For
an on-the-wall clock, hang either an elegant Viennese regulator clock or an elaborate Louis XV rococo
cartel clock.
But why are French pieces so sort after? Well, it all comes down to their exquisite craftsmanship. The
casework of French clocks are far more elaborate than, say, English ones. They’re works of art,
designed by master sculptors and artists. For example, during Louis XIV’s reign (between 1643 and
1715), table and bracket clocks were all the rage. They tended to be quite rectangular and had wooden
carcasses veneered with tortoiseshell, brass and gold. The style changed as his reign came to an end,
but the pieces were just as elaborate.
These days, the price of an antique clock can range anywhere between R14,000 and R750,000.
But what does antique investing really entail?
Remember, buying and investing in antiques can be a tricky business. We all associate “antiques” with
“big bucks” and this often scares novice collectors off. But it’s important to keep in mind that there are
antiques and then there are antiques – some are very affordable, while others can be extremely pricey
– and there can be good reasons for this.
As the owner of Bancroft in Village Walk in Sandown, Paul Mrkusic deals in all kinds of quirky antique
and vintage treasures, including Art Deco furniture, 20th Century South African art, jewellery and silver.
And it’s helped him build up an incredible knowledge of antiques and vintage items over the years.
Collecting antiques can be a very rewarding hobby, but there are some important points to always keep
in mind before making any purchase. And that’s why Paul developed the ten commandments of buying
antiques. They’ve worked well for his clientele in the past. And today, I’m going to share them with
you…
The ten commandments of antique investing
1. Stick to quality:
The most important aspect is quality: Never compromise on this. The value of an item lies in its
longevity. If it’s not well made, it’s unlikely to stand the test of time. Always look at the condition.
2. Don’t destroy the integrity of the piece:
Also make sure the piece hasn’t been over-restored or this could ruin the integrity of the item. Certain
restoration is often necessary, but since an antique is old and, while it should look good, it should still
show signs of age.
3. It’s all about being unique:
The fewer there are of them, the harder it is to satisfy the demand and so the value increases.
4. Buy the best you can afford:
I’ve said this before, but it’s worth repeating: When buying a piece, make sure it’s the best example of
its kind. If, for example, you stumble on a piece of Clarice Cliff porcelain in a junk shop for R10, it may
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How to make BIG money from beautiful things
not be worth more than that. Only pieces of Art Deco Clarice Cliff are worth a lot of money. The more
rare the design, the greater its worth.
5. Go into this thinking it won’t be cheap
Be prepared to invest. Antiques and vintage items are valuable. Dealers and collectors know this, so
there’s a high demand for good quality pieces. This means, you’ll have to be prepared to make a large
initial investment.
6. Be informed
It’s not always obvious why certain pieces are worth a lot of money and are more sought after.
Research your interest areas as best you can.
7. Follow the experts:
If you’re just starting and don’t know a lot, make friends with a dealer. Most of them aren’t there to
become millionaires and are only too happy to share their passion and knowledge with you.
8. Catch the trend:
Study emerging trends and catch them in the beginning before prices soar. Again, befriending a dealer
is a good idea, because he/she can feed you timely trend information that you can use to get in early.
9. Like it:
Buy what you like! And like what you buy. If you don’t like the thing you’re buying or if it doesn’t
appeal to you in any way, don’t buy it – no matter what anyone else says. If you think it’s ugly,
chances are so does everyone else and they’re just too afraid to admit it!
10. Be prepared to wait
The value of antique items doesn’t usually bounce up and down in the same way the stock market
does. Instead, value increases slowly over time and it can take up to ten years before you see a real
return on your financial investment. In the meantime, unlike your shares and bonds, you can sit back
and enjoy them!
Keep your eyes peeled for the following investment pieces:
Although European antiques dominate the market, there is huge demand for Cape furniture and rare
yellowwood and sneezewood pieces made in Natal during the 19th Century. And when it comes to
metals, look for copper, brass and silver pieces produced in the Cape silversmiths and metal workers.
Worth taking a look:
www.boho.co.za
www.finderskeeperssa.co.za
www.sothebys.co.za
On this site, you’ll find affordable collectible
paraphernalia like antique furniture, silver, etc.
A great online website to find the latest trends
for antique furniture.
A great auction site to help you determine the value
of your piece.
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How to make BIG money from beautiful things
Chapter 8
Investing in stamps:
This opportunity gets my “stamp” of approval
If you’ve watched your portfolio shrink to the size of a postage stamp in the last few months, perhaps
it’s time to invest in the real thing.
Stamp collecting (or philately) is known as the “the hobby of kings and the king of hobbies”. Why?
