Oz Books Newsletter #2 ( April 2008)

Is it a good idea to invest in Oz books ?

In these economically uncertain times, I have been asked whether Wizard of Oz books are a good investment. I am not a financial advisor and would not presume to give an investment advice but as someone who has been actively involved in rare books, I would like to share my thoughts on this subject.

The value of rare Wizard of Oz series books obviously depends on many factors. When was the book published? How many books of that particular edition were published? What is the condition of the book? Does it have the dust jacket? How popular the book is in the series?

The answers to all these questions are very important in identifying the current and future value of the Oz series books. Just like other collectibles, the Oz books may or may not increase in value over time due to many factors. However, some financial analysts suggest turning to collectibles, such as rare books, during economic downturns. The reason? Collectibles can act as a hedge against inflation, and in addition, offer a very important intangible benefit that most other types of investments do not offer – personal enjoyment.

Many investors, especially now, are attempting to diversify their assets. The point of diversification is to provide shelter from market storms. In January 2008 the U.S. stocks lost 6%, foreign markets fell 10% and emerging markets dropped 13%. So where did a lot of people turn for safety? Gold. Many analysts are advising the investors that gold will make a portfolio safer because it does well when the U.S. stocks do poorly. However, those investors who bought gold during the 1979-1980 bear market know that the price of gold went way down before going up. Moreover, those investors who bought gold in late 70s/early 80s only now are at the point they were when they originally bought it, and that is with price of gold jumping now to over $1000 an ounce!

I began to wonder: how does the value of gold over the years compare to the value of Oz series books?

I recently evaluated prices that were realized from the November, 1978 auction of The Schiller collection (Swann Galleries) and a few recent auction sales of Oz books. The main reason I chose to compare prices from these two sources is because one can assume that what is advertised by both accurately represents the edition, condition, and other attributes of actual books. I intentionally did not utilize eBay or other similar auction prices because they may not accurately represent the true values of the books since both sellers and buyers may not be sufficiently familiar with the complex process of Oz series books’ identification.

Below are a few examples:

Example 1

From The Shiller collection (1978) Item #196. Emerald City of Oz (1st edition, 1st state) in original pictorial dust jacket. Price realized: $375 + commission.

Same 1st edition title in dust jacket sold in 2004: $9975 + commission. Link to the photo of the actual book with dust jacket from previous Newsletter.

Example 2

From The Shiller collection (1978) Item #197, “ Emerald City of Oz” without dust jacket, sold for $200.

On November 9, 2006, PBA Galleries sold identical book for $1035 (lot 343). On February 28, 2008 Bloomsbury auction sold similar copy for $1,100.

Observation

In example 1 above the price of the book increased over 26 times in 26 years.

In example 2 above the price of the book increased over 5 times in less than 30 years.

Note: In my Newsletter No.1, I provide analysis of the effect of dust jackets in Oz series books. The same analysis holds true for the Example 1 above.

In my opinion, the value of Oz series books is going up, and this trend should continue because the demand is greater than supply. Initially, with the advent of the Internet in the 1990s and the presence of personal computers in almost every household, the Oz books' market changed due to the ease of search and selling capabilities. When ebay and other online book auctions appeared, the availability of the Oz books increased somewhat. That development drove the prices of Oz books down because of the increased availability. However, that is no longer true, and it is getting harder and harder to find any collectible Oz series books. Four or five generations passed from the time the first Oz books were published, and there are fewer and fewer people left who were fortunate enough to inherit these books from their parents or grandparents.

In conclusion, I think that I must also tell you that the true value of the collectible Oz series books may be difficult to determine as it depends on many factors. It is a known fact, for example, that Walt Disney (watch 10 minutes episode) was a big fan of Oz series books and was trying to produce a few Oz series into movies, but it was too expensive at the time. After the success of Harry Potter movies, I would be curious if Walt Disney’s dreams will be realized by making the Oz books into movies by others. If that were to happen, the value of the Oz books will increase substantially, similar to the value of other books that were made into the movies.

Speculations aside, however, it is important to know that the rare books market is fraught with uncertainties. It is crucial, therefore, to know and understand what you are buying, or have someone who is honest and knowledgeable to help you choose the book that is worth your money. And always remember one thing that the Oz series books collection will always provide – years of enjoyment and, if approached properly, shelter from the market storms!



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