This article first appeared in the February 2000, in the Sunday Business Post
Considering the current activity within the equity markets, especially with technological stocks on the Nasdaq, it is easy to forget that long before the performance of firms like Microsoft, Iona and Baltimore Technologies were part of dinner party conversations, the profit motive was a secondary factor in the acquisition process. Factors such as functionality, desirability and beauty took precedence over profit and percentages.
It is now worth going back to the pleasure-versus-profit question in relation to antiques.
The property market has given a steady return on investment of 12 to 20 per cent, depending on where you live, over the past number of years, but the stratospheric price rises that are common among internet stocks at the moment have been seen on numerous occasions in the antiques business.
Consider the Irish artist Jack B Yeats, brother of poet William B Yeats and friend to many literary icons of the era. His style of painting was considered a little inaccessible until the mid-1970s.
But then, for no apparent reason other than that tastes and attitudes had changed, his popularity and value shot through the roof. A fine example of his work was sold at auction by Adams in their Stephen’s Green auction rooms in 1986 for £40,000, and was sold for close to £52,000 at Sotheby’s in London just over a year later.
This was a record price for a word by the artist at the time, and a tidy return on investment. But in the context of today’s property market, and indeed some of the more attractive equities, this would seem rather unspectacular.
But the timescale involved and the prevailing economic climate at the time should be considered. If you consider the fact that good works by the artist can command seven-figure sums when they come to market, the figures speak for themselves.
But what is value in relation to the antiques world? Beauty-which is not a word in the stockbroker’s vocabulary-is, as they say, in the eye of the beholder. It should be the cardinal consideration in determining value, and is quite subjective, regardless of price.
The aesthetic value, coupled with the practicality of the item and its functionality, allied to a little bit of common sense and basic research, are all parts of the decision making process, and thus part of the joy of collecting.
After all, you are going to have to live with your purchase for a couple of years, so obviously you would not buy a Victorian mahogany breakfront library bookcase if you lived in a one-bedroom apartment. Quite apart from the cost, anything from £5,000 upwards, the sheer scale alone should promote a bit of head-scratching. Taking out a Black & Decker is not an option.
But sitting on your Chippendale chair while sipping champagne from you antique crystal flutes can be rewarding when you know that the objects of your desire are increasing in value by the second.
A few caveats here. As with equities, some collectibles do go out of favour from time to time. This is more a feature of the amount of money in circulation and the rules of supply and demand than a crash or the bottom falling out of the market. But it always returns.
Buying at auction can be exciting, but before you purchase you should always check the fine print and conditions of sale. Many prospective purchasers forget or are unaware that the auction houses charge the buyer as well as the seller.
Commission rates vary, and Vat is calculated as a percentage of his figure, but it is wise to add this into your price range before you start shaking your paddle about.
And so to the pleasure-versus-profit question. If you buy what you like and what you can afford, with a good eye and modicum of knowledge, you can have both pleasure and profit without the pain. As with the equities market, it is never too late to start.