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We use Moneyball tactics to discover undervalued, mispriced, and hidden gems in Fractional Investing.
The rare books asset class broke even on the year last week after a long recovery since spring 2021.
Last week’s performance
Fractional secondary markets
Two books traded last week on Rally: Fitzgerald’s The Great Gatsby 1st edition (+19.1%) and Carroll’s Alice in Wonderland 1st edition (+7.5%). Gatsby is still around 15% undervalued whereas Wonderland is now 143% overvalued.
54 auctions sold $54 million last week.
The first printing of the final text of the US Constitution sold on Sotheby’s for $43,173,000 on 18th November 2021. A group of crypto enthusiasts made history raising $49m to buy the document, but they were outbid by Ken Griffin, CEO of Citadel. Griffin aroused ire in the online investor community in January when journalists discovered the trading app Robinhood sold trading data to Citadel.
Thanks to this outstanding sale, the average lot sold for $4,000 last week, which is a significant increase relative to what we typically see.
The Declaration of Independence IPO’d last week on Rally and closed out its $2,000,000 round. We put the inferred value of this iconic document at around $1m based on two sales of identical items in 2021.
A quasi-book was another large ticket item, as Heritage Auctions held an auction of space memorabilia. A micro-form version of the King James Bible sold for over $52,500. It was one of 100 gold-encrusted pendants made to commemorate Apollo 1 astronaut Ed. White II. White II had wanted to take a micro-Bible of his own on his space trip but had perished in a fire on the launchpad. This pendant was flown to the Moon in 1967 with Astronaut Edgar Mitchell.
There were also some notable lots to come out of last week’s Leslie Hindman Auctioneers auction:
- A first edition of The Federalist Papers sold for $175,000 (3x estimate). The hit musical Hamilton has brought renewed interest to The Federalist Papers recently. They also of course are still a major source of debate today about the role of the Constitution, and thusly the sale may still be undervalued.
- A copy of James Joyce’s Ulysses illustrated by French Master Henri Matisse sold for $23,750 (2x estimate). This was one of only 250 copies with Matisse’s illustrations, and the artist controversially never read the book. The illustrations were based on Homer’s Odyssey.
- George Washington’s writings (edited by Jared Sparks) sold for $20,000 (2.5x estimate). President of Harvard at the turn of the nineteenth century, Sparks edited Washington’s writings extensively, changing entire sentences at times. This lot includes original letters and documents from other framers of the Declaration of Independence. Sparks’ cavalier approach to editing does blemish the value of these works.
- First Editions of Dickens’ Christmas Books sold for $13,750 (2x estimate). It included his lodestar, The Christmas Carol, hence the sale price.
- Several Lincoln autographs as well as a first edition of Chopin’s The Awakening sold within their five-figure estimates.
This Week & Next Week
eBay has some fascinating auctions which may rival the auction houses. Many are of 16-17th century books.
A Very Good / Good 1st UK edition Harry Potter inscribed by the author is available for $14,000.
A 1st edition Wizard of Oz is also listed for $150k. A pre-production copy, it’s from the oldest-known batch of this book. Oz books overall have tripled in the last decade, and this was valued at $90k in 2001.
The same auction lot that included the Constitution includes several other American founding documents, such as multiple varieties of the Declaration of Independence, various state constitutions, abolitionist documents, Indigenous people constitutions, and even other forms of the Constitution itself. These will be up for auction this week.
The first week of December will be a very significant auction to watch: Heritage Auctions will be selling first edition rare books, many of which are also sold on Rally. Among these will be the first Harry Potter, the Lord of the Rings trilogy, the Chronicles of Narnia set, The Great Gatsby, Jane Austen, Ian Fleming, and Stephen King. Many of these titles are on Rally and eBay. We’ll be tracking these as the auction progresses.