Not for Art's Sake

SELLING COLLECTIBLES FOR PROFIT & CAPITAL GAIN by Richard H. Rush '37 Harper & Row, 1981. 258 pp. $15.25

Richard Rush is bullish on collectibles. Not just any collectibles, least of all the minor oddments that people collect for the fun of it - beer cans, toys, baseball cards, glass telephone-pole insulators but "investment collectibles, with an established market today, bought with an eye to investment value and appreciation over a period of months or years."

Rush is also an advocate, with an advocate's zeal for persuasion, for making a case. And he makes his case for collectibles

as investments with some impressive numbers culled from recent history. For the collector-investor, he points out, the decade of the seventies was "an era of phenomenal growth." During those years, 19thcentury traditional paintings, for instance, increased up to 12 times in value, English furniture and classic automobiles up to eight times, Tiffany lamps seven, Middle East carpets six. Indeed, in a mere two months, from December 1979 to February 1980, Rush estimates that one class of "investment-grade" diamonds rose 84 per cent in value.

Rush makes it his business to keep track of such things. For not only is he a collector himself, but he has also written four previous books on the investment potential inherent in such collectibles as art, antiques, and classic cars, and he publishes a biweekly newsletter for the collector-investor, Art! Antiques Investment Report.

But should the casual collector find himself tempted by Rush's logic to mortgage the old homestead and take off headlong for the modern Klondike of the collectibles market, he would do well first to ponder some of Rush's own warnings, express and implied. For the investor plays hardball, and plays it, moreover, in the big leagues. Self-evidently, then, the first requirement is sizable chunks of investment capital. The second requirement is more a matter of attitude. The investorcollector can ill afford amateurism; his attitude must be that of the professional. Whether he likes collecting, for instance, or enjoys whatever it is he collects, is by and large irrelevant. You wouldn't buy stock because you "liked" the color of its certificates. The same goes for investing in collectibles: The name of the game is profit. "If one is investing in a 1965 Rolls-Royce convertible, not simply buying a fine and fancy automobile," Rush observes, "his whole attitude toward such a purchase is different. The $100,000 price is not a cash outlay that will gradually decrease in value as the car gets older. One has made the choice of investing in an automobile instead of, say, 1.8.M. stock."

For those whose incomes place them in high tax brackets investing in collectibles is particularly attractive, for "the sale of an investment collectible," Rush points out, "results in a capital gain (if sold at a profit), not ordinary income." But of course profits on investments are not profits until they are realized, and they can be realized only by timely and judicious sale of the collectible. That, then, is what Selling Collectibles is about: "how to sell, when to sell, and where to sell."

Rush lists five specific objectives for his book: to analyze the most profitable methods and channels for selling all kinds of collectibles, to warn against those methods most likely to be unprofitable, to "show how to establish the value of a collectible," to "suggest how to protect yourself against the many risks of selling," and to "advise how to prepare the collectible for sale" so that it will command top dollar. To these ends he analyzes the advantages and disadvantages of marketing through the major auction houses, art and antique dealers, or the publications of specialized collector's clubs. One chapter deals with selling through advertisements in newspapers and magazines, another with selling locally (through commission marts, tag sales, and house auctions), and yet another with the means by which a seller may, under special conditions, tap the lucrative museum market. There is a chapter analyzing the financial conditions under which the owner of an appreciated collectible would profit by giving it to a non-profit institution instead of selling it. Rush's book is clearly not for everybody. If you still believe, perversely, that fine wine, for instance, is primarily for enjoyment, then you may find yourself something less than thrilled by the fact that a case of Mouton Rothschild 1961 which sold in 1976 for $670 was auctioned four years later at $1,980. Nevertheless, the possibility that such a statistic conjures up is intriguing. Making money usually is.