Because there are more than 50 million people in the world that collect them – 18% of whom live in
China. But that’s not the only reason. It’s also the hobby of the upper class and royalty. Today, Queen
Elizabeth II has the most extensive British stamp collection in the world. It’s such a lucrative hobby,
that the rare stamp market is worth around $10 billion a year.
Rare stamps: A tangible asset worth more in weight than any other commodity
Astute investors, who’ve uncovered this little secret, have been quietly seeing large returns on their
investments. Over the past 50 years, the annual return on this alternative investment has been 10%.
In stamp collection there are no rules. Each collector decides for
his/herself what he/she enjoys most and then collects it. You can be a
thematic collector (collecting only war themed stamps for example) or a
traditional collector (where you’d collect both used and unused stamps).
Yes, it’s true that mint stamps (those that haven’t been used) tend to
be more valuable, but it all depends on the rarity of the item. In this
case, used stamps tend to be worth much more. For example, The Bible
stamps, issued but the South African Post Office in 1987 are more
valuable because the Post Office withdrew them in the year they were
printed. Only a few were sold and that means these “used” stamps are
more expensive because of the scarcity. The stamp – worth only 40c in
1987 – is now worth R6,000 for a single cancelled version.
Stamp investing is a
lucrative – barely tapped –
way to profit.
Three factors determine a stamp’s value
There are three things that determine a stamps real value: Rarity, quality and demand. Of these, the
most important (by far) is demand. But it’s fair to say that rare stamps of the finest quality are always
likely to be in demand.
To invest in the very best, there are three rules you must follow.
First and foremost, you should always invest in quality – not bargains. Stamps in premium condition –
particularly if both scarce and popular – are markedly more resistant to recession and you can sell them
quickly at any time. Remember, you’ll always be able to find a buyer for top quality material.
Second, you must have either first-hand knowledge or advice from a well informed dealer or investment
counsellor about the relative scarcity of the issue and the marketplace’s demand for it. This includes
information about which stamps are suitable for investment and which are strictly for collectors because
they have little prospect of major appreciation.
And finally, you must learn how to keep stamps over long periods to prevent deterioration, damage and
theft.
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How to make BIG money from beautiful things
How to store your investment
Stamps are very delicate and you have to ensure they’re well looked after for them to be worth any real
money. If you don’t, they’ll warp, fade and even rust. So let’s look at a few tips for keeping your
collection in mint condition:
•
•
•
•
Store stamps in a room where the temperature is below 18 C and the humidity is between 55% and
60%. This will help ensure the gummed area doesn’t grow mould or become brittle.
Store stamps in an acid-free album with plastic sleeves or pockets.
Limit the amount of UV radiation a stamp is exposed to. Stamps are best kept in complete darkness.
Don’t pick up a stamp with your bare hands. Sweat is acidic. If you constantly touch your stamps,
you’ll find that over time they’ll develop brown spots where your fingers touched them. So wear
gloves and handle your collection with tweezers whenever possible.
Handy tip:
Unlike other portfolios where you must frequently review and rebalance your
portfolio, stamp collecting is different. You can safely tuck them away in a
safety deposit box for years – without a second thought – because they
appreciate almost automatically.
Does a stamp make the grade?
Nothing is more important to an investor than a stamp’s grading and condition. Knowing how to eyeball a stamp’s grade and condition is something you must learn to be able to play the game. A practiced
eye will save you both time and money.
A grade is all about centering, cancels and gum. It describes how well the stamp’s design is centred
between the perforations – both horizontally and vertically – the condition of the gum for mint stamps
or the effect of the cancellation on used stamps. Like exam scores, stamps are graded from “superb”
(for a perfect in every respect stamp) all the way to “poor”. The condition of a stamp, on the other
hand, describes the physical appearance of the stamp’s paper, ink and gum.
Here’s what the gradings mean:
•
•
•
•
•
"SUPERB" - A term used very sparingly to describe a 19th Century stamp of unusual brilliance
and over-all condition. This should never be used to describe a modern stamp and should only
be used to describe a stamp which is of outstanding condition.
"VERY FINE" - Used to describe both 19th and 20th Century stamps when the condition is above
the average. Such a stamp may be expected to be out of the ordinary.
"FINE" - Used to describe both 19th and 20th Century stamps that are in all respects "up to par."
"FAIR" - Used to describe both 19th and 20th Century stamps that are neither "fine" nor actually
poor.
"POOR" - Stamps that are damaged, heavily cancelled, or "shop worn." Only otherwise very
valuable stamps would be offered at auction in "poor" condition. Collectors sometimes use them
as "space fillers" – to fill a space in their albums until a better copy may be secured.
