The Minor Arts – Beyond Painting & Sculpture

The Minor Arts - Beyond Painting & Sculpture

When I talk about investing in art, most people assume I’m talking about paintings and sculpture.  And while these categories of art have been the traditional focus for artists, art critics and wealthy art collectors for centuries, I generally find them to be the least interesting type of art from an investment standpoint.  For one thing, they tend to be relatively large, requiring a great deal of space to properly display.  In addition, because paintings and sculptures are intimately associated with the idea of art in the public mind, the field has largely been scoured clean of investment bargains.

When I write about art on the Antique Sage website, what I’m usually referring to is a relatively obscure category of art known as the “minor arts”.  The minor arts include jewelry, silverware, objets d’art, coins, miniature sculptures and carvings – in short, anything excluded by the “major arts” such as paintings, prints and monumental sculptures.  Throughout history, academia has had the tendency to diminish the importance of the minor arts while endlessly analyzing and discussing the major arts.  I think this dogma has been a great disservice to the fields of both art history and art connoisseurship.

For example, everyone has heard of Leonardo da Vinci’s masterpiece painting, the Mona Lisa.  It has been endlessly mythologized in popular culture, such as Dan Brown’s bestselling book “The Da Vinci Code”.  It has also been over-analyzed by smitten art historians for centuries.  In fact, the very first art historian, Giorgio Vasari, breathlessly wrote about the Mona Lisa in his groundbreaking 16th century book “The Lives of the Most Excellent Painters, Sculptors and Architects”.

Now there is nothing wrong with paintings in general or the Mona Lisa in particular.  It is a very fine late Italian Renaissance painting created by a renowned artist.  But does it really deserve its reputation as the single greatest painting ever created in human history?  And, by the same token, is the Mona Lisa really better than every single one of the minor arts ever created?

Let’s examine one specific example of the minor arts as a point of comparison.  The photo accompanying this article shows the Crown of the King of Bavaria – one of the Bavarian Crown Jewels.  It was commissioned for king Maximilian I Joseph of Bavaria in 1806.  This magnificent work of minor art was designed and crafted in Paris in 1806-1807 by the very best jewelers of the Napoleonic court, including the most renowned goldsmith of the time, Martin-Guillaume Biennais.  The result was a magnificent gold and silver crown encrusted with countless diamonds, rubies, pearls and emeralds.  And until it was removed in 1931, this royal regalia also held the stunning and historically important Wittelsbach Diamond, a 35.56 carat, deep gray-blue diamond.

And yet, few people have ever heard of the Crown of the King of Bavaria.  It simply doesn’t show up on society’s cultural radar.  Yes, the Crown of the King of Bavaria is one of the minor arts, but is it really any less impressive than the Mona Lisa?  I think the answer is no.  They are both phenomenal pieces of art, even though one is a painting and the other is a piece of jewelry.

But they are also very different works.  So in a very real sense I don’t think it is even possible to directly compare the two works.  It is like comparing apples and oranges.  In the final analysis, I believe the Crown of the King of Bavaria is every bit a masterpiece for the ages as the Mona Lisa, albeit crafted from gems and precious metals instead of paints.

Now, none of us are likely to acquire ownership of either a Leonardo da Vinci painting or the Bavarian Crown Jewels anytime soon.  Instead, most people looking to diversify into art or other tangible assets are probably interested in spending more modest sums of money – usually less than $10,000 per item.  Luckily, this is the value region where the minor arts absolutely shine.  In contrast, choices in the major arts – paintings and large sculpture – are somewhat constrained in these lower price ranges.

The minor arts – coins, miniature sculpture, jewelry, silverware, objet d’art and the like – have, in my opinion, been perennially overlooked in not only academic settings, but also the art marketplace.  Normally this oversight would be a mildly thought-provoking, but ultimately unimportant historical footnote.  However in this case, I think whoever buys the right minor arts today – for ridiculously cheap prices, I might add – will make a lot of money tomorrow.

