Every time the stock market starts acting like a a yoyo on a rollercoaster we notice an uptick in rare book sales in a specific price range: ones that have a similar price to most bluechip stocks. Maybe it’s just us, but it looks like as investors get antsy they decide to to diversify by acquiring a tangible investment rather than a share of something that has the price wobble so dramatically from day to day.
But ARE rare books a good investment? For most people, absolutely not, and you should tell your customers so. (some book dealer’s associations also specifically say in their member agreement you can never promote books as an investment opportunity). Books are no better an investment than art, collectibles, coins, whatever. They’re probably better than really marginal things like collector’s plates and beanie babies. But they are not a safe or easy way to make money for the casual investor with no specialized knowledge of the market.
If they’re looking for something that can be immediately converted into the same amount of cash they bought it for, right now, its an absolutely terrible investment. Virtually nothing except virtual assets can be immediately turned around for the same amount (or more than) they paid for it, and even those are dubious.
Rare and collectible books are just that, COLLECTIBLE. They are worth only what someone will pay for them. If they don’t have the connections to get best price out of it, they probably won’t make back the price they paid for it. They may not even be able to sell it themselves. They may have to go through a dealer or an auction house who will take a cut.
Any investment is entirely dependent on the amount of knowledge the purchaser can bring to bear on it. Sure, some people might get lucky and pick up something they can sell for a lot of money immediately… but they KNOW what they’re doing. Or they just plain got lucky. Somebody wins money at lotto every day… but the odds on it being YOU are very poor. Buying a book for investment purposes that you don’t already know a lot about it is like buying lotto tickets. Dealers even it out by buying so many books that the winners make up for the losers… or they go out of business.
All this makes it seem like they should never buy a book for investment, ever. But there is clearly a market for these things and book dealers do make money at it…
If a customer is determined that they want to buy books as a long term investment, they may well come ask for advice. If they aren’t very serious about it and aware of the pitfalls, do everything in your power to dissuade them from looking to rare books as an investment. For those that are ready to put in the time and effort finding the right books, here’s what they need to consider.
1. Never buy a book as an investment if they can’t care for the book. Books can become damaged with improper storage, display, or handling. (see this post on storing and displaying books)
2. Make sure they KNOW what they’re buying. Research, research, research. Any dealer can tell you that majority of the price is due to RESEARCH. They are paying for the dealer’s time researching and preparing the item for sale. Sometimes that research will reveal things they didn’t want to know such as its not the edition you thought it was and is worth less, but that research BEFORE putting down the money helps avoid surprises down the road. And if they DO buy a copy, make sure to keep the original description of the condition and history of the book with it. It will make a good starting point for what to look at later should they decide to sell it (of when it is described in a legal document for a will or insurance purposes).
3. Buy the best condition book they can afford. Books never improve in condition. At best, they will stay the same. At worst, they’ll deteriorate. And condition is king with book price. Other existing copies may deteriorate. So if they can take tip top shape of a copy that’s not the top of the line now, it may improve relative to other items given a few decades. But that’s a big if. It’s better to start with the best material they can afford.
4. Buy something that was produced in very limited quantities, the smaller the better. Comic books are a prime example of this. The collectors market caught fire in the early nineties as early issues of classic comics sold for astronomical prices. Things like Action Comics #1 (where Superman was introduced) sold for six figure prices because there were very, very few surviving copies. But comic publishers started hyping first issues of contemporary comics as investments and produced ever larger print runs for the collectors market and people held onto them… which meant there were huge numbers of them in pristine condition… and thus now sell for pennies, IF they sell.
The same is true for modern first editions of many popular authors. The print runs are so huge and so many people hold onto them, they are worth very little comparitively and don’t have good long term prospects. The fewer copies available initially, the more likely it will hold price or appreciate.
Numbered copies are a good bet and the lower the number in the sequence, generally the higher the value.
Of course the absolutely BEST thing to buy in that case is a manuscript. There’s only one of those!
5. Signatures are only really valuable in and of themselves if an author is dead. A signature on a copy with an already high value will probably keep its value, but a signature on a common low value item may lose value if the author holds a few book signings of that readily available copy!