Valuable imperfections: What should you look for in a stamp
Unlike art collections, which look for the “best example or a history”, a stamp investor should look for
an imperfection that stems from some sort of mistake. Why? Incorrect stamps are far more rare and
that makes them highly collectible. The value of such rarities have risen for years and this is what
makes one stamp far more valuable than another.
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How to make BIG money from beautiful things
Look out for the following three types of valuable mistakes and imperfections – although do note that
there’s a pecking order (some mistakes are more valuable than others…).
•
•
•
Artist drawing sketch error: Look for stamps with a mistake in the details of the picture.
Famous examples include an upside down Union Jack and the Red Cross Centenary stamp –
which was printed without the red cross.
Printing error: This happens when the print run goes through twice and there are two
impressions made on a single stamp. The further the distance between the two impressions,
the more valuable the stamp is.
Inverted pictures: These are highly valuable. This error used to happen in the Victorian era
when the frame of a sheet of stamps was passed through the wrong end before the centre
was printed. The result: A sheet of stamps with an inverted centre.
Highly valuable stamps :
Rarity and uniqueness are two of the most important elements to look for when investing in stamps.
Remember, if a stamp’s earned a place in the history books, it’s bound to be a good buy. For example,
the Penny Black. As the world’s first official adhesive postage stamp, it’s highly sought after by
collectors and investors alike. Although as many as 68 million stamps were issued back in May 1840,
there are an estimate 1.5 million still around today.
And then there’s the Cape Triangular – SA’s first stamp issued in 1853 – famous for being the world’s
first triangular stamp. It so famous, that the stamp has been commemorated numerous times starting
in 1926. And even as recent as 2003, where it was redrawn to commemorate the 150th anniversary of
the original stamp.
Postage and revenue stamps are important (and valuable) parts of philately –especially stamps that
were issued at the turn of the century. Also look out for sets of South Africa’s first self-adhesive stamps
issued in 1998. This set of five stamps – featuring SA antelopes – has gained huge investment potential
over the years.
Naturally, stamps featuring historical figures and events also have huge appeal in this market. So keep
your eyes out for the stamps representing:
•
•
•
•
The
The
The
The
500th anniversary of the discovery of the Cape (issued in 1988),
300th anniversary of the arrival of the Franc Huguenots
150th anniversary of the Great Trek,
inauguration of former President Nelson Mandela in 1994.
Many of our mentors, scientists, writers and other prominent South Africans have earned their place of
honour in the philatelic environment. Look out for stamps that feature:
•
•
•
•
•
•
•
SA’s Nobel Laureates
Dr Chris Barnard
Emily Hobhouse (British campaigner of the Anglo-Boer War concentration camps)
Nelson Mandela
Enoch Sontonga (composer of our national anthem)
Mahatma Gandhi
And Mark Shuttleworth
And also keep your eyes peeled for stamps that will commemorate the South African FIFA world cup
this year – they’re bound to increase in value with sports enthusiasts in the next few years.
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How to make BIG money from beautiful things
Worth taking a look:
www.mrthematic.co.za
www.stampdealers.co.za
An online stamp shop here in South Africa.
The official website of the South African Philatelic
Association.
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How to make BIG money from beautiful things
Chapter 9
Investing in books:
Read between the lines for a great investment
Are you a bookworm? Well, you can turn that love of literature into a healthy investment. That is, if you
know how to look after your novels correctly and what to look for.
There’s big money in hardback 1st editions
In 2008, the BBC reported that an inscribed first edition of Jane Austen’s epic novel Emma fetched a
whopping ₤180,000 (about R1.99 million in today’s terms) at a London auction. That’s a new world
record auction price for a printed book by Austen.
Why so much? Well not only was the book inscribed by Austen herself and a first edition, but the book
was also kept in pristine condition. A slightly soiled version of the same book would go for around
R356,000.
As you can see, certain factors play a HUGE part in how lucrative a book can really be.
Rule #1: Don’t judge a book by its cover
But what makes one book more lucrative than its peer?
Well, a lot of things – including the original dust jacket, how well it’s
been looked after and how dirty it is between the covers.
And, naturally, first editions are by far the best investments.
To spot a first edition work, turn to the books copyright page. Phrases
such as “new edition” and “this edition” are meaningless. Instead, look
out for “first published” and “first printed” dates.
The more rare and well
looked after, the more your
book collection will be
Authors on the brink of success are the some of best buys
By the time a novelist’s become famous their novels become less
collectible thanks to their huge print runs, like Danielle Steel, John
Grisham and Wilbur Smith.
And, having avid fans boosts the value of even the more rare editions because of their unique cache.
