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The Coin Article I Wish I Could Write

The Coin Article I Wish I Could Write

The year was 2000 and everyone was obsessed with technology stock…everyone except for me that is.  I was frantically researching another class of investments: ancient Greek gold coins.  You see, the ancient Greeks were renowned for minting remarkably beautiful coinage with images of rulers, deities, animals and mythical creatures.  Regardless of their subject, these coins were invariably struck in exceedingly fine style and with a three-dimensionality that was not mastered again in Europe until the late Renaissance.  And none of these ancient works of numismatic art are more desirable than those struck in gold.  They are the traditional apogee of fine coin collecting – the very same gems that were ravenously acquired by European nobility during the 17th and 18th centuries as they embraced all things Classical.

But in the year 2000 no one cared about ancient coins because they weren’t technology stocks.  Consequently, these miniature works of Classical art could be purchased dirt cheap at the time.  A mere $500 to $1000 per coin was sufficient to purchase a wide range of stunning examples in excellent condition.  I desperately wanted to own some.  There was only one problem.  I had just graduated college and although I had landed a white collar job in the financial services sector all my money was going towards rent and student loan payments with precious little left over for coins – regardless of how beautiful they might be.  But then my research took an interesting turn.

I had started thinking to myself, “What makes ancient Greek gold coins so desirable?”  In my opinion, it was a combination of their subject matter (the human form, animals, mythological creatures, etc.), their fabric (small and thick globular flans, hand-struck in gorgeous high relief) and their exceedingly fine, three-dimensional style.  I began feverishly researching the complete 2600-year history of global coinage until I stumbled upon a revelation: medieval gold coins from the native Hindu dynasties of South India.

These South Asian masterpieces are not ancient Greek coins, but they share almost all of the same characteristics.  Struck in captivatingly high relief, these coins feature gods and goddesses, rulers, animals and the occasional mythological creature.  The only difference is these coins draw on Hindu rather than Classical Western mythology for their subject matter.  The Indian pieces – every bit as alluring as their ancient Greek counterparts – are rendered in a distinctly curvaceous and seductive South Asian style.  Unlike Christianity in the West, medieval Hindu culture had no moralistic hang-ups surrounding the portrayal of the human form, whether man or anthropomorphic deity, and it showed.  Medieval southern India was a little bit of the ancient world that time forgot, complete with war elephants, grand stone temples and powerful empires and its coinage gloriously reflected this fact.

Almost unbelievably, these undiscovered jewels were only a tenth of the price of similar ancient Greek examples.  In the year 2000, $50 could buy you a gold 1/2 pagoda (1.7 to 1.8 grams) while $100 would get you a full gold pagoda (3.4 to 3.6 grams).  Even I, as a semi-starving former college student, could afford prices like that!

So why did I title this article “The Coin Article I Wish I Could Write”?  Because, unfortunately, the market supply of these wonderful little medieval South Indian gold coins has largely dried up.  eBay typically only has a handful of examples for sale at any point in time and they are usually overpriced, poor quality specimens.  Although prices are certainly higher than they were in 2000, Medieval South Indian gold coins are still beautiful little coins that provide an amazing opportunity for connoisseurship when you can find them in good condition for reasonable prices.  But good luck finding them.  My sincere hope is that one day more supply makes its way to the market so that others can come to appreciate these hidden gems.

The Bittersweet Goodbye of the Physical Antique Store

The Bittersweet Goodbye of the Physical Antique Store

The decline of physical antique stores in the United States has been brutal and swift.  In the late 1990s – a mere 20 years ago – almost every small town, rural outpost and city neighborhood had one or more quaint antique shops.  But the passing years have not been kind to these noble sentinels of the past.  While there are no hard statistics available, in my experience more than half of all physical antique stores have closed over the last couple of decades.  For example, see my article on The Great Boston Antique Store Massacre.  And these shops are not being replaced.  While there are several different factors behind the trend, it is an undeniable sea change in the industry.

Antique shops’ natural market, Baby Boomers, have begun their long march into the green pastures of retirement.  But a side effect of this situation is that many of the notoriously acquisitive generation are beginning to downsize their living arrangements.  And downsizing translates into selling stuff.  So collectibles, obsolete electronics, old exercise equipment and closets full of outdated clothing are going into Salvation Army donation bins or getting sold off for a few dollars at the local neighborhood garage sale.  And people who are liquidating stuff are not people who are buying stuff, especially not stuff from antique stores.

