The Worrying Decline of Tangible Household Wealth

The Worrying Decline of Tangible Household Wealth

An unfolding financial trend that has caught my attention lately is the decline of tangible household wealth.  Now, when I talk about tangible household wealth in this context, I am not referring to houses or other real estate.  Instead, I am referring specifically to portable tangible assets – basically anything found in a household that can be picked up and moved.

This includes items such as furniture, antiques, jewelry, fine art, etc.  But I’m intentionally excluding vehicles, like cars, pickup trucks, RVs and heavy equipment because they are outside the boundaries of this discussion.  Now that we have the ground rules out of the way we can plow into the heart of the topic.

Most middle class households have become progressively poorer from a portable tangible asset perspective over the last couple decades.  If you were to take an inventory of the average person’s home today, you would find precious few items worth more than $100.  And if we were to ignore rapidly depreciating electronics and appliances, the amount of tangible household wealth would be embarrassingly small.

Let me give you an example.  A few months ago I helped clean out my grandmother-in-law’s house as she transitioned into a long-term care facility.  Her home was a modest two-story colonial with three bedrooms and one bathroom.  She is a typical middle class woman who lived a typically middle class lifestyle.

But the tangible household wealth contained in her physical estate was surprisingly small.  Nearly all her tangible net worth was tied up in her house and car.  Once we exclude these two items, there was precious little left over, even after a lifetime of accumulation.

The family ended up hiring an auctioneer to sell everything in the house.  The results of the auction amounted to a meager $1,100.  And that sum is before the auction company took its cut.  Although I don’t know exactly how much the auction netted after fees, $500 or $600 would be a reasonable guess.

Just imagine!  All the physical objects this 90 year old woman (and her now deceased husband) accumulated over her entire lifetime (with the exception of her house and car) were worth a grand total of $500 after fees.  That is a shockingly small amount of money!

Of course the whole story is a little more complicated.  Relatives did go through her house first, taking anything that had sentimental (and occasionally monetary) value.  A few pieces of furniture, a handful of jewelry and some Christmas ornaments comprised the bulk of stuff that was removed.  But honestly, I doubt these items in aggregate were worth more than $500 to $1,000.  A total portable physical estate with a gross value of $1,500 or $2,000 still isn’t very much.

I suspect that many other middle class households across the United States are in a similar situation.  And that possibility should be deeply troubling.  After all, portable tangible household wealth has acted as a traditional buffer against financial misfortune for centuries.  But after peaking sometime in the 1990s, U.S. tangible household wealth has been in decline.

This de-emphasis of portable tangible assets in the net worth of average people has taken on renewed importance due to today’s rampant asset bubbles.  Many people have been seduced into keeping their entire net worth tied up in paper assets like stocks and bonds.  In addition to outsized appreciation during recent financial bubbles, paper assets are also perceived as efficient and trouble-free.

But the problem with bubbles is that they always burst eventually, leading to devastating financial losses.  Even investors who try hard to avoid buying bubble assets might find themselves caught in the economic fallout via a job loss or other unforeseen event.  A few gold coins or pieces of valuable jewelry could act as a welcome portfolio counterweight in these circumstances, offsetting some of the unavoidable risks associated with traditional asset markets.

But I also think it is important to ask why tangible household wealth has declined.  Although I more fully explore this topic in an article I wrote titled “Society’s Tangible Wealth Building Escalator Is Broken“, I will hit the highlights here.

First, cultural trends over the last few decades have de-emphasized portable hard assets in favor of financial assets like stocks and bonds.  In particular, the rise of the internet and its associated technologies has absolutely dazzled modern society.  The resulting rise of digital assets, most notably crypto-currencies, has prompted some people to ask why they need to hold any tangible assets at all.

I also believe that intense economic pressure due to the fall-out from our serial boom-bust economy has negatively impacted tangible wealth accumulation.  Simply put, many people don’t have the means to purchase high value physical goods anymore.  High quality jewelry, sterling silverware or a nice painting to hang over the fireplace are simply too luxurious when the mortgage or car payment come due.

Millennials have it even worse.  They are laboring under the burden of onerous student loans, poor job prospects and near zero-interest rates on savings.  None of these factors is conducive to being able to afford fine antiques or any other valuable tangible assets.  You’re simply not interested in buying a late 18th century, curly-maple, slant front desk when you are struggling to pay off your student loans.

