Eric wrote:

> > > How do you know the books and antiques you trade in will
> > > become or continue to be valuable, any more than other
> > > financial investments?

I replied:

> > I don't.

Eric replied:

> Then it is not assumed to be any better than the stock market
> or bonds, nor easier to learn about to avoid losing one's shirt.

That's right. I never said it was better in any objective sense. It's better
*for me*, because I happen to prefer studying and gaining expertise in that
area to paying a financial manager or trying to gain expertise in the areas
that financial managers deal with.

Nor did I say it was easier. There is a huge amount of work involved in
gaining expertise even in one small area of book- or antique-collecting. I
happen to enjoy that kind of work, so I don't mind.

Nor did I say one couldn't lose one's shirt. I won't lose my shirt because I
only put surplus money into it, money that's left over once other needs have
been taken of, but if someone staked their all on antiques or rare books
they could be the victim of theft or fire (unless they had appropriate
insurance and safeguards - which all costs money - and even then things can
go wrong) or misjudgement or fraud or volatile changes in the market.

> In fact, as you say, fund managers are paid to worry about that
> for me.

And what about when it doesn't work out? What about when you end up paying
them to lose your shirt for you?

> fund managers' commissions of say 1.5%, certainly are
> better for customers trying to cash in, than paying someone
> one third of the value of what they are trying to sell.

Or a half, or two thirds, or 90%. Or more. You'd be amazed at how objects
can be marked up as they change hands!

On the other hand, if you have a good eye and you can pick out the right
things, or if you know that stuff which is worth very little on one market
fetches a high price on another market, you can do very well.

> It is a risky business dealing in things that most likely
> won't sell, but it is certainly no way for customers or
> the ignorant to make money.

If customers have a good eye and a knack for buying at a good price what
they buy may well sell somewhere down the line for a very good price. Don't
forget that dealers also have to buy what they sell, so at that end of the
stick they, too, are customers.

But if you are ignorant and you have some extra money and you want to take a
risk with it in hopes of getting a big return financial managers are
undoubtedly a much better way to go. If it works out, well and good. You get
a good return with little or no effort. But if it doesn't work out all you
have to reflect on is that you paid someone else 1.5% (or whatever) to make
mistakes on your behalf. All I'm saying is that that's something I won't be
doing again!

--
John
http://rarebooksinjapan.com