A WORD FROM OUR CHAIRMAN
Insider 36 - Spring Issue
Today is postponed,
Tomorrow might never be the same for the
world and for collectables
Dear Friends and Clients,
In my last introduction for our Winter Insider, I was talking about “greenshoots” and wondering if “the capitalist system was starting a crisis”. The greenshoots are still there and have even survived a late spring blizzard! Collectables, being mostly unchanged or slightly up in many areas, are doing massively better than any other asset class where the going rate seems to be, at the time of writing,
30% down. And when all the Snow Whites we are emerge from confinement, we will live in a very different world where the ultra-liberal pro-globalisation rule-book might have been thrown out of the window in many places. More on that later and what it could mean for collectables.
Honestly, this is probably the toughest time to put your thoughts down as the situation is so fluid that it changes every day. At the time of writing almost four billion people on the planet are confined at home. Who could have imagined that, even a month ago? Of course as a CEO, despair is not a feeling I can afford to indulge in for more than a few moments daily, when I watch the wave of people isolated from their families in need of resuscitation beds.
I have decided in the end to try to be forwardlooking, thought-provoking, and share some of these thoughts. Hence the cover of the Insider you have in your hands which is visually striking and delivers the only message audible today: this virus will be defeated like all others before it. This cover is made by a very talented Spanish artist, Guillermo Ariete, who has captured very well the journey of Spink through three and a half centuries. I also contacted my friend Professor Guy Dutau, to write a fascinating article which is a perfect bridge between the medical world and the collectables world. In addition, as Spink was forged by both the black plague and the great fire of London in 1666, we had to give you transcripts of the royal edict of the time. Then, the confinement was harsher. Suspected
patients were locked up for 40 days in a wooden shed outside the city with a white cross on the door and the compulsory inscription “Lord have mercy upon us” which by Royal Decree had to be in capital letters.
Don’t ask me why the capital letters requirement! It is my strongest belief that the new technologically driven Spink will be forged by this pandemic if we are allowed to continue to operate online. As our Chinese friends know very well, as transcribed in the two characters to write the word ‘crisis’, one means danger, the other opportunity.
Yes the cost in human lives, especially those of the generation who built this world for us, will be dreadfully high. This is well covered in the news and I do not wish to dwell on the sanitary crisis, even if it affects me very much. We need to look for the day after. Beyond Covid-19 I am very worried by the economic victims who will struggle to find again employment, the people whose isolation has been overwhelming and created psychological problems, the marriages and families put under the test of close and permanent proximity. As one friend of mine put it, tongue in cheek, the miracle vaccine or antibodies test, enabling us to leave home again, will not be found by a doctor but almost certainly by an exhausted parent who wants the kids back to school!
At Spink we have strived to operate (whenever feasible) remotely and bring auctions to you even if it was obviously behind closed doors, but we will always try to have an auctioneer on the rostrum even if bidding can only be online, because it provides the much needed distraction in these dire times. And my promise to staff at the outset of the crisis is that I will do everything in my power to ensure no job is lost in this crisis, no one is left behind or alone. So if I paraphrase the 17th century royal decree, may the Lord have mercy on us so I can deliver on that promise. In the end we must remember, and Spink after all is “where History is valued”, that previous generations had to do extraordinary things to defeat adversity; our generation is only asked to Stay Home and follow the social distancing rules. Maybe not worthy of a Victoria Cross just yet.
ACTIVITY ROUND UP
It is difficult to know how to sum up the first
three months of 2020 – as always we had a hectic start to the year with NY INC and our Numismatic Collector’s Series sales there, ably handled by our London team, plus the York Stamp and Coin show.
Our sale of Banknotes, Bonds & Shares and Coins of China and Hong Kong went ahead at the start of January, despite news of the new coronavirus filtering through. However I am pleased to say that our office there is still going strong, and sales will resume on 10th–11th May with The Numismatic Collectors’ Series sale (barring a second wave of Covid-19 in Hong Kong) which you can read more about in the following section.