Unfortunately, I fear that the decline of tangible household wealth is far advanced by this point.  We have collectively, as a society, spent the past 25 years slowly liquidating our physical inheritance.  I believe this is a trend we will come to bitterly rue the next time the financial markets crash.

 

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Ancient Silver Athenian Tetradrachm, 5th Century BC

Ancient Silver Athenian Tetradrachm, 5th Century BC
Photo Credit: FORVM-ANCIENT-COINS

Ancient Silver Athenian Tetradrachm, 5th Century BC

Buy It Now Price: $1,898 (price as of 2018; item no longer available)

Pros:

-This magnificent Old Style Athenian tetradrachm was struck in the ancient Greek city-state of Athens during the height of its cultural, political and military power between 454 and 404 BC.

-This ancient Athenian Tetradrachm measures 23.3 mm (0.92 inches) in diameter and weighs 17.14 grams (0.5511 troy ounces) of nearly pure silver, which was most likely extracted from the famous Laurium Mines of nearby southern Attica.

-The obverse of the coin portrays the head of the goddess Athena wearing a crested helmet that is decorated with olive leaves.  The back shows Athena’s mascot, the Little Owl or Minerva Owl (Minerva was the Roman equivalent of Athena), along with a sprig of olive leaves and a crescent moon.  In addition, the reverse of all Old Style Athenian tetradrachms have the inscription “AΘE”, which translates from ancient Greek as “Of the Athenians”.

-The Greek city-state of Athens was at the pinnacle of its power when this coin was minted in the late 5th century BC.  It was during this period that the influential Athenian politician Pericles ordered the construction of the world-famous Parthenon temple.  It was also during this time that the great philosopher Socrates honed his unconventional theories in the streets of Athens.

-Athenian tetradrachms were known as “owls” or “girls” in ancient times.  These impressive silver pieces are the world’s first international trade coin and circulated widely in the ancient Mediterranean Basin.  The purchasing power of each owl was equivalent to about 4 days’ wages for a skilled craftsman.

-The condition of this Athenian tetradrachm is excellent.  It has been certified by the third-party grading service NGC (Numismatic Guarantee Corporation) as XF (Extra Fine) with a 4/5 strike and a 4/5 surface.  This isn’t perfect, but it is very nearly as good as it gets with Old Style Athenian silver owls.  You may be able to find an example in marginally better condition, but you would pay dearly for the honor.

-Old Style Athenian tetradrachms are the iconic ancient coin.  They are held in a level of esteem by knowledgeable collectors that all other ancient coins can merely aspire towards.

-A full and well-centered strike is almost as important a consideration for an ancient coin as its condition.  Happily, this ancient Athenian tetradrachm is splendidly struck.  All the major design elements are completely visible on the coin, including Athena’s face, the Minerva Owl and the AΘE legend.  This is even more remarkable given the slightly irregular shape of the flan.  The only design feature that is off the flan is the crest of Athena’s helmet, but that is typical for this series.

-This Old Style Athenian tetradrachm is being offered for sale by Forvm Ancient Coins, a trusted ancient coin dealer.  In addition, it has been third-party certified by NGC, which guarantees its grade and authenticity.

-Due to their historical importance and pleasing design, there is perennially strong demand for silver Athenian tetradrachms from ancient coin collectors.  As a result, their prices almost never drop, but instead creep steadily higher year after year.  Consequently, I believe the $1,900 asking price for this breathtaking Athenian tetradrachm is fair.

 

Cons:

-Few people can afford to spend almost $2,000 on a single ancient coin.  However, as expensive as it seems today, the price for this silver Owl will undoubtedly be higher in the years to come.  In fact, an Athenian tetradrachm in this condition could have been purchased for perhaps $1,000 only 15 or 20 years ago.  But you won’t be able to touch a decent specimen for that price today.

-Counterfeit ancient Greek coins are ubiquitous in the secondary market.  Because of this, I believe anyone interested in investing in these ancient masterpieces must exclusively purchase from a highly reputable ancient coin dealer or only buy examples that have been third-party certified by ANACS or NGC.  Luckily, this Athenian tetradrachm ticks both of those boxes.