Art in general is an intimidating field, requiring a certain amount of technical knowledge to properly navigate.  And most people don’t have a great understanding of the traditional art market, much less the minor arts market.  There is a persistent myth that you need to be a millionaire in order to invest in art.  But, the reality is that the minor arts are far more budget-friendly than most people realize.  As little as $100 is enough to start investing in art.

And this is the real reason I started the Antique Sage website.  I firmly believe that the minor arts have a greater potential for future price appreciation than any traditional asset class at this juncture in history.  The minor arts may be small, but, as the saying goes, good things come in small packages.

Brazilian 12 Guilder Gold Coin Restrike from 1954

Brazilian 12 Guilder Gold Coin Restrike from 1954
Photo Credit: Atlas-Numismatics

Brazilian 12 Guilder Gold Coin Restrike from 1954

Buy It Now Price: $604 (price as of 2017; item no longer available)

Pros:

-Here is an unusual and captivating Brazilian 12 guilder gold coin restrike from 1954.  The original coins were minted in 1645/46, a period when the Dutch controlled part of the Portuguese colony of Brazil.

-This Brazilian 12 guilder restrike is a klippe, or square, coin that measures 21.6 mm (0.85 inches) by 21.7 mm (0.85 inches).

-We do not know the fineness of these gold restrikes, but it is certain that they are very high purity.  I would guess they are .900 fine gold or better.  Given that this particular coin weighs 7.74 grams (0.2488 troy ounces), we can infer that the melt value is at least $289 with spot gold trading at $1,292.  This means the restrike is selling for a moderate 109% premium over bullion value.

-The obverse features the roman numerals “XII” (for 12 guilders) and “GWC” (for Geoctroyeede West-Indische Compagniev), while the reverse has “ANNO BRASIL” and the date, 1645.

-The Netherlands seized a large portion of Brazil from the Portuguese between 1630 and 1654, in an attempt to exploit the region’s valuable sugarcane plantations.  The coastal city of Recife became the capital of Dutch Brazil during this period.

-The original Brazilian 12 guilder gold coins were struck by the Geoctroyeede West-Indische Compagniev, or Dutch West India Company, in the Pernambuco region of Brazil from late 1645 into 1646.  The coins were made with West African gold delivered to the port of Recife aboard the Dutch galleon “Zeeland”.

-The original Brazilian 12 guilder pieces, along with their very similar 3 and 6 guilder counterparts, are among the rarest of Brazilian coins.  Although it is estimated that between 1,500 and 2,000 of each denomination were struck, almost all of them were subsequently melted down or lost.  As a result, there are only around 50 to 60 examples of all three denominations still extant, and perhaps 15 to 20 of those are part of museum collections.

-The Brazilian 12 guilder gold coin featured above was restruck in 1954 during the Exposition Numismatic in Sao Paulo in celebration of the city’s 400th anniversary.  It is prominently labeled “COPIA” (copy) on both sides so that it cannot be confused with an original specimen.  It is also stamped “S. PAULO IV CENT.”

-While the mintage of this Brazilian 12 guilder restrike is unknown, a clue is provided by the fact that they have all been individually serialized (numbered).  This specimen is number 119 and I have not seen any that are numbered above 200.  As a result, I would guess that the total mintage of these restrikes is very low – probably between 200 and 300 pieces.

-Two other examples of this Brazilian 12 guilder restrike sold at auction recently.  The first brought $800 plus an 18% buyer’s premium on October 25, 2012.  The other sold for $850 plus a 17.5% buyer’s premium on May 1, 2013.  These auction results compare very favorably to the $604 asking price for this specimen.  It is also noteworthy that both of those auction sales were made to dealers, indicating that they believed the coins could potentially be resold to collectors for even higher prices.

-There is a strong relationship between the collector demand for a nation’s coinage and its GDP.  Currently, Brazil is one of the largest emerging market countries, with a nominal 2016 GDP of nearly $1.8 trillion.  Therefore, this Brazilian 12 guilder gold coin could serve as a great investment substitute in place of Brazilian stocks in your portfolio.