It is also difficult to overstate the impact that the Great Financial Crisis of 2008-2009 has had on antique stores.  That massive financial dislocation gutted the market for dozens of collectible categories nearly overnight.  Few people today, in the wake of the economic disaster, have the discretionary income to indulge in unnecessary dust catchers anymore.  Before 2008, many collectible categories like glass, figurines, memorabilia, quilts, furniture, etc., used to be longtime mainstays of the antique industry.  But suddenly because of the crisis, antique dealers lost a large part of their regular sales.  And there was no product segment to fill the gap.  Add to that the pressure from continually rising commercial rents and soon many antique dealers found themselves in financial trouble.  Some dealers struggled on for a few years past the initial crash, hoping things would turn around.  But once it became clear that a recovery was not on the horizon, these holdout dealers finally capitulated and went out of business.

The last reason physical antique stores have largely disappeared is due to the rise of the internet.  As the pool of potential buyers has thinned, many antique dealers have migrated online, setting up shops on sites like Etsy, eBay or Ruby Lane.  Online stores have much lower overhead than physical stores, so fewer sales are needed to cover fixed expenses.  There is no rent to pay or sales staff to hire.  In addition, an online antique shop immediately gains access to potential buyers all over the world and can effortlessly consummate sales at any time of the day or night.  These advantages are the final nail in the coffin for physical antique stores, leading many dealers to close their storefronts and switch to selling online exclusively.

While it is obvious that most physical antique stores will be going the way of the dinosaurs, I do not think they will disappear altogether.  I imagine that some antique stores in urban areas with a large enough population density to support them will be able to soldier on, carving out solid niches in their communities.  These survivors will probably cater to the successful professional classes.  I expect they will tend to carry either high-quality, high-priced traditional antiques or funky, vintage upcycled decorative items.  They would be worth visiting, if you can find one and have the money to spare.

I also want to be clear that I do not believe the decline of the collectibles market or physical antique shops implies anything about the future prospects for investment grade antiques.  Yes, people have discovered that they can live happily with much less junk in their lives.  But investment grade antiques are not junk.  They are the best of the best in the antiques market – a highly selective group of dazzling art that drips with style and history.  And they are portable as well, so space is rarely a constraint.  The world of antique stores may be changing forever, but investment grade antiques still have a bright future ahead of them.

Don’t Collect the Artist

Don't Collect the Artist

Those of us familiar with the art world constantly hear the names of famous artists thrown around.  Andy Warhol, Jasper Johns, Roy Lichtenstein and Willem de Kooning are just a few of the modern artists whispered about in hushed, reverent tones – almost as if their names invoke a supernatural power.  These artists and their many contemporaries usually have their works breathlessly described with words like ground-breaking, powerful, avant-garde and unique.  Their works also often sell for astonishingly high sums of money.  10 million dollars – 20 million dollars – 30 million dollars – it almost seems as if there is no limit to the prices some works of modern art can command.  And yet, these artists’ works are rarely good investments.  Why?

To be blunt, they are fads.  The people paying outrageous sums of money for non-representational blobs of brightly colored paint on a white canvas are not really art connoisseurs.  They wish to be perceived this way, but wishing doesn’t make it so.  Today’s modern art collectors are largely nouveau riche financial services executives or wealthy technology entrepreneurs who want to be recognized by their peers as cultured individuals.  Collecting art is a good way for them to appear as urbane sophisticates.  And no art serves this purpose better than abstract works from well-known modern artists.  Most modern art can be simultaneously opaque, unapproachable and sometimes, quite frankly, unconscionably ugly.  But these works are popular right now and make for great conversation pieces.  So out comes the checkbook and before too long another record price is set.

And now we’ve arrived at the heart of the matter.  Most of these hedge fund manager and Silicon Valley CEO collectors don’t know the first thing about art.  They are just parroting what they hear their jet-setting friends and business associates say.  Instead of understanding and appreciating the art itself, they are “collecting the artist”.  In some ways this is a very human reaction to what can be a very intimidating field of study.  Art is often complicated; meaningful commentary on a work can rarely be distilled into a glib, dinner-party sound bite.  And if you don’t really care about art – but only about impressing your very wealthy colleagues – then collecting the artist (especially modern artist) might seem like a reasonable move.