The most valuable first edition of the 20th Century – and one of the hardest to read – is the
monumental Ulysses by James Joyce. You can expect to shell out at least £150,000 (R1.67 million) if
you want to own one of the signed first 100 copies ever printed in 1922.
The movie industry also has a huge impact on book investment values. A 1930 first edition of the hardboiled detective novel The Maltese Falcon by Dashiell Hammet, with original dust jacket, can cost in the
region of £50,000 (R555,000). This is largely thanks to the film noir appeal of the classic movie starring
screen legend Humphrey Bogart.
Another film-fuelled example is books by James Bond creator, Ian Fleming. The secret agent made his
first outing in a 1953 first edition of Casino Royals, which now has a licence to thrill investors at an
explosive £20,000 (R222,000).
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How to make BIG money from beautiful things
The most recent example is Harry Potter. In 1997, you could have picked up one of the first 500 signed
hardback copies of JK Rowling’s Harry Potter and the Philosopher’s Stone for a mere £10.99. The same
book fetched a wizard £27,370 at a Bloomsbury Auction in London a couple of years ago. Having an
author’s signature can have a huge impact on any book value – an unsigned edition of the same Potter
book recently fetched a mere £7,200 at auction. But investors must be wary that forgeries abound so it
may be worth getting an expert eye to verify authenticity before handing over any cash.
The classics are always a winner
Classical literature never goes out of fashion. A first edition of Emily Brontë’s Wuthering Heights,
printed in 1847, went under the hammer at a Bonhams auction in London last November for £114,000
(that’s a massive R1.27 million). While in March 2008, an inscribed first edition copy of acclaimed South
African author JRR Tolkien’s The Hobbit sold for a world record-breaking £60,000 (R666,000).
Sleuths might also like to track down the “mistress of who-dunnits?” Agatha Christie. Her first Poirot
novel The Mysterious Affair at Styles, published in 1921, is worth up to £20,000 (R222,000).
First editions of Ian Fleming's books are another popular collectible, fetching around £25,000 (R). The
key to value when it comes to books is condition. Pristine copies complete with dust jackets and an
author signature fetch the most at auction. A copy of Moonraker given by Fleming to the US
ornithologist James Bond, containing the inscription “To the real James Bond from the thief of his
identity”, is considered the most celebrated inscribed copy, with an estimated value of £50,000 (R). But
Fleming's books are so popular that even second editions are collectibles. For example, a second edition
of Live and Let Die is worth around £500 (R).
As a rule of thumb, it’s best to buy the highest quality you can afford
Although the Internet’s transformed the market by pushing down prices through sites like
www.abebooks.co.uk, it’s also taken the fun out of rummaging through second-hand stores. There’s
still no substitute for rummaging through dusty old shelved and feeling the quality of the book in your
hands before handing over the cash.
Specialist auction houses, such as Bonhams and Sotheby’s, enable you to take advantage of private
viewings beforehand and pick the auctioneers brains.
Handy hint:
For those on a budget, or those who aren’t sure where to begin, a classic orange
Penguin book might be a good place to start. These iconic editions ran from the
mid-Thirties to the late Fifties. The first run was of Ariel by Andre Maurois in 1935
and copies are now worth £60 (R666).
Books with a local flavour are good investment opportunities:
Books by renowned SA authors Alan Paton and noble prizewinner Nadine Gordimer are among those
eagerly sought. As are those on the Zulu or Boer Wars and those on early hunters, explorers and tribes
in southern Africa.
In fact, you could be in for a windfall if you own any early books on African folklore, languages (printed
before 1900), art work and tribes, as well as anything published before 1940 on the Zulu language,
people and war. In August 2008, a first edition, illustrated copy of the 1907 South African classic Jock
of the Bushveld by Sir Percy Fitzpatrick sold for an unbelievable R39,200.
It just goes to show you, bookworms can turn a love of literature into a healthy investment if they
know how to look after their novels
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How to make BIG money from beautiful things
Worth taking a look:
www.abebooks.co.uk
www.selectbooks.co.za
www.sothebys.co.za
An online second hand book store specialising in rare,
collectible books.
This book dealer specialising in scarce and out of print books
relating to Southern Africa.
This auction house also offers great book deals for auctions.
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How to make BIG money from beautiful things
Chapter 10
Investing in wine:
Raise a glass to real “liquid” investments
Just like with shares, the wine market’s full of losers as well as winners. But in recent years those
who’ve put their money into the very best fine wines have savoured better returns than more sobering
punts made elsewhere.
And best of all, if you uncork a failure, you can still drown your sorrows in style.
