Photo Credit: ravengem01
Due to my interest in the antique market, I end up spending a lot of time on eBay. And there is something very interesting that I’ve noticed on the platform. Antiques are cheap right now. Really cheap. Super cheap. It is a superb time to accumulate high quality antiques, but how did this marvelous investment opportunity originate?
In my opinion, the antique market is currently experiencing the final low in a triple bottom sequence that dates back 20 years. The first low coincided with the original, late 1990s Dot Com bubble. At the time precious metals were trading for ridiculously low prices: $300 an ounce for gold and $5 an ounce for silver. This meant that a lot of antiques containing precious metals were very inexpensive. But very fine antiques or those created by famous makers still commanded healthy premiums.
The second low in the antiques market hit during the financial chaos of the 2008-2009 Great Recession. This economic downturn was the most severe to hit the United States since the Great Depression of the 1930s. Many good antiques dropped in price due to forced liquidations by people who were selling everything in order to raise much-needed cash. Precious metals also took a brief dip during this downturn, making antique silver and vintage jewelry more affordable. In addition, the collectibles market more or less imploded during this episode, never to recover.
We are now in the midst of the third, and in my opinion, final bottom of the last two decades. The antiques market has been absolutely ravaged by the weak economy of the last decade. The middle class has experienced a relentless decline in its purchasing power, which has greatly curtailed most discretionary spending. This is one of the reasons that retailers as varied as Sears, Payless Shoes, Radio Shack and Barney’s New York have all gone bankrupt. People are reserving their precious dollars for the bare necessities: mortgages, utility bills, food, etc. Antiques are simply one casualty among many here.
The investment opportunity provided by this third dip is your best chance – and perhaps last chance – to buy high quality antiques at knock down prices. Tremendously desirable fine antiques are selling for sums of money that put them well within the reach of regular people like you and me. Items that would have previously only been affordable to the wealthiest echelons of society are out there waiting for bids – oftentimes any bids!
Want proof? Here is a small selection of the deals I’ve come across on eBay in the last few months.
I found a fantastic lot of vintage U.S. Navy military insignia from World War II. Every piece was made from sterling silver, with at least one of them being gold-filled over sterling.
Now I usually advise against purchasing gold-filled antiques, but gold-over-silver is a different animal. It is the absolute finest form of gold-plating in existence (along with now long-defunct mercury-gilding). Because so few vintage military insignia were crafted from solid karat gold, gold-filled over silver is often the best a collector can hope for. As an added bonus, the set even included a couple of rare Ballou sterling silver clutches that were only briefly produced during 1942/1943.
Amazingly, this lot of 8 pieces was selling for a buy-it-now price of only $75 – less than $10 per pin – hardly more than garage sale pricing! This feat is even more impressive when one realizes that these tangible pieces of World War II history are becoming increasingly scarce with the death of the Greatest Generation.
Incidentally, this lot of vintage military insignia was a great example of the benefits of super-sizing your antique purchases. Instead of buying a single vintage pin for $15 or $20, it makes a lot more sense to do volume buying in order to get the best price on a per-item basis.
Alas, for all you militaria buffs out there, this fine collection of World War II sterling Navy insignia (pictured at the top of this article) sold just a couple days after I stumbled across it. I can’t say that I’m surprised, given how low the price was. The antiques market can be an unforgiving place for procrastinators.
But that wasn’t the only intriguing antique investment opportunity I stumbled across. I also unearthed a beautiful Edwardian British sterling silver snuffbox engraved with a stunningly ornate monogram. It had a thick layer of rich gilding on the interior, which was standard practice to ensure the silver didn’t corrode from contact with the tobacco snuff it carried. According to its hallmarks, this piece was made in Birmingham, England in 1900 – right at the height of the grandeur of the British Empire.
Under normal circumstances, a monogram is considered a negative by many antique silver enthusiasts. But in this case, the elaborate monogram complemented the silver snuff box’s streamlined design, considerably enhancing its desirability. It wouldn’t be a stretch to say that the monogram (along with the applied decorative thumb-catch) made the box.
Although this piece would have been an absolute gem for any tobacciana aficionado, it might leave non-tobacco enthusiasts cold. But it shouldn’t. After all, one doesn’t need to indulge in smoking, cigars or snuff to appreciate the tremendous artistic beauty of this 120 year old silver box. In addition, this snuff box could easily have been repurposed to hold your pills, keepsakes, personal stash or any other small, precious item you might have on hand.
The price? A stunningly cheap £105 – around $129 at then current GBP-USD exchange rates. This is about equal to one month’s cell phone or cable bill for the average American family. Unfortunately, this Edwardian treasure has sold too.
The final investment opportunity I want to highlight today is an 1886-S U.S. half eagle $5 gold coin certified MS-63 by NGC. At today’s prices, pre-1933 U.S. gold coins are one of the greatest numismatic bargains of the last several decades.
And this particular example had it all. It was third-party certified as being Mint State – among the highest grades assigned. Now a lot of old gold coins get slabbed as MS-61s or MS-62s, however these lower Mint State condition coins aren’t usually the prettiest specimens. But with few hairlines and frosty original mint luster, this 1886-S half eagle went above and beyond, truly earning its MS-63 designation.
Yet despite being in great condition, it wasn’t terribly expensive at only $535. This is because 1886 half eagles struck at the San Francisco mint are considered “common-date” in the world of numismatics. I use the term “common-date” in quotation marks here because a grand total of just 3,310 1886-S $5 gold pieces have been graded by NGC and PCGS in MS-63 or higher condition.
Let’s take a moment to compare this “common-date” gold coin, with 3,300 extant high grade examples, to something like Amazon stock. Amazon is currently trading for over 3x as much per share as the 1886-S half eagle in question ($1,801 vs $535), even though there are 510 million shares of Amazon outstanding (as of June 30, 2019). Oh, and the 130 year old Mint State half eagle also contains $360 worth of gold (with gold spot hovering around $1,485), which puts a hard floor underneath its price. I seriously do not see how you lose with this proposition.
In fact, this investment opportunity was so much of a no-brainer that I bought the coin myself! I waited for a 10% eBay Bucks promotion, which brought my effective purchase price down to only $482. And while you may no longer be able to buy the exact same coin I did, there are many other MS-63 certified “common date” pre-1933 U.S. gold coins that can still be purchased for ridiculously low premiums over their melt value.
Today’s antiques market is truly a paradise for the intelligent hard asset investor. But there is one catch. If you want to benefit from this sterling investment opportunity, you must take action now. It is far too easy to simply sit on the sidelines, believing that today’s great deals will always be available. I can assure you that they will not.
If you have ever had any desire to buy antiques, now is the time to do so. If you ever wanted to own a vintage 1950s Omega wristwatch, or a genuine 19th century Japanese samurai sword tsuba, now is your best chance. Don’t make the mistake of waiting; this unique investment opportunity won’t stick around forever.
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