All of this focus on artists instead of art creates an opportunity for those investors who are willing to educate themselves properly and not be deluded by the latest craze.  Real art is instantly, undeniably beautiful.  It stands on its own merits, never relying upon a famous artist for its desirability.  When reasonably priced, authentic, high quality art tends to appreciate in monetary terms far into the future, regardless of who created it.  Don’t be caught chasing a hot artist in a fad that you don’t understand.  Always collect art for the beauty and allure of work itself; never just blindly “collect the artist”.

Purple Gemstones – The Color of Royalty Resurgent

Purple Gemstones - The Color of Royalty Resurgent

For most of recorded human history, purple was the original power color. It was the color of kings, queens, emperors and royalty. In the 1st century AD, Roman emperor Nero not only decreed that purple garments were reserved solely for the emperor, but also that trade in any purple items was banned – on pain of death!

In the 6th century AD, when an uncontrollable riot almost forced the Byzantine emperor Justinian I to flee, his consort, the empress Theodora, gave him courage by boldly declaring that “Royal purple is the noblest shroud.” Royalty has jealously guarded the majesty of purple for millennia.

For ancient and medieval peoples, purple represented the very pinnacle of color, a natural pairing to sovereigns. And no gem dripped more decadently with that elusive, royal color than coveted amethyst. The ancient Greeks believed the purple stone could prevent intoxication. In fact, amethyst comes from the Greek term “not drunk.” For centuries, amethyst was one of the most expensive gems on the planet, considered the equal of diamonds, rubies, sapphires and emeralds.

All that changed in the early 19th century, however, when massive deposits of the previously rare gem were found in Brazil. Prices plummeted almost overnight. By the late Victorian era, amethyst was considered far too plebian for the jewelry of the aristocracy, much less that of royalty, although it was still employed in some fine Arts and Crafts and Art Nouveau jewelry.

The second half of the 20th century was even less kind to once coveted purple gemstones. Calibre-cut amethysts were often used as inexpensive additions to low-value, mass-produced tennis bracelets, earrings and cocktail rings. Amethyst’s harrowing descent from noblest gem to lowly bauble mirrored purple’s demotion from the color of royalty to just another banal hue.

Fine jewelry largely ignored purple gemstones throughout most of the 20th century, instead gravitating towards the bold, thrilling reds of rubies, the enigmatic, soothing blues of sapphires and the dazzling, brilliant white of diamonds. But then a funny thing happened. It gradually dawned on gemstone connoisseurs that three exceptionally fine stones came in purple: sapphire, spinel and tanzanite.

One of the many different hues of fancy sapphire, purple sapphire had been inexplicably overlooked by the gem industry for many decades. Sapphire, with its incredible brilliance, fire and hardness, is the consummate colored gem. So it isn’t surprising that a renewed interest in purple sapphire has recently brought this ravishing gem to the forefront of fashion. This newfound enthusiasm has pushed purple sapphire prices skyward. Whereas 1 carat stones used to trade for around $50 per carat, now you would be very lucky to find decent stones at $200 or $300 a carat.

Purple sapphire’s sister stone, purple spinel, has also seen a wave of interest in the last couple of decades. In addition to being almost as hard and tough as sapphire, spinel possesses a rare and treasured trait among colored gemstones; it is never treated. This means that every (non-synthetic) spinel is an all-natural stone, mined directly from the earth with no need for artificial enhancements to bring out its tremendous beauty. These underrated gemstones are a bargain compared to purple sapphire, with fine specimens still available at under $100 a carat.

Tanzanite is a relative newcomer to the world’s stage. Only discovered in 1967, tanzanite is a striking violet-blue stone that is mined in only one location on earth – Tanzania. The gem’s similarity in color to blue sapphire – except with a strong hint of purple – has made it a hit among gem collectors and jewelry lovers alike.

In fact, the gem is so beautiful that the first company to promote the new gem shortly after its discovery was none other than renowned luxury house Tiffany & Co. Sadly for tanzanite enthusiasts, experts estimate that its single source mines have perhaps only 15 to 20 years of production left before they are completely exhausted.

As recently as 20 years ago, all purple gemstones was invariably assumed to be a cheap and garish amethyst. Consequently, purple gemstone jewelry was largely viewed as mundane costume jewelry. But this misinformed attitude is rapidly becoming a thing of the past. Today’s high power purple gemstones – sapphire, spinel and tanzanite – are all exceedingly rare, incredibly desirable and more popular than they’ve ever been before. Purple gems are back, but this time around they aren’t just for royalty.