In the past few years, investing in wine has become increasingly popular here in South Africa.
According to wine market tracker Liv-ex
(pictured right), the index for the top 100
investment wines, the index has seen prices
more than double in almost five years.
However, to temper these celebrations, the
Liv-ex Index has shown a more modest
growth of 4.5% for the last 12 months. The
value of the index as of 31st December 2009
was 237.17, a rise of 0.9% on the previous
month. The index climbed 15.7% in 2009.
Despite this, fine wine has many advantages
over other forms of investment – it not only
benefits from being low-risk and tax-free but
is also one of the steadiest forms of
investment. It’s relatively unaffected by
recession, interest rates and stock market fluctuations.
But investing in any old plonk isn’t going to secure you profits. You need to buy a proven vintage wine
French winners, New World losers
The Premier Bordeaux wines of France have historically been the driving forces of the investment
market with top Clarets the benchmark for wine values. The biggest guns are the five first growths –
known as the Premier Crus – of Haut Brion, Lafite, Latour, Margaux and Mouton. Other blue-chip names
that enjoy an exalted status include Cheval Blanc, Ausone and Petrus. Of course, having a great name
isn’t all you need to make the investment grade. The vintage is paramount, with weather conditions
dictating how good the wines will turn out to be. 1982, 1989, 1990, 1995, 1996, 2000, 2003 and 2005
have been the most sought after years.
One of the biggest success stories of recent years is Petrus. Investors who snapped up a crate of 1982
Chateau Petrus in 1983 for £300 (around R3,573) are now sitting on an investment worth £32,000
(that’s R381,120) if they haven’t sold any bottles.
Justin Gibbs, a Director at Liv-ex, believes shrewd investor should also take a look at the next tier of
top quality wines. These include the so-called “super seconds” of Pichon Lalande, Leoville-Las-Cases,
Cos d’Estournel, Lafleur, Montrose, Leoville-Barton, Palmer and Lynch-Bages.
At the highest quality level, France also offers red and white Burgundy, Rhone, Alsace and champagnes
that have produced winners over time – and are worth a punt.
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How to make BIG money from beautiful things
However, the top New World wines (from Australia and America) rarely succeed as investments. Even
though some producers in Australia and California attract attention, historical pedigree and snob appeal
means even it these wine tick all the boxes for the pallet, probably won’t turn out to be a good
investment.
But the Liv-ex 500 Fine Wine Index, which has managed to outperform its more elitist 100 Fine Wine
Index rival over the past 12 months, shows increased interest in New World wines. This expansive
index grew by 13.7% to the year ending September 2009 and only fell 0.3% in value over the final
three months.
Gibbs explains:
“The wine market is bound to feel the effects of the credit crunch in some way – but hopefully the
impact will be relatively muted as there will always be a demand to drink fine wine. The more recent
the wines you’re buying, the more potential you have for selling them. If the wines aren’t so expensive,
but still of a high quality, then this can also broaden appeal. It’s hard to predict the impact of a
recession but it’s likely people feeling the pinch will still be willing to crack open a bottle of wine for
R150 but more wary of spending R1,500 for the pleasure.”
But he believes the downturn in the market can also play into the hands of potential
investors as pressure to spend money eases – you can take time picking and choosing
and may even be able to wait until prices drop.
The art of studying wine is notoriously difficult and you should seek expert guidance.
But don’t worry that’s what I’ve done in this report. You see, lading wine merchants
have a small army of connoisseurs who visit the vineyards seeking out potential
winners for the future and I’ve asked them to tell us what wines we should be
considering investing in.
Get to know your wines
The highly influential American wine connoisseur Robert Parker who calls the biggest shots when it
comes to turning great wine into an investment. Parker made a name for himself in 1982 when he
called a great vintage against the odds. Since then, he’s become the man to follow.
Parker marks everything he sips out of 100. Anything over 96 is classed “an extraordinary wine” and
turns a fine wine into a superb investment. However, if you want to hit the jackpot then it’s necessary
to pre-empt Parker’s views before they’re published.
The American publication Wine Advocate magazine also has a huge impact on whether a fine glass of
wine is just a great drink or a superb investment – and, guess what, this just happens to include
consumer advice from Parker. So always consider his opinion before investing in this sector.
A rise in wine consumption bodes well for your investment
A rise in wine consumption means demand across the entire market is growing. New super-wealthy
buyers from Russia and China have helped to push up prices to record levels at the top end of the
market.
Although most wines are made to be drunk within a few years if you buy the best – particularly if in big
magnum or double magnum bottles – there’s no reason why your investment shouldn’t last 40 years or
more.