 

Cons:

-An original specimen of this Brazilian 12 guilder gold coin would be vastly more valuable than this restrike.  In January 2011, an original example sold for $54,625 at auction, over 90 times the asking price of this restrike version.  However, these restrikes are now over 60 years old in their own right and are gradually coming into their own as desirable specimens.

-This gold coin is highly illiquid, a common trait among fine art and antiques.  I highly recommend that you hold this coin for many years if you decide to buy, otherwise there is a high probability that you will take a loss on any resale.

Stacking Silver, Semi-Numismatic Coins and Gresham’s Law

Stacking Silver, Semi-Numismatic Coins and Gresham's Law

One of the great trends in tangible asset investing today is stacking silver.  Stacking silver is simply the process of regularly buying physical silver in order to hedge your investment portfolio against inflation, financial panic or other economic dislocations.  However, there is a something of a controversy in the silver stacking community.  Which is better to buy: low premium, bullion-oriented silver or higher premium silver that has some numismatic or collector’s appeal?

This might seem like a contradiction at first.  After all, if one is “stacking silver”, isn’t the entire purpose to get as much silver as possible for the lowest possible cost?  Well, yes and no.  Pursuing a weight only approach to silver buying is certainly a legitimate strategy.  And the simplicity of such an approach is quite appealing.  But it isn’t the only way to stack silver, or necessarily even the best way.

Like many things in life, there is no clear delineation between silver bullion and silver numismatic coins.  Instead, there is a continuum, or range between the two extremes.  On the purely bullion side reside most modern struck and extruded silver bars that perhaps trade for only a few percent over the spot price.  Generic silver rounds, struck in a variety of different sizes and styles by private mints, also fit into this category.

On the coin collector’s end of the spectrum are old U.S. and foreign silver coins, some of which trade for premiums of many hundreds or even thousands of percent over spot.  Of course most silver stackers don’t bother with these pieces because they have far too much numismatic value in relation to the silver they contain.  But there are a plethora of semi-numismatic silver coins (and even bars) that derive their value primarily from their bullion value while still retaining some collector’s premium.

90% U.S. silver coins are the poster child for semi-numismatic silver.  Struck from the 19th century until 1964, 90% U.S. silver consists of dimes, quarters, half dollars and silver dollars.  Silver dollars always command relatively high premiums while half dollars have more modest premiums.  Silver dimes and quarters have the lowest premiums of all, although they are usually still significantly higher than no-frills silver bullion.  90% U.S. silver coins are readily available in $100, $500 and $1,000 face value bags.

Another popular category of semi-numismatic silver coins is modern bullion coins struck by government mints.  These include well-known coins like American Silver Eagles, Canadian Silver Maple Leafs, Austrian Silver Philharmonics, Chinese Silver Pandas and British Silver Britannias.  Although these coins were all originally intended as bullion pieces, a vibrant collecting community has grown up around them over time.  Third-party certified, or slabbed, specimens in very high grades (MS69 or MS70 – essentially flawless coins) are particularly coveted in the marketplace.

Even silver bullion bars can, counterintuitively, sometimes garner high premiums.  Vintage poured silver bars, in particular, are great examples of this phenomenon.  Although initially treated as pure bullion pieces, vintage poured silver bars have evolved into a very hot corner of the market, with premiums sometimes reaching as high as 100% for especially desirable specimens.

All of this interest in poured silver bars has created a renaissance in its production.  After having been largely discontinued due to the labor intensive nature of casting compared to struck and extruded bars, poured silver bars have made a comeback as a specialty, “luxury” bullion product.  Smaller companies, like Yeager’s Poured Silver, have spearheaded the revival of this exciting form of semi-numismatic silver bullion.

But the real question most people have is “What is a better investment?” – pure bullion pieces or semi-numismatic silver?  In one sense, I don’t believe there is any “wrong” way to pursue stacking silver.  If you like it, buy it.  Any type of silver that you purchase will help you diversify out of overvalued paper assets and give your investment portfolio some much needed tangible asset exposure.

