Special Report

Nine Most Valuable Collectibles

1. Classic Cars
> 10-yr. price change: 430%
> One-year price change: 28%
> Most expensive item sold: Ferrari 275 GTB/4 NART Spider (1967)
> Price at auction: $27.5 million

The car category measured by the KFLII rose by 28% in 2013 and by 430% in the 10 years ending June 2013. Both gains were greater than any other subindex over those periods. The market for classic cars does not seem to be slowing either. Two cars sold in different auctions set records in 2013. In July, a 1954 Mercedes-Benz Formula One racer sold at auction for $26.5 million, the highest price paid for a classic car at the time. However, the record was broken one month later, when a rare 1967 Ferrari 275 GTB/4 NART Spider sold for $27.5 million. The Ferrari was believed to have been purchased for between $8,000 and $14,000 in 1967.

2. Stamps
> 10-yr. price change: 255%
> One-year price change: 7%
> Most expensive item sold: Swedish Treskilling Yellow (1857)
> Price at auction: $2.1 million

While stamp collecting is centuries old, buying rare stamps as an investment is a relatively new behavior among wealthy investors, according to a recent New York Times article. In 2010, the world’s most expensive stamp — the Swedish Treskilling Yellow — sold for more than $2 million. According to Knight Frank’s Shirley, “Stamps are getting more publicity and more people are writing about them, helping to push up value,” and attract more investors to the market. This June, however, all records are expected to be broken when a one-cent magenta stamp issued by Britain’s former colonial government in Guiana will be auctioned off. The value of stamps rose 255% in the 10 years ending in June 2013, more than all luxury items except for cars and coins.”

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3. Coins
> 10-yr. price change: 225%
> One-year price change: 9%
> Most expensive item sold: Flowing Hair U.S. silver dollar (1794)
> Price at auction: $10 million

The subindex for rare coins rose 9% for the year ending June 2013. Only the cars subindex rose more over that time. Two sales last year were high points for numismatists everywhere. The first, the Flowing Hair silver dollar, may have been the first metal U.S. dollar coin ever minted. The coin sold at an auction in January 2013 for a record $10 million. In November, a 102-year-old St. Louis man sold a rare U.S. coin collection for a staggering $23 million at an auction run by Heritage Auctions in New York City. Interest in coin collecting may have been stimulated last year by falling gold prices, as investors began seeking additional sources for returns. Interest is also increasing as the economy begins to recover from the recession that began in 2008, Michael Fuljenz, president, Universal Coin & Bullion, told Kitco, a metals news site. Optimism may be warranted: The index has returned more than 225% over 10 years.

4. Fine Art
> 10-yr. price change: 183%
> One-year price change: -6%
> Most expensive item sold: “Three Studies of Lucian Freud” (1969)
> Price at auction: $143 million

Fine art continues to be the most volatile luxury collectible measured by the KFLII, largely because of its subjective nature. While the art subindex fell 6% last year, prices are up 183% over a 10-year period, more than all but a handful of collectibles. The current record holder is Francis Bacon’s “Three Studies of Lucian Freud,” which sold for $143 million last year. In the contemporary art market, investors buy and sell works by so-called Flip Art artists, who mass produce their art often using cheap techniques. Because potentially hundreds of copies of the same piece are produced by the artist, investors can acquire multiple works and buy and sell them through online markets like Artnet, much like they would shares in a public company.

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5. Wine
> 10-yr. price change: 182%
> One-year price change: 3%
> Most expensive item sold: Domaine de la Romanee-Conti (1978), 12 bottles
> Price at auction: $476,280

Prices of investment-grade wine with a documented history of price appreciation tend to be more volatile than most other luxury collectibles, second only to art. This is due primarily to the higher likelihood that tastes will change within the art and wine worlds. While the wine subindex increased only by 3% last year, it increased by 182% over the decade ending in mid-2013. Interest in wine may have increased last year due to a report by Morgan Stanley predicting a global wine shortage, although the argument has since been widely criticized. In fact, despite an overall reduction in vine acreage over the past decade or so, the International Organization of Vine and Wine reported higher production last year, particularly in Spain, France and Portugal. By far, most investment-grade wine comes from the Bordeaux region of France. However, it was a wine from Burgundy that set a new record. Twelve bottles of 1978 Domaine de la Romanee-Conti were sold for $476,280 at a Christie’s auction last year.

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