January also saw our extraordinarily successful sale of Early Cutlery Sets, Veterinary and Medical Implements, Scales and other Measuring Instruments, Objets of Vertu and Scientific Instruments – a testament to the value of the e-auction, and an interesting new area for us to explore. The ‘Freshwater’ Collection and Philatelic Collector’s Series sale in New York, and the ‘Lionheart’ Collection of Great Britain and British Empire Part XI, plus the London Philatelic Collectors’ Series Sale, all took place at the end of January, alongside our very interesting Stamps and Covers of the World e auction.
We then had a short hiatus before the “Dubois” British Commonwealth Collection of Stamps and Covers sale, held at the RPSL London on 18th March, which went ahead as planned despite the Covid-19 uncertainty. We had several exchanges with the vendor, and recommended to proceed, which he agreed, and was rewarded for his decision in the end by great realisations. It was a resounding success, seeing some lots double or triple their estimates, and demonstrates the value of having access to SpinkLive from wherever you are in the world. These challenging times mean that we must react with agility and ensure that our beloved hobbies are safe from economic threat – hence our best in class SpinkLive platform will ensure that our realisations stay strong during these turbulent times. If you don’t have it yet, please put this magazine on the side, and download it free from the apple or android app stores so as not to be at a disadvantage to other collectors.
We hope that this new issue of the Insider will
provide plenty of distraction for those of you in isolation or locked down for any length of time. As mentioned above, we are delighted to include an article by Professor Guy Dutau,
probably the most knowledgeable collector of disinfected mail in the world, on Quarantines: plague, cholera and coronavirus Covid-19. Truly fascinating stuff, and very timely with the current state of medical emergency worldwide.
You may remember that our last edition focused on the golden age of Polar exploration, and further to our ground-breaking exhibition and the articles accompanying it we are proud to include a piece by triple cancer survivor Patrick McIntosh, about his trek across the Antarctic to the South Pole.
We also include in this issue an interview with esteemed Spink author David Sear, whose long-awaited new Introductory Guide to Ancient Greek and Roman Coins (Part One of Three) will shortly be available to purchase from Spink Books – a very exciting new addition to our list, and surely the perfect time to start encouraging new collectors to take up the hobby? This seminal guide will give an excellent background to the coinage, and hopefully enable beginners to take part in our SpinkLive and e-auctions if they are unable to leave their homes.
Other features include a piece on the history of the incredible Shah Jahan diamond and Spink’s role in finding it a worthy home, and a piece on the silver cup belonging to Prince Charles Edward Stuart, which will be exhibited at Spink from 4th May 2020. We also feature a piece on the Port Royal Earthquake of June 1692, featuring a letter written by James Wales, the first British appointed Deputy Postmaster of Jamaica, which forms part of the “Dubois” Collection of Jamaica Stamps and Postal History (to be offered for sale by Spink London in September).
Other highlights over the next few weeks begin with our charity auction of Bank of England notes in April, along with the Prof Yih- Tzong Hsu Collection of World Banknotes and
our World Banknotes sale. This is hotly followed by the Philatelic Collectors’ Series Sale; British Borneo Stamps and Covers; Bonds and Share Certificates of the World (e-Auction); Orders, Decorations and Medals; The Gary Diffen Collection of Australian Colonies Errors Part 1 – New South Wales, Queensland, South Australia; and The Lugano Collection of Venezuela – and that’s just in April! As you can see, we hope you will enjoy bidding from the safety of your own home if necessary on our best in class platform. With all staff working frantically from home in most locations, we intend to bring some distraction to you through the confinement period. The Spink staff has been remarkable throughout and is still there to serve you.
An extraordinary resilient collectables market
The greenshoots previously observed have weathered magnificently a spring blizzard. Indeed, while most asset classes were hammered by the Covid-19 repricing (and also coming off unsustainable levels where absolutely every possible single piece of good news was reflected in the prices). The going rate was a drop of 30% or 40%. Even Gold went from US$1,700 an ounce to US$1,400 in a few days. Maybe a first sign of capitulation? Or at least capitulation for the first leg down. At least I saw it that way, and yours truly, who had been cautious for a long time, got burnt trying to time a return to the stock market.