However, I have always been partial to incorporating an element of numismatic value, no matter how small, in my own silver stacking.  This is because semi-numismatic pieces grant otherwise ordinary silver the added benefit of optionality.  Optionality is any aspect of an investment that you don’t pay much money for, but has the potential to generate outsized returns.  Semi-numismatic silver might cost an extra 10% or 20% in premiums over purely non-numismatic silver bullion, but it also has the possibility of eventually selling for premiums of 50% to 100% over spot.  That optionality could be very powerful indeed, granting a “multiplier effect” to your silver holdings.

Generally speaking, I like incorporating additional ways of making money on my investments versus fewer ways.  In the case of stacking silver, exposure to the spot price of silver is one way of making money.  I like that.  But the optionality of semi-numismatic premiums is a second, completely distinct way of generating returns.  And, provided I don’t pay too much more for the opportunity, I like two ways of making money on an investment better than just one way.

One of the negative aspects of semi-numismatic silver is that it is usually less liquid than straight bullion, meaning it is harder to sell on short notice for its full value.  Many silver stackers who pursue a weight-only, non-numismatic approach do so because they believe it will be difficult, if not impossible to realize high premiums on semi-numismatic silver bullion in turbulent conditions.  This period of expected future economic crisis is often referred to in the silver stacking community as the “sh*t hits the fan” moment.

However, in my opinion, if you’ve constructed your portfolio properly, you won’t be selling your silver in these circumstances.  There is an economic concept known as Gresham’s Law, which famously states that “bad money drives out good”.  This dictum is usually applied to circulating coinage when debasement occurs.  If there are two different coins with the same face value, and one contains precious metal while the other doesn’t, the baser coin without any precious metal content will circulate while its more intrinsically valuable counterpart will be hoarded.

This exact situation was experienced in the U.S. after it ceased using silver in its circulating coinage in 1964.  Within a few years, it was almost impossible to find silver coins in circulation; their copper-nickel replacements freely circulated while the good silver coins were hoarded.

I believe that if there is ever a major financial panic in the future, Gresham’s law will kick in with a vengeance.  If you have been stacking silver before such an event occurs, then congratulations.  Your stash of silver will be worth much more than it was before.  But you probably won’t have to worry about panic liquidating your semi-numismatic silver pieces at low premiums.

Instead, you’re much more likely to use your credit card to spend virtual, rapidly-depreciating fiat dollars (or some other national fiat currency) for necessary goods and services.  After all, fiat currencies will be the “bad” money according to Gresham’s Law, while your silver stash will be the “good” money.  And the good, silver money will be the very last thing you’ll want to sell in such a situation.  Even if the banks are closed because of the panic and credit and debit cards don’t work, you’ll still part with any physical cash you have before you’d consider bargaining away your precious silver.

In the end, I think investing in silver via semi-numismatic coins and poured bars is just as good a way of stacking silver as buying non-numismatic bullion bars, rounds or coins.  Even if there is a future financial panic, Gresham’s Law dictates that your silver hoard is one of the very last investments you’ll liquidate.  There is a high probability that you will only willingly part with your silver once any financial panic has subsided and premiums for semi-numismatic coins have normalized.  But, as always, there is no wrong way of stacking silver.  In my opinion, any silver is good silver.

Bog Oak – The Rarest Wood in the World

Bog Oak - The Rarest Wood in the World

Exotic and elegant woods are a staple material used in fine antiques.  Brazilian rosewood, Cuban mahogany, and English walnut, among others, all figure prominently in antique furniture and objets d’art.  Fine woods can substantially enhance the desirability of an investment grade antique.  So I was delighted when I stumbled across bog oak during my research, the rarest wood in the world.

Bog oak is a catchall name for partially fossilized wood.  Although most of this wood, as its name implies, originates from oak trees, partially fossilized yew or pine wood is also considered bog oak.  The origins of this ancient timber are a mysterious, wonderful thing.  Thousands of years ago, swamps, fens and bogs were often surrounded by huge, primeval forests full of massive oak trees.  Due to storms, floods or other natural events, these trees would sometimes fall into these adjacent wetlands.

Oak trees are rich in chemical compounds called tannins or tannic acid.  Tannins are yellowish to brownish in color, astringent, and acidic in nature.  Tannins are renowned for their powers of preservation.  In effect, tannins have the ability to mummify organic matter when present in high concentrations.

