Welcome to Rare Books Insider for January 6th 2022 – FREE edition.
We use Moneyball tactics to discover undervalued, mispriced, and hidden gems in Fractional Investing.
Rare books in 2021
Rare books continued their sideways trajectory into the last trading week of 2021 on the fractional markets ending the year up around 2%.
The overall rare books market had a banner year, though. I’ve crunched the data from Rare Books Hub, and while it’s a bit messy (it includes some comics and sports cards), it paints a striking picture of an industry in rude health.
Every category they track was up significantly year over year.
- Lots sold at auction – 513,978, up 19% ????
- Average lot amount – $2,810, up 37% ????
- Median lot amount – $314, up 12% ????
- Total spent – $1,444,456, up 65% ????
Ten of the twelve calendar months in 2021 were an improvement over 2020 but December was notably one of the laggards. It’s possible the market has turned, but it’s too early to tell.
For more insight, we’ll need to look at January and February 2022.
January is a slow month on the auction circuit, so I expect to see numbers down from what even December 2021 brought. Anything north of perhaps $60m to $70m will be a sign of continued growth, though.
We’ll want to see numbers approaching $100m in February, which typically sees sales 25% higher than January on average.
Rare Book Hub published the top 500 sales of 2021, which showed a 60% increase overall relative to the 2020 version. Again, worth noting they sort of include comics and sportscards in this, and it’s generally all paper products designed to convey information (so the US Constitution sale takes the top spot).
In fact, the most valuable rare books tend not to be books at all. They’re documents, pieces of books, or correspondence.
Last week in Rare Books
Fractional Secondary Markets
Slight declines last week during a sleepy post-Christmas trading week.
Crickets the last couple of weeks. Nothing of note.
This week and next week in Rare Books
Fractional Market IPOs
One new book to IPO this week from Rally.
- Market Cap: $70k
- Inferred Value: $65k
- Drop: 1/6/22 on Rally
- Recommendation: [INSIDERS ONLY]
Fractional Secondary Markets
Four new books opened to trading on Rally this week, below. All prices current at time of writing (1/4/21).
The most notable change is our revised valuation for the Gatsby book down from $190k to $90k.
I did some research into the book this week, and I discovered that while the book is indeed a first edition, it’s not a first state. The dust jacket on the book is actually second state, which diminishes its value significantly. The difference between the two is a capitalised letter “J” in the name “Jay Gatsby” on the back. In the first state, it’s a lowercase “j”. In the second state, it’s either hand-corrected in ink or fixed in printing. There’s a third state as well, which completely changed the layout of the back of the dust jacket.
A first state edition sold at Heritage in December 2021 for $100k. It wasn’t signed, but it was a proper first state dust jacket, and for this book, the dust jacket is the primary value driver. I’ve reduced the inferred value to reflect a value inferior to the Heritage sale but only just.
I couldn’t find anything interesting at all this week or next. I’m sorry!