...between 1997 and 2008 doing absolutely NOTHING!"
The collectibles market provides an alternative investment and an alternative to losing your money in the current economic climate
Dear Reader,
First off, I am glad to speak to you today about something positive.
I don't know about you, but I am weary from the constant barrage of bad news in the press and on the TV every day...
House prices set to crash by 40%, millions will be made unemployed, inflation to soar, etc, etc.
Whilst in the world of collectibles, autograph prices continue to rise quite nicely thank you despite all this bad news.
Rare autographs beat the economic blues
The Fraser's 100 autograph index listed on Bloomberg updated to 30 April 2008 shows a compound increase over the past 11 years of 280%.
This equates to an average annual compound return of 12.9% over an eleven year period.
Over the past year, whilst most other asset classes have fallen in value, the index increased by 6.5% or double inflation.
This is a remarkable achievement in the current economic climate and proves that the passion of collectors remains strong through difficult times.
This passion is what underpins the non-correlating qualities of investing in autographs.
Yet despite the strong growth in prices of autographs over the past 11 years, I think autographs represent one of the few remaining cheap asset classes available.
When I say "cheap", I don't mean that in the "cheap and nasty" way...
I mean "cheap" in the "under-valued" way... at a discount to real worth.
Before I explain myself further, let's look at the numbers in some more detail.
The Fraser's 100 Autograph Index
You can view the full components of the index by following the link below:
Fraser's Rarities Index
54 items within the index increased in value over the past year. 34 of those increased by more than 10%.
Some of our current investors will be pleased to have taken our past recommendations...
For example, Neil Armstrong's signature is up 22% in the year and James Dean's signature is worth 27% more than it was a year ago.
Over the past 11 years, the price of a Beatles signed photo is up from £4,950 in 1997 to £24,500 in 2008, an increase of 395%.
The idea of the Fraser's 100 Autograph index was to provide a shopping basket representative of the autograph market as a whole. As you would expect the shopping basket contains many signatures which do not possess the investment attributes we look for and recommend to our clients.
But I am sure Johnny Depp will be pleased to see that he is worth 30% more than he was a year ago. He is probably most renowned for his exceptional method acting as Captain Jack in the "Pirates of the Caribbean" films.
Those films probably raised his profile giving him the recognition he deserves as one of the most versatile actors of recent times.
Johnny Depp has overtaken Brad Pitt as our top selling male personality in our shop at 399 Strand, London.
It's well worth a visit to our autograph gallery at 399 Strand if you happen to be passing. We have over 60,000 autographs in stock. Very few people leave without finding something of interest, such is the diversity of our stock range.
The chart below shows the performance of the Fraser's 100 autograph index compared to other popular investment classes over the 10 year period from 1 May 1998 to 30 April 2008:
Only rare stamps from Great Britain have topped the performance of the autograph market in the past 10 years.
What we are seeing now though is the real benefits of diversification. This is because the long bull market in equities and property appears to have come to an end...
This is when the benefits of investing in collectibles becomes more visible as our growth curve relentlessly progresses upwards waving to all the other asset classes on the way down.
Gold on first glance seems to offer similar characteristics but there is an inverse correlation between gold and other asset classes.
Collectibles have no correlation with other asset classes. That is the distinction. Investors buy gold to make a profit then drop it like a stone (but a bit heavier) when other asset classes look to give better opportunities.
Collectors buy items they cherish then won't let go. New collectors come along and can't find what they want because other collectors are holding onto them.
When an item appears on the market, frustrated collectors often chase the same item. The outcome is a fight to secure that item at whatever price it takes, forcing prices up.
One of the few remaining cheap asset classes available
In recent years, markets have become more sophisticated in everything...
And more accessible to the masses through online trading...
As a result gold, oil, wine, etc. have all soared.
Despite a startling performance from the Fraser's 100 Autograph index over the past 11 years, prices remain low compared to similar asset classes.
Prices started at ridiculously low levels, so we now find ourselves 11 years later with prices that are no longer ridiculous but still "cheap".
To illustrate, in 1997 you would have needed to invest £80,720 to buy the components of the Fraser's 100 Autograph Index. Today, your investment would be worth £306,500...
To invest in our stamp index, the GB30 Rarities index, you would have needed £423,500 in 1998 to make similar returns.
The starting point for autographs was much lower but the returns are similar. We are still at the early stages in a growth market in the world of signatures.
Unlike the stamp market, the collector market in autographs is still relatively immature. Our business in autographs only started trading in 1978 at which time you could pick up a signed Beatles album cover for as little as £45. Today, that album could fetch as much as £45,000 at auction.
The market for autographs is still quite small particularly in rare signatures. This is now changing...
Our autograph division is the highest growth part of our business with sales up 37% over the past year. We are recruiting more and more new customers every week.
The point is... you don't need to be an autograph collector to want to own an autograph. Most people have a passion in life such as sport, music, theatre or art.
So if you are passionate about golf you would probably like a framed signed photo of Tiger Woods hanging up at home...
If you are a Bob Dylan fan, you would probably love to have original lyrics to "Blowin' in the Wind" in your hands...
Or how about a wonderful sketch by Picasso signed and dated... the list is endless.
This wide crossover of interest creates a much larger potential market for rare signatures.
Compared to the prices paid for fine art and antiques, rare signatures represent an opportunity to own a fascinating piece of history for a fraction of the price of most other rare collectibles.
The First Price Guide: The beginning of the end...
At the end of last year, we published our first ever Autograph Price Guide, "Collect Autographs".
This is good and bad...
It is good - investors can follow market values and a history of prices will build up in time to provide better transparency.
It is bad - collectors will become more aware of market values and they will demand a higher price to sell. This will put pressure on retail prices and lower the buy/sell spread.
Ultimately this change in dynamics will benefit investors with lower buy/sell spreads and improved liquidity.
Legendary American collector David Hall once explained a big secret about collectibles:
He said, "The big moves come when price guides first appear for a collectible."
The reason, David explained, is before the price guide, you have to be an expert.
You have to devote a ridiculous amount of time to becoming an expert...
Research, tracking the auctions, talking to dealers, and figuring out what is important, and more importantly, what isn't.
It's a time consuming business.
But once the price guide comes out, we have a level playing field.
Market timing is an important element to successful investing. I believe for all the reasons outlined above that now is the time to get in.
DYOR (Do Your Own Research)
Why don't you buy a copy of our "Collect Autographs" catalogue today? It is available for the price of only £9.95, postage free to our readers.
If you would like to purchase a copy of the catalogue to get a real insight into prices within the autograph market, please drop me an e-mail today at:
mhall@stanleygibbons.co.uk
Sincerely,
Mike Hall
Chief Executive
The Stanley Gibbons Group
P.S. Why not e-mail me your "wish list". Tell me the signatures you would love to own and I'll see if I can find them for you.
Background on Fraser's 100 Autograph Index
The Frasers 100 Autograph Price Index was designed to provide the definite measure of overall market performance and a yardstick against which to measure individual increases within the market for autographs and memorabilia. It serves to highlight the real price increases being achieved, especially amongst the rarer and more desirable items.
The index covers the full range of collecting themes and provides an objective measure of the current state of the market. All prices quoted are for outstanding examples in superb condition for 100 of the world's most sought after and frequently traded autographs and includes selected items from all major collecting areas
Key: sp = Undedicated signed photograph
aps = Undedicated album page signature
+44 (0) 1481 708 277
email investment@stanleygibbons.co.uk
TOLL FREE from the USA 1 866 644 6146