Thursday, April 5, 2012

Notes on Collecting

I suspect many readers of this blog are interested collecting books.  I’ve decide to share my thoughts on collecting through a series of essays.  I hope you find it interesting and useful.

I think of their being two types of collectors, which I refer to as enthusiasts and investors.  As the name implies, an enthusiast collects base on his interests.  An investor collects based on the value of the items collected.

I suspect most collectors are enthusiasts.  They started collecting books or other objects because of their interest in them.  Enthusiast collectors run from casual to serious.  Some enthusiasts can become experts in their field.

Investors are interested in items for their value.  Like investors in anything else, they may you can distinguish between traders and buy-and-hold investors.  Traders usually don’t hold onto an item for long.  They are looking for the book, comic, or other collectable that is undervalued (i.e., on sale for a dollar at the thrift store) that they can quickly resell for a better price in another market, hopefully hitting it big occasionally.  A successful trader must know the value of his collectables and have access to retail buyers so he can recognize a bargain and quickly turn a profit.  Buy-and-hold investors take a longer view, believing that their collectables will grow in value over the course of years, or at least hold their value against inflation.  It helps to recognize a bargain, but it is more helpful to distinguish lasting quality from trends that will crash.

Of course, all of these things can overlap.  An enthusiast may put together a collection that eventually becomes very valuable.  His expertise can make him an excellent buy-and-hold investor.  A trader may fall in love with a few interesting pieces that she keeps for her own enjoyment.  Any collector might find opportunities to help a fellow collector and make a few bucks while they’re at it because they’ve developed some knowledge of what other people want and what it is worth to them.

I encourage you to think about your primary motivation for collecting.  Are you an enthusiast?  Do you have a casual interest or a near obsession?  Are you interested in collectables as investment?  Do you want to trade to make some income or are you looking to park you money in something that will grow in value?  Answering these questions for yourself will help you to make better decisions about your collection.