Pride and Prejudice... and Profit: Why investors are turning to rare books
After the sale of Jane Austen's novel for 150,000 times its original value, we examine books as assets
Do rare books make good appreciating investments? That's a question we're often asked at Paul Fraser Collectibles - and it was answered definitively a Sotheby's rare books sale in London, last week (Thursday, October 28).
Offering a selection of books amassed by a wealthy collector over 45 years, the auction's catalogue read like a who's-who of literary greats. William Shakespeare, James Joyce and Charles Dickens were among the London sale's highlights.
But a special mention must go to Jane Austen's (pictured top right) ever-popular masterpiece Pride and Prejudice, featuring the complex romance between heroine Elizabeth Bennet and the aloof and dashing Fitzwilliam Darcy.
In the end, the 1813 first edition of Austen's work sold for £139,250. To the uninitiated, paying six figures for an old book must seem extraordinary. So what is it that makes Pride and Prejudice such a good investment?
Well, let's first consider the book's original value. It would have cost 18 shillings in 1813, or 90 pence in today's money. In other words, the book sold for 150,000 times its original price - an average compound annual growth rate (CAGR) of 6.25%.
Based on its past performance, the first edition Pride and Prejudice could be worth more than £229,760 in another 10 years, bringing the lucky collector £9,051.25 each year (allowing for fluctuations in the book's CAGR).
By these figures, the collector will have recouped their investment in 15 years; while the book's value continues to appreciate, irrespective of the economic climate. Another bonus is that rare books are among the least expensive collectibles to store and look after.
Meanwhile, the first edition Pride and Prejudice's value is likely continue to grow for as long the book's historical significance remains. And its value and CAGR could be enhanced as the book captivates new generations of readers.
Given Pride and Prejudice's legacy so far - which includes selling some 20 million copies worldwide, regular placements on 'most loved books' lists and adaptations in TV and cinema - Austin's classic is among the 'surest' investments in the rare books markets.
In fact, it was just one of a number of 'sure thing' investments to appear in Sotheby's sale. Other highlights, as we reported, included a 1922 edition of Ulysses by James Joyce, sold for £121,250, and Charles Darwin's On The Origin of the Species, sold for £127,250.
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By Paul Fraser