How Is Data Shaping The Collecting World?

‘My collection has gone up by another 20 percent.’ It sounds like the kind of statement you’d hear from a seasoned investor tracking the performance of their investment portfolio. In fact, it’s my 12-year-old son trying to justify the pocket money he’s spent funding his collection of Pokémon cards. 

Sadly, he’s not quite a collecting-card millionaire yet – his most valuable card is only worth about 20 quid – but he’s not wrong; the value of his modest collection has increased by 20 percent. He has the data to prove it. All his cards are logged on an app tracking the sale of Pokémon cards on eBay, which instantly updates the value of his portfolio when one of the cards he owns is traded. It sounds like overkill for a kid’s hobby, until you realise that the rarest cards can fetch millions. My son’s data obsession highlights a trend that has developed over the past decade, the growing focus on the investment side of the equation, particularly with younger collectors.

Why Is Data So Important To Collectors?

Motivations

Each year, in a former role as editor of The Wealth Report published by Knight Frank, I surveyed global wealth advisors about their clients’ activities and investments. One of the questions concerned the motivations behind their collecting activities. All told, the primary motivation was ‘joy of ownership’, but over the years ‘return on investment’ started to catch up. For respondents from Asia, whose wealthy clients tended to be younger, it took the lead several years ago. In part, that reflects a more transactional society, but part of the shift lies in the greater access to value data that the internet provides, my son’s Pokémon app being just one example. 

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Quality Counts

Value data depends on the quality of the inputs (which can include auctions, private sales and professional valuations). The higher transaction volumes in areas such as watches and wine are always going to offer more stable, dependable results than smaller markets, though factors such as condition are relevant. Those Pokémon cards can only be accurately valued once professionally graded. A card, even a very rare one, awarded condition 1 is worth far less than one achieving an elusive 10, which not even cards straight out of the pack are guaranteed to score. 

Investment Grade

Each sector has its own quirks, meaning that many data sources online are highly specialised. Art Market Research, for example, produces a range of indices covering a host of collectables, including works of art, jewellery, furniture and even handbags. Subdial and Chrono24 offer indices that focus purely on watch values, transforming the secondary market in the process – you can instantly see whether that Rolex Submariner Date you’re tempted by is priced fairly.

Cars are well catered for with the Historic Automobile Group International (HAGI), insurer Hagerty and car dealer Kidston all producing their own indices; Rare Whisky 101, Liv-ex, Wine Owners and Cult Wines are just some of the sources for alcohol collectors. Although these indices indicate the broad direction of travel for a particular asset class, anybody using them as an investment guide needs to understand what they’re tracking. Take HAGI, for instance: its index records the performance of about 50 of the world’s most desirable investment-grade cars, so it’s not a great guide to the value of your old MG or Austin 7. 

What You Love

Where there isn’t data for specific assets, such as a single artwork, indices can still be used to follow the rise or fall of specific artists and genres, highlighting areas worth looking at – female surrealists such as Dora Carrington are having a moment right now – but the lower volumes mean the numbers need treating with more caution. Even the most feted artists have their off days at auction, so don’t rely solely on past performance.

And finally, no index includes the costs of ownership – storage, insurance, maintenance – or buying and selling fees, which can be substantial at auction. I have a feeling my son’s 20 percent bonanza would quickly melt away if he tried selling his prized collection. But if you buy what you love and what makes you happy, then you’ll have made the best investment of all.