-This coin has a noticeable die-crack on its reverse that is original to its minting.  Ancient coin enthusiasts understand that minor idiosyncrasies like this are simply a fact of life when collecting ancient coins.  I do not believe that this die crack significantly impacts the coin’s value or desirability.

 

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Gothic Goodness – Medieval Woodcut Prints

Gothic Goodness - Medieval Woodcut Prints
Here is a medieval woodcut print depicting a scene from the bible where Jesus is teaching his followers.  This incunable print comes from a 1488 Flemish work titled “Dat Boeck Vanden Leven Ons Liefs Heeren Jhesu Christi” which roughly translates from the Middle Dutch as “The Book of the Life of Our Good Lord, Jesus Christ”.  The biblical theme, rubrication and striking monochromatic art style are absolutely typical of medieval woodcut prints from the late 15th and early 16th centuries.  It cost less than $100 on eBay.

As the old saying goes, “time waits for no man”.  Naïve youth doesn’t fully understand the full weight of these words.  But those of us who have lived on this earth for at least a few decades comprehend their true meaning all too well.

Although time might march relentlessly onward – leaving the debris of both people and history in its path – some things stand tall against its implacable ravages.  Medieval woodcut prints are among these hallowed things.  These masterpieces of the paper-crafter’s art often look as beautiful and captivating today as they did when they were first printed some 500 years ago.

Early woodcut prints reflect the soul of late medieval European thought.  They portray the most important topics of the period, including biblical scenes, episodes from Classical mythology, exotic animals, botanical renderings, famous cityscapes and maps.  Depictions of the noblest chivalry, grandest kings’ courts and idyllic rural scenes grace these gorgeous works of gothic art.  They are medieval culture personified and ready to hang on your wall.

The origins of medieval woodcut prints date to mid 15th century Continental Europe.  During that time in the walled German metropolis of Mainz, Johannes Gutenberg commercialized one of the world’s greatest inventions – the movable type printing press.  The greatest consequence of Gutenberg’s invention was an explosion in the production of books in late medieval Europe.

Until the mid 15th century, all books produced in Europe were illuminated manuscripts.  These works of art were painstakingly handcrafted by highly trained scribes on parchment (processed animal skin).  This method was so slow and arduous that a single book could take years to produce and would sell for a small fortune.  Libraries were the lofty domain of royalty, nobility and monasteries.

But within just a few decades of Gutenberg’s invention, newly printed books flooded Europe, radically driving down their prices while simultaneously increasing their accessibility.

The most visually striking feature of late medieval books are their woodcut print illustrations.  Before the invention of the printing press, a book could only be illustrated through hand illumination, a very tedious and time consuming process.  But alongside the advent of movable type printing, another allied technology – the woodcut print – was also developed.

 

Affordable Medieval Woodcut Prints for Sale on eBay

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In this process a slab of wood was carved with an illustration or design by a highly trained artist.  The resulting woodcut was then mounted on the printing press, either with or without movable type, depending on the page arrangement.   Multiple copies could then be created with much greater ease and efficiency than hand illumination.

Medieval woodcut prints were so popular that they were sometimes printed as standalone art pieces too, known as single-leaf woodcuts.  Woodcut prints found in late medieval books were often as large as possible, occupying either a full page or half page.  However, it isn’t uncommon to find smaller woodcut print illustrations or margin designs peppered throughout early books.

Woodcut carving was an incredibly demanding skill that required years of apprenticeship to a master.  In fact, many of the greatest artists of the late medieval period experimented with woodcut prints in addition to other art mediums.

A perfect example of this is the renowned Northern Renaissance artist Albrecht Durer.  Active from the mid 1480s until near his death in 1528, Durer was an artistic genius – a true renaissance man.  He had trained as a goldsmith during his youth and later became not only a master painter and engraver, but also perhaps the finest woodcut carver of all time.  His works have a level of detail and refinement that was unrivaled in his time.  Consequently, Durer’s prints usually command a premium compared to other contemporary woodcut artists; his paintings are only found in museums.

 

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Late medieval printed books created before the year 1500 are known as incunables or incunabula.  This name derives from the Latin term for “cradle”, referring to the inception of the printing industry.  Post-incunables are books printed after the year 1500 but before circa 1540.

The dates used to divide incunable and post-incunable works are necessarily arbitrary in nature; the year 1500 did not see any significant advances in print technology.  Similarly, the end date applied to post-incunables is open to discussion, with some authorities preferring an earlier date of 1520 or a later date of 1550.