Once an author has died, no more signatures can be made, so the price shouldn’t suddenly erode. (see this post on how to tell if a signature is real or a forgery)
6. Buy only from a reputable source. Online and offline buying are a bit different. Online it’s often difficult to tell if the description is accurate. The more detailed and precise the description, the better the odds you’ll get what you thought you were buying. If you’re unsure, ask for a photo of specific marks that can verify what you’re looking for.
Offline it’s a lot easier since you can make your own decisions about whether it really is what the dealer says and what condition it is.
7. Buy something that will improve their life. It sounds trite when people say “this book changed my life”, but this really is what you want an investment.
This could go one of two ways. It could provide deeper knowledge or it can provide an experience. Knowledge can take many forms. An older fiction book may provide a deeper understanding of other works from same time period, making them more enjoyable to read.
That knowledge can also be more directly applicable. I sell a lot of catalogs from auctions. The majority are bought by individuals or businesses engaged in making the same type of item depicted there. Jewelers buy catalogs of jewelry in private collections because it shows them new designs, makes them try and figure out the technique used, and will directly help them make new and better designs.
The second option is that the book provides an experience or provokes an emotional response looking at it. A rare copy of a beloved book may provide a sense of well being each time it is looked at. Someone that collects old Bible’s might feel a sense of God’s presence. A truly rare book or manuscript may invoke genuine feelings of awe, a rare experience in the modern world. Simply having it in their life provides them with a type of dividend a stock cannot provide.
In the end, that is really what an investment is. The collector should be invested in the item and benefit from its presence in their life AND when it leaves it. An item that does neither is not an investment.
3 thoughts on “Rare books as an investment”
And excellent assessment of collecting rare or not so rare books, Nora. The hypermodern craze took on a life that made collectors out of people who had no interest in books per se, just in the idea they may make money down the line. Of course print runs are the absolute key in this type of collecting–and anything with a large run isn’t worth collecting, unless it’s for your own personal love of the author or title. A Colin Dexter inscribed title with a print run of 100, 000 will not be worth money. An inscribed Dexter with personal thoughts just for the owner can be priceless, but only for the owner.
However, a signed George Pelecanos first edition of his first couple of titles, have and will increase in value. But only because his star keeps rising, the publisher was small, and the print run smaller. Still, the only people who would benefit are Pelecanos fans–waiting for a book to appreciate is no way to make money.
I have a small collection of really good books that I’ve seen appreciate a little bit–but certainly not enough for people to collect who aren’t in love with the written word to begin with. Maybe, if very very lucky, when I’m ancient, they may pay for one month of old age home residence. If not, I’ll have a lot to read while drooling in my cereal.
Excellent advice, Nora, and I love your conclusion. Do want to note something we’ve all been reading lately in the trade news, which is that publishers are starting to go for smaller print runs, thanks (?) to e-readers. Doesn’t change anything you’ve said but is another factor to consider.
My husband is a painter. We are rich in art and books, not in high-tech consumer goods.
As a new book collector I noticed that some of Stephen King’s signed books are extremely high as there is a huge market of his book fans.
I think that Not only if the publisher is small, and Not only if the print-run was small BUT ALSO how many books the author has been signing is an important factor for book’s value,for example from 1.2 million copies of Stephen King’s Full Dark No Stars – ONLY 450 copies had been signed which means 0.04% (think of 99.96% not signed).Therefore it is very hard to get this copy and not mention a low price if ever.
Recently Beautiful Books published ONLY 200 hardcovers of Stephen Edden’s The Wordsmith’s Tale and prices of signed copies soared up instantly and is out-of-print and unavailable now.Most ordered (the UNSIGNED) books were immediately snapped or even cancelled as the books were off from sale I believe by BOOKSELLERS THEMSELVES at book cover price( as investment for the future?) – a very unpleasant step I think.
The signed copies prices are extremely high now and only those that will be kept carefully will gain more (Remember: only 200 were issued).
I just wanted to share my humble opinion on book collecting as an investment.
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