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How to make BIG money from beautiful things
Store top wines for at least ten years as an investment opportunity to smooth out any bumps that may
occur in the market.
Remember, wine prices can go down as well as up…
Alex Marton, director of fine wines at Bibendum in the UK says:
“You must go into the wine market with your eyes open and realise that, just like other investments,
value can go down as well as up. But from what we have seen in recent months there has been some
softening in the market rather than the dramatic movements we’ve seen with stocks and shares. This is
not just because of maintained demand but also because people aren’t leveraged in wines but are
spending money they already have.”
Marton believes top end wines are still the best investment bets. Get a foothold in the market with
more recent vintages of “super seconds” as well as the Premier Crus. They can be good value for
money.
Look after your asset
Storage of wine is paramount since this is what determines its quality, price and saleability. One of the
best cellars in the country is The Wine Cellar in Cape Town. It specialises in the acquisition, provision
and care of fine wines from all over the world. The establishment hosts regular wine tasting events in
Cape Town and Johannesburg where you can taste top class wines and find out more about them. Many
of these wines are also available for purchase on their website (www.winecellar.co.za). You can find
out more about the storage facilities they offer from this site too.
The key lesson for wine lovers is this: Don’t get too sentimental about their purchases. Recognise them
as a commodity for investment purposes, rather than a drink to enjoy.
And be warned: Just because you think it’s a great tasting wine, doesn’t mean others will love it too.
Don’t confuse the wine enjoyed at home with your feet up with an asset locked away collecting dust.
Finally, it’s worth remembering that buying a fine vintage is far easier than selling it. The typical option
is to sell it back to the merchant but they’ll want to take a cut themselves, which could be as much as
10% of the market value. To get around this turn to online auctions to find buyers.
Top investment wines in the world…
So which wines should you be focusing on for your investment portfolio? One simple (and effective) way
to do this is to consider which wines are most traded on the Liv-Ex Fine Wine exchange.
What brands are you looking at? Well, naturally Bordeaux region wines come out on top, as do Premier
Crus.
Here are the top ten investment wine estates of the index’s list:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Chateau Lafit-Rothschild (Vintage: 1986 and 1996)
Chateau Latour (Vintage: 1996)
Chateau Margaux (Vintage: 1986 and 1996)
Chateau Mouton Rothschild (Vintage: 1986 and 1996)
Chateau Haut-Brion (Vintage: 1982)
Carraudes de Lafite (Vintage: 1986 and 1996)
Chateau Petrus
Chateau Cheval Blanc
Chateau La Mission Haut-Brion (Vintage: 1982)
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How to make BIG money from beautiful things
10. Domaine de la Romanee-Conti
And, since South Africa is an esteem wine making region, it’s a great idea to look closer to home for
investment wines. The best place to start, is looking through the annual Platter’s guide. If the wine has
achieved a 5-start rating, it’s more likely to be highly sought after in ten years time. .
SA wines you should consider adding to your wine collection are the Vilafonte Series C 2006, The
George Spies Cabernet Sauvignon and the Morgenster 2005. Also look at older vintages of Kanonkop
Paul Sauer, Meerlust Rubicon and Boeknhoustkloof Syrah.
Handy tip:
If wine isn’t your drink of choice, why not consider investing in the lucrative
– and highly enjoyable – world of Scotch and Whiskey. The rules of the game
are similar and nothing ends a hard day’s work like a good ol’ Single Malt.
Worth taking a look:
www.liv-ex.com
www.winecellar.co.za
The official website of the Fine Wine Exchange.
A fine wine broker and cellar based in Cape Town that
deals in wines online and hosts regular tastings.
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How to make BIG money from beautiful things
Chapter 11
Investing in cigars:
A smoking alternative
Sit back, relax and enjoy the pleasure of a great investment. Investors in hand-rolled Cuban cigars
typically like to sample the goods as part of their moneymaking research. Why? Because then you can
purchase two identical boxes of merchandise – one for smoking at leisure, the other to lay down and
sell at a profit later.
For cigar aficionados there’s really no substitute for the best Cuban Havanas, also known as Habanos.
This is because Cuba’s the only place on earth where you’ll find the ideal combination of sun, soil and
skill to create the perfect cigar. The soil around the Pinar Del Rio region in western Cuba is particularly
rich in minerals and perfect for tobacco growing. The climate isn’t only ideal for nurturing the plants but
for curing the leaves as well, which can take up to two years.
While it’s a myth that cigars are rolled on the inside of a maiden’s thighs, it’s true skilled women pile
leaves on their laps when sorting out the best tobacco leaves. The cured leaves are later handled by
Torcedores – expert cigar-rollers – who, as they’ve done for more than 140 years, skilfully work away
in special La Galera workshops, while comrades read them stories from books or the newspaper.
