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Our article "Good
Investment?", which appeared in the November
2004 issue of the "Automotive Chronicles",
received many comments — from praise to shock.
"Why hadn't I heard about this before?"
The answer to that question is simple. Buying
stocks and real estate is popular because stock
brokers, investment advisers and real estate agents
make a living off of people by promoting. Buying
stocks and land is usually too complicated to
do by yourself so you look for outside help and
you are willing to allow these people to make
a living by handling the transactions for you.
Stocks and land have been recognized as investments
for hundreds of years so most everyone feels comfortable
with these methods. Few have ever thought of automotive
literature as an investment — much
less researching its profitability.
Another question was, "How do land and real
estate compare to literature as an investment?"
Land and real estate increase in value with inflation,
in general, cycling above and below average, with
booms and recessions. Their real investment value
is that you can live on the land, build on it,
or grow crops on it while deducting it from your
taxes. Therefore, in the end, it usually earns
a profit. Still, like stocks, the increase in
value is far from as impressive as that of literature.
Joe from New York noted that when we wrote the
article in October 2004 the DOW Jones Industrial
Average Index was at about 10,000 but is now closer
to 11,000 and the all-time high was nearly 12,000
just a few years ago. His implication was that
those highs would make a difference in our results.
At 12,000 the DJI would have increased 3,329%
since 1954. At 10,000 it was at 2,757% so the
increase is not significant when compared to the
average brochure increase of 26,475%. If the DJK
were to double from its all-time high of 12,000
to 24,000 it would still only be a 6,757% increase
which is not likely to happen anytime soon and
still insignificant compared to literature. Joe,
a long time literature collector and MAH customer,
was also in the stock market. He was shocked.
"Can literature be sold as easily as stocks?"
Good question. The easiest way to sell a single
item is to put it on eBay, offer it to collector
friends or sell it to a dealer like MAH. While
eBay or a friend may buy a desirable brochure,
book, dealer album, etc., at retail price, a dealer
will usually offer only up to about 80% maximum
on consignment and less for an outright purchase.
Dealers have to make a profit just like the stock
broker and real estate agent. Still, the profit
to the seller is high because literature's increase
in value over stocks is so much higher. The answer
is, "Yes", it can be sold as easy as
stocks if you are an experienced collector. Plan
ahead when you collect for the maximum profit
potential in what you collect and how you are
going to sell it. Literature is an outstanding
investment.
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