This, ladies and gentlemen, is why I am rich. It’s a thing of beauty – just sit back, and watch. Ha!!! Now that the deal is closed, I can talk about it.
Scrooge McDuck by Carl Barks
You may have noticed, as Ellary emailed me a day or two ago, that we’ve been missing in action. Recently, some odd situations have developed in various markets throughout the world, some as a result of the credit crisis on Wall Street and some just because the inevitable nature of the world is that five-plus sigma events (”black swans”) occasionally manifest. This has happened in the animation world of late, especially in the works of a few key illustrators. I’ve been working with several auction representatives, including the person who headed the comic and animation division at Sotheby’s for decades, to build a collection as part of the e-commerce group’s investment portfolio. Money was reallocated from equities (actually, it was all fresh capital from operations so that’s not entirely accurate but I digress …)
Anyway, we’ve been silently amassing quite a collection by looking for distressed sellers and this morning, we added a jewel to the crown; although not the greatest piece in terms of importance, the sheer brilliance of it makes me laugh. There’s a well known print that Disney produced as a limited serigraph somewhere around 13 or 15 years ago. There are only a few hundred in the world, and most animation shops sell copies for around EUR3,200.00 – or a bit over $5,000 here in the US (for instance, see this shop) (the cheapest I’ve ever seen it is an American-based shop selling a single copy for $1,600); in fact, as a child, I used to have a scan of it on the invoices I would submit to my parents for working in their letterman jacket company making chenille products (25 cents for names, 10 cents for mascots …) It’s from a 1967 special where Scrooge explains inflation, monetary circulation, et cetera to his nephews.
Anyway, this afternoon at 4 p.m. Central Standard Time in Dallas, Texas, an animation auction was held where we picked up a few pieces of things that had some interest to us but weren’t on the primary list. However, one item – the one we’ve been discussing – meant a lot to me. Very few people in the world were paying attention, the condition was excellent, and I kept my mouth shut to everyone but Aaron and my immediate family.
The seller must have needed cash, or have inherited it and simply wanted whatever he or she could get for it because they waived the reserve price.
So guess how much I got it for on the live floor auction? $24 plus an $11 buyer’s premium. I’m not freaking kidding you. That is the favor of God. I picked up the same piece of art that is selling in Europe for more than EUR3,200 and in the U.S. in one store for $1,600 for $35. It’s being batched with our other acquisitions and shipped in the next two weeks. It’s no different than what we do here in the stock market. We don’t buy often, instead piling up cash in hoards until something interesting comes along (Buffett calls it “bagging elephants”) and then we unleash the full fury of our purse. Between Wall Street’s meltdown and our art program, I’ve acquired more stuff than I can keep track of in the past three to four months.
Occasionally, opportunities such as this do present themselves. I’ve watched, and wanted, some of this art since I was 16 years old. The market never fell apart until now. Now, not only do we get the joy of having it hung on the wall, but if and when I ever went to sell it twenty or thirty years in the future, we just proved the old retail maxim about generating huge returns on invested capital: “Well bought is well sold.” Actually, I take the hung on the wall part back because I don’t like having valuables around so much of this will either stay in a safe deposit box in a bank vault or we’ll pay to have it locked up somewhere several states away …
Now, if you’ll excuse me, I might just walk out the back door and scream with joy outside before delving into the newest Tiffany & Company 2008 annual report.
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