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4 Jun 2020
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Can rare books be an investment?


A few years ago, a customer of mine asked me if rare books could be an investment. Here are some extracts of the answer I wrote him at the time:

The idea of rare books seen as a financial placement tends to divide the community of professional booksellers. The International League of Antiquarian Booksellers (ILAB) (to which we are affiliated in two ways through the Spanish and French associations) has been including these last few years the recomendation for its members not to promote the rare book as an investment or financial product. Such a prudence is understandable when you think about certain adventures like Aristophil's!
Even so, the patrimonial dimension, in all the senses of the term, of rare books seems obvious and rare books buyers, in their immense majority, still nurture the hope that their latest purchase will increase its value in the future (or, at least, that it will not see its value decrease).

Let's remind ourselves of a few preliminary ideas:

  • Generally speaking, in the past the value of rare books used to increase over time, which responds to a certain logic if you think that rarity generally also increases with time.

  • Twenty years ago the rare book market, with the internet revolution, started to go global which put within anyone's reach millions of rare books worldwide.
    Which effects have the development of internet had on the rare book market? They are obviously many, and the purpose of this quick overview is not to offer a complete survey but I'd like to underline two important effects: 1). Access to the virtual world has provided everyone with a specialised knowledge that was, until then, reserved to a sall number of scholars, professional librarians and experienced booksellers. 2). The redefinition of the concept of rarity taking into account the internet as a new essential tool for measuring the availability of a specific title in a specific moment, and its price. Before the internet, nothing could replace each individual's point of view and even the most experienced dealers could have an incomplete vision of the market.

  • As with all other markets (including financial products) the rare book market is subject to conjunctures and fashions that can be difficult to predict. It is consequently impossible to define it as a single entity moving in an orderly way.

  • Nowadays, to a certain extent, the rare book market is still in the assimilation process of the internet revolution. For example, rare books are sometimes available for sale in several copies around the world which generally influences their price downwards, but this tendency is probably temporary and after some time (maybe ten more years?) the price of these books will perhaps start to raise again because the few copies available today will not be on the market at the same time any more.

  • Despite the internet revolution, extremely rare and important books still fetch high prices at auctions and a quick glance at booksellers's catalogues and rare book fairs, shows that many high-end rare books still reach very high prices.



So, what must we think of the potential of rare books as an investment?

My answer is: yes, certain rare books can be a placement which can eventually produce a significant return after one or two decades (ten or twenty years). That being said, it is not a risk-free placement. In this perspective I would rate the risk to loose money from "moderate" to "relatively high", depending on various factors: who assists you, what subject you are willing to collect, etc.

A few words of advice:

  • Don't think only as an investor. Assign a value and be ready to pay a price for living your passion of collecting rare books. The idea should be to buy books which are worth the price you pay when you purchase them, and to maintain an ordered purchase policy aiming to lower the risk of seeing the value of your investment decrease significantly in the future. Obtaining a return on your investment should be the cherry on the cake, not the cake!

  • Be selective: try to define the perspective of your collection with a handful of words, then try to reduce these words to a combination that could make your collection unique and recognizable, but not out of reach.

  • Take the time to create and consolidate a personal relationship with a small number of experienced professional book dealers. ILAB professionals are usually extremely reliable and experienced, and if you are willing to invest your time and some money you will probably find a few good guides to assist you in your quest. https://www.ilab.org



And you? What do you think?
 
Love (of books) in times of COVID-19
posted by  Julien at  16:17 | comments [4]


BLOG COMMENT


posted by   COPERNIC (N.) 5 Jun 2020 at 21:35
No doubt we like to believe that "raritas et utilitas" drive the value of things. But that is only in exchange. Don't we also believe that something has a value for us, even if other people don't see it the same way?

For me books are an investment into myself. I learn through my books. About the past and about me. The good life (eudomonia) is the result.

And then, they will be around, when I am gone. Will they be of value to anyone? I believe that this is possible, because they are special, and because they gave so much to me.
 


posted by   CAMPANELLA (T.) 5 Jun 2020 at 22:00
No, they can't. It's just an illusion of many collectors.
Leandro Cantamessa
 


posted by   LAMBERT (J. H.) 8 Jun 2020 at 20:24
Someone new to collecting might be able to find a workable investment strategy for book collecting. But even with that, investment alone is a poor reason to collect books. I think this is the case for all books expect for (very) high spots -- which continue to increase in value. But the amount of money it takes to do that leaves only a very, very few collectors. In my field, an example of such a high spot would be Newton's "Opticks" of 1704. In the 80's one could get a copy for $15,000. Today it fetches $150,000.

But old collectors are seeing their investment diminish. Books I bought in the 80's and 90's are now known to be commonly available. Like many 2nd (and most 3rd) tier books, their value has diminished. Most of these can now sold only at a price much less than what I paid for them. In my field and example would be Smith's "A Compleat System of Opticks", 1738. In the 80's one needed to spend $6,000. Today it can be had for $2000.

In this regard, I am glad I did not collect books as an investment but because I wanted to learn their history, study their content, and find how they fit into history.
If one enjoys books, and has some discretionary income, book collecting can be deeply satisfying. But, unless one is dealing with a great deal of money, I think it is difficult to make book collecting work as an investment strategy. It is no longer enough to simply wait a long time (10 years, say) for books to rise in value. If one collects in a niche or follows a fad, then 10 years from now the fad for such books may have passed and one's investment may very well have vanished.

My conclusion: unless one if very rich, it is very difficult (though not impossible) to make book collecting work as an investment strategy.

David L. DiLaura

 


posted by   JULIEN 10 Jun 2020 at 17:12
My own position is very nicely reflected by "COPERNIC" when he says "For me books are an investment into myself" and later states "Will they be of value to anyone? I believe that this is possible, because they are special, and because they gave so much to me."
"LAMBERT" also illustrates my understanding of the impact of the internet on rare books prices when he says that some books bought in the 80's or the 90's are now known to be commonly available, and can now be purchased at a fraction of their initial price. When Smith's 1738 System of Opticks used to sell at $6,000, the rare book market was still using rather craft techniques and the demand could meet the offer at this price because the availability was limited. Nowadays, through a simple internet search, up to 5 different copies of the work will pop up, priced between $1,800 and $3,500.
Can 5 available copies worldwide be considered "a lot"? They probably do, considering the current number of potential buyers of this book and this is the main reason why its price has decreased but still, among thousands of antiquarian book shops (ILAB counts around 1,800 affiliated book sellers and the internet gathers non affiliated sellers or non professional sellers as well), only 5 of them can provide this title. So, ok, it's not rare but it's not that common neither. How long will take this title to become rare? Nobody knows but given its scientific importance, perhaps will come a time when less copies will be available on the market and the price would start raising again.
I wonder if before the internet the prices had a general tendency to raise up over time. This is what I have always been told by older book sellers but I wonder if there is any factual study about it.
And yes, it is true, there are fads and some subjects / authors / titles are actively pursued by collectors at one moment, and completely forgotten at others. And this works the other way around, even with great names, like you say with Newton's Opticks (1704).
So let's continue doing like "CAMPANELLA" by pursuing the books of our dreams. Time will tell if our dreams and tastes are significant to others...