The trick is to sample many brands to find the one that’s right for you
The most attractive cigar investments tend to be limited editions because of their relatively small
supply. One of the best recent bets – as well as greatest smokes – have been the labels of Davidoff and
Dunhill, who quit the Cuban market in 1992 and are therefore particularly rare.
But take note, these limited editions are often produced for specific countries
and aren’t widely available.
Keeping you investment in mint condition isn’t difficult
You can purchase cigars in boxes of 25 or cabinets of 50 and store them in
humidors to keep them from drying out and losing their flavour. Small desktop
humidors go for as little as R650 and can be bought at all cigar retailers.
Cuban cigars are
the most famous
investment in this
market
Alternatively, specialist merchants can look after them in more controlled
environments. And they’ll do it for free.
And keep you cigars at 180°C and 67% humidity to reflect the Cuban climate.
Remember, cigars enjoy a shelf life of 50 years, sometimes even longer if well looked after. They also
tend to mellow with age, which, in some cases, adds subtle complexity to the smoke – similar to laying
down a vintage wine.
There are such a wide variety of complex flavours available, it’s hard to know where to start. Rich and
spicy tastes might be found in the Bolivar, while an earth flavour can be discovered in Partagas. Other
flavours offered by different cigar producers include grassy, vegetal, cocoa and coffee.
But this is just a hint of the kaleidoscope of deep flavours and sensations that can swirl around the
mouth and palate. There’s also the bouquet when the box is opened, aroma from the cut, smoke and
draw from cigar construction. The sheer aesthetic pleasure is something to consider. And while the
colour doesn’t generally affect the flavour of the cigar, it’s a vital part of the experience.
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How to make BIG money from beautiful things
Investment returns have increased 50% in five years
Despite the public smoking ban implemented in some countries, the change to the cigar market has
been minimal. Traders report little or no change in demand.
Investors who’ve picked wisely in the past have typically seen the value of their Havanas rise by about
50% over five years.
Size really does matter for the cigar connoisseur
The Cuban term for cigar size is “vitola”. Each brand has its own characteristic style of flavour, but
different vitolas vary the taste. Bigger cigars offer rich, but cooler, smokes, while fat cigars tend to burn
more slowly and provide a fuller flavour. The biggest size is the Gran Corona, which is 91⁄4 inches long
and has a cigar ring gauge of 47.
Other sizes include the popular and highly collectible short, but thick, Robusto – 47⁄8 of an inch long
with a 50 ring gauge. If you want something a little less flashy consider a Petit Corona – also known as
The Mareva – at a modest five inches in length and 42 ring gauge. Winston Churchill smoked about
300,000 Romeo y Julieta cigars in his life. As a mark of respect, his favourite sized cigar, the Julieta
No.2, is commonly known as the Churchill.
An investment like this takes time to enjoy…
Another key reason why Cuban cigars are such an attractive investment is it’s an experience not to be
rushed – it forces the high-flying, busy businessman or woman to slow down and relax. Remember, to
be able to invest in a cigar, you need to have sampled it so you can sell the taste and experience of the
cigar to your prospective buyer. Because of this, you need to consider the following elements of cigar
smoking.
Small cigars may last 20 minutes, but longer ones can last an hour or more. Before kicking off your
shoes and lying back in the chair, a cigar enthusiast and investor should spend money on a few other
essentials. A cigar cutter or scissors are essential. It’s a schoolboy error to bite the head off, like a Clint
Eastwood tough guy, as the ideal draw comes from a clean cut a 1⁄8 of an inch from the head of the
cigar. Take your time and do a thorough lighting job – nothing ruins the pleasure of a Havana faster
than a thin smoke drawn when you’ve lit it badly. Then slowly sip at the cigar to enjoy the pleasure,
rather than gulp or – the worst cardinal sin of all – inhale.
There’s also the drink to consider. Coffee complements a morning puff, but the ideal tipple is a glass of
sparkling champagne to cleanse the pallet. After your evening meal, a tumbler of single malt or cognac
also goes well with a top cigar. An accompanying glass of Cuban rum will provide the most authentic
experience.
It’s vitally important to seek expert guidance and share the experience with others rather than to dash
out and buy the most expensive box. This is especially important if considering a purchase on the
Internet, which is a market place littered with forgeries. As with many investments, there’s no use
getting involved unless you enjoy the experience as well and it’s advisable to pick the best investment
grade cigars that you’d enjoy puffing on yourself – it also helps just in case the market goes up in
smoke.