Another interesting aspect of medieval woodcut prints is the paper they were printed on.  The paper used in late medieval printing is completely different from modern paper and superior to it in every way.  Present-day paper is made from crushed wood pulp that is then chemically bleached.  This results in paper that is not only relatively fragile but also acidic in nature.  As a result, modern paper tends to yellow and turn brittle after only a couple decades.

In sharp contrast, the paper found in 15th and 16th century printed books, called laid paper, was made from pulverized cotton or linen rags.  Due to the longer fibers of cotton and linen, laid paper possesses far greater strength than modern wood pulp papers.  It is also naturally acid free.  This means that laid paper often survives vast spans of time – even centuries – in good condition.

 

Incunable Medieval Woodcut Prints for Sale on eBay

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Laid paper was manufactured by mixing shredded cotton or linen rags together in a vat with water.  This pulpy mixture was then poured into a mold with a wire mesh bottom.  The water drained through this wire sieve, leaving a single sheet of high quality, very durable paper once dry.

The wire mesh used in the fabrication process leaves a characteristic patterning effect on laid paper.  This crisscrossing pattern consists of narrowly spaced laid lines and more widely spaced chain lines oriented at a 90 degree angle to the laid lines.

Laid paper can best be identified by backlighting the sheet and looking for the network of crosshatched lines.

Although less difficult to produce than animal parchment, laid paper manufacturing was still relatively labor-intensive and time-consuming.  Consequently, laid paper production was almost completely supplanted by new paper manufacturing techniques during the Industrial Revolution in the late 18th century.

 

Post-Incunable Medieval Woodcut Prints for Sale on eBay

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As a general rule, incunable medieval woodcut prints from before 1500 are somewhat more expensive than later, post-incunable examples.  While the end date of the post-incunable period is still open to scholarly debate, it would be wise to only purchase prints produced before circa 1550, unless they are from known artists.

Size also influences pricing, with larger prints naturally being more desirable than smaller prints.  Rubrication, or the coloring of the initial, capital letter of a page with red, is another attractive feature of some incunable and post-incunable medieval woodcut prints.  Subject matter also significantly impacts price, with well-known biblical scenes fetching strong premiums.  Botanical prints and patterns typically trade at substantial discounts and should be avoided if investment return is a primary consideration.

Condition, as always, is a key factor of paramount importance.  Torn, excessively water stained or extensively holed prints should be avoided.  Likewise, pieces that have had their margins heavily trimmed or have had the print illustration cut out from the text on the page are not investable.

Woodcut prints from known masters bring the best prices, with works by Albrecht Durer standing at the top of this elite group.  Beware of later copies of famous prints which are substantially less valuable.

 

Medieval Woodcut Prints from Known Artists for Sale on eBay

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Late medieval, single-leaf woodcut prints are not only impressive artworks but also tremendously underrated in today’s market.  These works exude a wonderfully medieval, gothic sensibility that would magnificently complement a private library, study or master bedroom.  Pricing starts at around $50 to $75 for more common examples, but quickly escalates into the hundreds for prints by famous makers.

Highly desirable pieces by Albrecht Durer in pristine condition can venture into the thousands.  Fully intact incunable and post incunable books are very rare and easily command thousands or even tens of thousands of dollars.  Time may never stand still, but you would never know it when gazing at these spectacular medieval works of art.

 

Read more in-depth Antique Sage medieval art investment guides here.


Your Hopalong Cassidy Collectibles Are a Bad Investment

Your Hopalong Cassidy Collectibles Are a Bad Investment
Photo Credit (CC 2.0 license): Dennis Amith

I was recently a guest on Harry Rinker’s antique-themed radio talk show “Whatcha Got?”  We had an animated discussion about a range of antique-related topics, and I encourage you to listen to the archived show if you haven’t already.

Unfortunately, I felt that Harry and I sometimes talked past one another due to our different perspectives on the industry.  Harry is one of the venerable old guard, having been in the industry since the 1970s.  My background is a unique fusion of traditional financial services professional, precious metal historian and antique collector.  It isn’t surprising that Harry Rinker and I have differing viewpoints on the antiques industry.