We were told after the 2008 Lehman crisis, that things would never be the same. Of course, it was a drunk sailor promise, as the next day all was forgotten and all market players, doped by cheap money and central banks put options, started speculating again as if Lehman had never existed!
This time, to put it simply, the central banks reacted ten times faster with ten times more money than in 2008 to prevent the system going into meltdown. So somebody out there is more worried than in 2008.
This one is expected to be so violent, Goldman Sachs is predicting Q1 US GDP at -9%, Q2 at a dismal -34% and Q3 +19%. With the worst quarter ever, followed by the best “remontada” ever. Maybe Snow White will awaken in a different world indeed.
So, I believe this time it might be different (my god, I hate to write this … probably a certainty to be wrong) and I would agree with BlackRock’s Chief Executive Officer Larry Fink predicting “the economy will eventually recover from the coronavirus outbreak, though the crisis will reshape investor psychology, business practices and consumer habits”. I believe Deglobalisation, end of Just-in-time management, higher public spending, state interventions for strategic industries in healthcare and beyond, more social protection for all will dominate the agenda of many politicians globally, even those nobody can suspect of any socialist inclination – the end of ultra- liberal capitalism?
I am dwelling on the macro environment, because I believe our collectables do not behave in a vacuum and these durable, almost tectonic, changes will affect deeply and positively our collectables world.
First, collectables since the crisis have done amazingly well. All our auctions and private treaties point to better results than pre- Covid-19. Most collectors in the world are confined at home, and probably get tired of their incessant video calls or being on a Netflix binge. A small British coin auction attracted 500 bidders, probably a record at Spink for a relatively modest and very specialised auction. We have more time to spend with our collections and are not too sure what to do with our spare cash, and there is quite a bit of it, as most cannot travel, go to restaurants or anything. Apart from the occasional run to the supermarket and a few online purchases, my March credit card statements show nothing else.
In collectables also, things will never be the same. Online auctions will dominate going forward, even if to keep some fun and
excitement we have an auctioneer on the rostrum. The technology will take over the process of bidding, the auctioneer will have to be more an entertainer than an increment machine. Printed catalogues might finally start to disappear following this crisis which is just accelerating an already existing trend. Viewing at trusted auctioneers will also be on the decline, except for collections.
Collectables have proven to be a very resilient asset class. If you are a seller and have spent time sorting out your collections in the last few weeks, sell now, and I mean now, your duplicates or non-core items. The prices are good, due to lack of IT capabilities many auction houses have postponed their auctions until after the summer, so there is a window of opportunity. But it will close soon, as prices might come down a bit as more sellers emerge to buy other assets. I believe this will be a short term consolidation before a continuation of the uptrend, as the massive public spending announced everywhere in the world must push inflation up at some point. Also collectables present all the benefits of ultimate discretion and flexible valuation previously described in these columns. They will also benefit from what the luxury industry experts call “revenge spending”, after months of frustration many of us will want to buy this trophy coin, banknote, stamp, or medal we always wanted, as soon as we feel we are out of the woods.
Auction houses are the liquidity provider of this market. Liquidity sometimes badly needed for people who need to pay bills in these difficult times. As nobody thought of closing the stock or bond market, they should be allowed to stay open, and operate online. They safely provide the much needed liquidity and distraction so desperately required in the current environment.
So look with a smile at all your 2019 auction purchases and think you have done much better than in any other asset class, but don’t be complacent. Sell very quickly what you do not really need and build the best collections possible in your area of predilection as those are always sought after. Focus on the exceptional and only keep the average stuff when it is needed in your main collection. The common and mediocre will never ever be a good investment for the long run.
I don’t wish you a happy Easter or Passover break with your family, as we are all most likely to stay home alone.
So stay safe, and call your loved ones as much as you can, before you can hug them again at the sunny terrasse of your favourite little café or restaurant! And remember, “Everything will be OK in the end, if it is not OK, it is not the end …!”