Get your hands on these smoking investments
There are 33 separate Havana brands offering more than 240 different cigars, with plenty of names to
capture your attention. Classic Cuban labels, such as Partagas, Cohiba, Ramon Allones and Bolivar,
never go out of favour. Novice cigar smokers, on the other hand, might be tempted by more mellow
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How to make BIG money from beautiful things
offerings from other great names, such as Romeo Y Julieta or Montecristo. The latter boasts the bestselling cigar in the world with a Petit Corona sized “No.4” selling for just R107 – a great place to start.
Worth taking a look:
www.wesleys.co.za
This site is a great source of cigar information and provides
you with a platform where you can buy cigars online.
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How to make BIG money from beautiful things
Chapter 12
Memorabilia:
As long as there’s a buyer, you can collect just about anything!
Before I go into the nitty-gritty of memorabilia I want to tell you a story of an 89 year old American
man’s baseball card collection. In 2007, he put a portion of his massive baseball card collection up for
auction. Back when he began collecting them as a child, a card cost a penny a price. When he sold
them, the collection raised $1.6 million. My point, if you can find a buyer, you can collect just about
anything.
Remember, one man’s junk is another’s treasure trove. So let’s look at some quick tips about other
types of collectibles you may be considering:
• Comic books
Comics have been popular collectibles since the 1970s, when nostalgic adults started hunting for their
favourite issues from childhood. The rarity of old comics (thanks to problems with storage and many
being thrown out by mothers on spring-cleaning missions) means early issues have become incredibly
valuable.
The most expensive comic in the world is the first issue of Action Comics, a US comic published in June
1938. It contains the first appearance of Superman and is worth around R11.91 million – Nicolas Cage
is believed to own a copy.
• Action figures, dolls and teddy bears
Ever since George Lucas had the idea to market toys and action figures around Star Wars in 1977,
collecting action figures has become a lucrative hobby. The trick is to find those toys that are “short
packed” or ones that they make very few of – these are known as “chase figures”.
Antique and vintage dolls are popular with collectors too. Even when dollar value may not mean much,
the nostalgia value can be priceless.
The most important part of a doll or teddy bear collection is to find a balance between those that are
enjoyable to look at and ones that are worth a good deal of money (or are likely to appreciate in value).
Gene dolls, Robert Tonner dolls, Ginny dolls and Madame Alexander dolls, for example, are good places
to start when looking for collectible dolls.
• Movie memorabilia
Bond memorabilia is the most sought-after film merchandise on the market. "From original costumes to
posters, books and even Dinky cars, virtually anything related to the 007 franchise has seen its value
rise over the years," says John Greenwood in The Sunday Telegraph. The most expensive example of
Bond memorabilia is the 1965 Aston Martin DB5 that appeared in Goldfinger – that sold for £1.1 million
(around R13 billion) at auction in 2006. Costumes are also equally sought after – a simple pair of brown
shoes worn by Pierce Brosnan in Goldeneye sold for around R11,910 last year. So the current owner of
Daniel Craig's blue swimming trunks is sitting on a gold mine.
The value of items depends on the Bond film. “When it comes to the value that the actor adds to
collectibles, Connery is of course king, followed by Roger Moore and then Daniel Craig,” says Neil
Palmer, manager of The Cinema Store, in The Sunday Telegraph. “Pierce Brosnan, Timothy Dalton and
George Lazenby all come in a fairly equal fourth.”
The cheapest route into a Bond collection is probably through posters. Original Casino Royale posters
are already selling for under R600, just two years after the film came out. Posters from the Connery
films can sell for up to R71,460.
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How to make BIG money from beautiful things
Worth taking a look:
www.thebearcollector.com
www.toy-tma.com
www.uacc.org
For tips on how to collect rare teddy bears.
A toy website that’ll help you determine whether or
not old toys, dolls and bears are a good investment.
The universal autograph collectors club – here you
can authenticate and buy your celebrity autographs
and signed memorabilia.
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How to make BIG money from beautiful things
Chapter 13
About your author:
Karin Iten is the Personal Finance contributor in MoneyWeek and provides weekly advice to readers
from SA’s top investment analysts on where they should put their money now.
On a daily basis, she talks to the likes of David Shapiro (portfolio manager of Sasfin Securities), Chris
Hart (chief economist at Investment Solutions), Lavan Gopaul and other renowned SA investment
experts.
And her contacts don’t stop there.
She also works alongside Leon Kok, Chairman of the South African Investor and edits Red Hot Penny
Shares for Greg Lecoq. This gives her access to an exclusive network of analysts who have their fingers
on the pulse of all things finance.
She also writes the bi-weekly, free email service Investment Academy.
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