To me the antiques market breaks down into two major categories: investment grade pieces and everything else, which I generally refer to as collectibles.  To Harry, every individual antique category (glassware, furniture, etc.) is sovereign, with a low-end, mid-range and high-end all to itself.

During our talk, Harry made one statement related to these implicit beliefs that stood out to me in retrospect.  It was about Hopalong Cassidy, a heroic cowboy character whose adventures in novels, movies, television and radio made him wildly popular with children from the 1930s through the 1950s.  I will fully quote Harry’s comment here for context:

I sold off my Hoppy [Hopalong Cassidy] collection way too late, but I could buy it back today for 10 cents on the dollar because people who collect Hopalong Cassidy stuff are gone.

Now, I don’t want anyone to think I am belittling or ridiculing Harry Rinker.  He was nothing but a gracious host to me during our talk.  And he has decades more experience on the dealer side of the antiques industry than I have (or probably ever will).

But believing, implicitly or otherwise, that your Hopalong Cassidy collectibles will appreciate in value over time is just bizarre to me.  In my opinion, there is no such thing as an investment grade Hopalong Cassidy collectible.  It is sort of like thinking your collection of 1980s Alf memorabilia or your modern-day shrine to Katy Perry are good investments.  You can certainly hold that opinion, but it is unlikely to be validated over time.

Does pop culture memorabilia occasionally appreciate in value?  Sure!  But it is generally driven by demographics and fads.  And, as Harry Rinker so perceptively noted, the people who grew up with Hopalong Cassidy are either dying off or not collecting anymore.  Unless that fading demographic trend gets an unexpected assist from an oddly specific mid-20th century children’s television hero revival, there will only be fewer Hopalong Cassidy fans in the future.

Alf collectibles and Katy Perry memorabilia are no different.  They will each have their day in the sun as kids who grew up with them reach middle age (Alf is there right now).  Then they will ride off into a long, slow metaphorical sunset.  In short, pop culture collectibles don’t make any sense as long-term investments!

As an aside, because the subject of Alf came up, I feel compelled to insert a Simpson’s quote here.  As Bart’s friend, Milhouse, stated so eloquently, “Remember Alf?  He’s back…in pog form.”  Now that I have that out of my system, we can go back to talking about serious adult things again!

We can objectively evaluate the desirability of Hopalong Cassidy collectibles in greater detail by referring to the Antique Sage’s 5 rules for investment grade antiques.  In order to be desirable, an antique must have portability, durability and scarcity, in addition to being high quality in both materials and craftsmanship.  Finally, it must also possess good zeitgeist, or cultural relevancy to the period in which it was created.

How do Hopalong Cassidy collectibles measure up?  Unsurprisingly, they fail the 5 rules of investment grade antiques.  First, primarily being children’s toys and accessories, they are almost universally poor quality, having been made from plastic, die cast, paper and other low-end materials.  Now, vintage Hopalong Cassidy memorabilia might be good quality relative to the junky Chinese toys that are foisted on us today, but the Antique Sage quality metric is an absolute standard, not a relative one.

As a consequence of their low quality materials and middling construction, Hopalong Cassidy collectibles have poor durability as well.  Another investment grade attribute, scarcity, is also lacking due to the mass produced nature of these children’s toys.  The overwhelming abundance of Hopalong Cassidy memorabilia is particularly apparent when compared to lackluster (and falling) demand.

We can check this assertion by performing a quick eBay search, which reveals over 4,600 Hopalong Cassidy collectibles available on the online platform as of the spring of 2018.  That hardly seems scarce to me!

These 20th century children’s accessories do better on the final two traits, portability and zeitgeist.  I would say that Hopalong Cassidy collectibles maybe score a 3 or 4 out of 5 on the zeitgeist scale.  This is good, but not perfect.  For example, I think vintage baseball cards from the same time period (the 1930s through the 1950s) have better zeitgeist.

As for portability, Hopalong Cassidy collectibles tend to be compact and, therefore, score fairly well here.  Of course, this is cold comfort to any Hopalong Cassidy fans who might have had visions of selling off their extensive collections in order to fund a cruise around the world.

My conclusion is straightforward.  In order to be considered investment grade, an antique should ideally score well on all five of the Antique Sage’s requirements.  As a concession to reality, however, I do allow for a mediocre score on any one attribute.  Unfortunately, Hopalong Cassidy collectibles falls well short of these requirements.

 

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