Release: MONDAY JUNE 19, 2020
“Strike when the iron is hot.” “Make hay while the sun shines.” “Seize the day.” There are countless idioms aimed at taking advantage of the moment - doing things sooner than later. That’s especially true for collectors or investors insofar as knowing when to buy and when to sell. Of course, much of that involves an educated guess. Or, luck.
Consider an opulent mansion on fabled Lake Shore Drive in Chicago. Owned by the College of Surgeons, they tried to sell the sprawling estate home in 2015 for $17 million. No takers. A few years later the price was lowered by multiple millions. Still, no soap. Finally, it was slashed by fully $11 million to $6 million. Two weeks ago, it went under contract for an undisclosed sum – probably well below the last asking price.
It goes back to three key aspects: Cost, Value, and Price. Cost is what someone originally paid and/or put into something – basically the out-of-pocket expense....
Value is the most capricious. What’s valuable to one person may not be to another because sentimentality often factors in. The ivory handle pocket knife from your father might mean everything to you yet nothing to a stranger. So too for collectibles of historic interest. Consider a used pair of women’s shoes from the late 1930s. Most are worth nothing. However, if they are the famed Ruby Slippers worn by Judy Garland in the film Wizard of Oz, collectors will pay up to $3 million.
Finally, there is Price. That’s what someone is willing to pay. At auction, you need at least two people who both “value” the item enough to pay that “price.” Be forewarned. What the interest will be in the future - and the price someone will pay at the moment - is anyone’s guess.
A prime example of that began in 1998. That year, baseball sluggers Sammy Sosa of the Cubs and Cardinal Mark McGwire were each chasing the record set by Roger Maris of 61 home runs in a single season. In the end, McGwire finished the year with a whopping 70 home runs. Steroids aside, it was a sports record heard ‘round the world.’
Phillip Ozersky, a lucky fan in Busch Stadium snagged that #70 ball. I remember seeing him whisked away in a cart surrounded by police as he cradled the ball. I wondered if he would keep it or sell it. It turns out Ozersky “struck while the iron was hot.”
Just months later that famed McGwire ball went on the sports auction block. The winning bidder was comic book artist Todd McFarlane who paid $3 million. Three years later, Barry Bonds broke McGwire’s record by hitting 73 home runs. Today, sports collector pros estimate the value of the ball McFarlane owns: between $300,000 and $400,000 – a drop of 80 to 90 percent.
This is not to say collectibles don’t rise in value. In fact, most do. Jay Leno would be the first to point out how classic cars continue to increase year-after-year. Coins and stamps tend to consistently be in demand. And, thanks to soaring disposable income in the Pacific Rim, demand for Asian art and ceramics seems to always eclipse supply and bring record prices.
The one thing to remember is, in the world of collectibles, condition is key. A classic postage stamp or coin might be rare but if it is in so-so shape, collectors will quickly look for something better. It’s true for anything nostalgic. Dings, dents, rust or similar problems will surely drop the value and, in turn, the price. And, no…trying to fix a problem by hiding it with a cheap repair will only make matters worse.
It’s said young people today don’t want possessions but, rather, experiences. Maybe. The thing is, those with deep pockets will still always eagerly pay to own a piece of history or something dear to their childhood. Whether that purchase is a home run (or 70 home runs) is not only up in the air, it will always be in the eye – and wallet – of the beholder.
For more collecting advice, visit www.peterexford.blogspot.com