Wetlands containing large numbers of dead oak trees naturally become saturated with tannins over time.  This is the reason the mummified remains of ancient European bog bodies like Tollund Man are discovered thousands of years later in excellent condition.  In fact, tannins were originally used by ingenious ancient people to tan animal hides.  Words like tannins, tanning and oak tree (tanna in Old High German) have shared etymological origins, underscoring their close association over the centuries.

Any tree that fell into a bog and sank quickly had a tendency to be preserved in the tannin-rich waters.  However, some types of wood were preserved better than others.  Oak is already an incredibly tough and rot resistant wood.  And, because it naturally contains a large amount of tannins, oak gets a double-shot of tannins from the bog water.  These circumstances are ideal for preserving wood, eventually turning it into bog oak.

Over thousands of years, wetlands gradually fill in with organic matter.  This process chokes off any oxygen from the submerged tree trunks, thus limiting bacterial activity.  During this extended period without rot, iron and other minerals leach out of the surrounding soil and into the bog water.  They then bind with the tannin saturated wood and displace some of its organic material.

As a result, bog oak gradually darkens over the millennia, slowly turning from a light, golden brown wood into a lustrous, almost ebony-black color.  This color change is just a guideline however.  The tree species and local bog conditions can all significantly impact the final color of a piece of bog oak.

In addition to taking on a dramatically deeper color, bog oak also becomes extremely dense.  This is driven by the wood’s partial mineralization, which also renders it almost rock-hard.  While bog oak’s physical properties vary considerably from specimen to specimen, it is generally very tough on cutting blades due to its excessive hardness.

 

Bog Oak Or Morta Woodworking Blanks for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Most bog oak comes from the British Isles, Northern Europe or Russia.  But the most famous deposits are the peat bogs of Ireland and the fens of East Anglia, in the southeast of England.  While bog oak can form over as little as 1,000 years, it can also be almost unbelievably ancient.  Specimens are regularly radiocarbon dated to between 2,000 and 5,000 BC.  This means some trees were alive during the building of the Egyptian pyramids or Stonehenge, at the very dawn of human history!

The discovery and milling of bog oak is almost as miraculous as its formation.  For hundreds of years, farmers in marshy areas of Northern Europe, Ireland and England have discovered ancient tree trunks when plowing their fields.  In many instances these logs were cursed as a nuisance.  Most farmers simply burnt the strange black logs or left them to rot once they were excavated, but a few made the effort to harvest the strange, velvety black timber.

Perhaps the wood’s greatest drawback is that it has only traditionally been available in small sizes and very limited quantities.  Once an ancient log of bog oak has been uncovered in a field, time is of the essence.  The wood will break down quickly upon exposure to air if it is not quickly harvested.

First, all the outer, rotten wood must be carefully stripped away.  The logs are usually greatly reduced in diameter by this step.  Then the logs must be quarter-sawn before being carefully seasoned, often for several years, to avoid warping.  Seasoning can be accomplished either via air drying, which only works for exceptionally well preserved specimens, or kiln drying.  Kiln drying is faster than air drying and can give better results, but requires tremendous experience and control.  The larger a piece of bog oak, the harder it is to season properly.

Bog oak has been extensively used in European luxury goods for centuries.  It was highly prized for fine woodworking – inlay, detail-work and turning – due to the fact that it is the only native black European wood.  Bog oak was also in particularly high demand in the Victorian age for black mourning jewelry.  The black pieces of chess sets, traditionally fashioned from ebony, were occasionally made from this rarest of black woods.  Bog oak was especially prized for fine smoking pipes, where it was called “morta”.

 

Bog Oak Or Morta Smoking Pipes for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Today, bog oak is used for small sculptures, objets d’art, jewelry, fountain pen blanks and other small woodworking projects.  As far as I can tell, Bog oak is the rarest wood in the world.  It is beautiful, durable and thousands of years old.  And yet, ironically, it seems to be little known and substantially undervalued.  Don’t overlook this incredible, exotic black wood when looking to invest in antiques.