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Investment potential of minerals hits the Big Time!

Posted by Jim Houran  
Re: Investment potential of minerals hits the Big Time!
May 25, 2012 09:42AM
I don't think this concept has been brought up.

Maybe it was Tucson 1982 that Bob Jackson and I had a crummy dinner at the crummy diner near the Desert Inn.

As two experienced field collctors who had handled great self collected stuff, I wanted to know why he didn't have a better collection of his self collected specimens.

I said that I had saved all of my best self collected specimens.

He replied that if he had retained a specimen worth $500 that such was the same thing as buying the specimen for $500.

I could not argue with that premise, other than to say that it only cost me knuckle skin, blood, and sweat.

I consider my collection to be my retirement fund, and recently, I have started selling a piece or two per year.

I only look at them once or twice per year anyway, so I think that getting them into circulation and using that money to pay my real estate taxes is not a bad idea.

I may not have made a big mistake to retain my specimens. 30 years later the $500 pieces are worth $5,000.

Bart



Edited 1 time(s). Last edit at 05/25/2012 10:44AM by Bart Cannon.
avatar Re: Investment potential of minerals hits the Big Time!
May 25, 2012 09:46AM
On May 20, 2012 in New York Heritage auction house had an auction of "Fine Minerals".

After looking at the sales price on their web site which I think included the buyers premium I determined that:

There were 169 items offered of which 71 sold which meant that only 42% of the items were sold.
There were 25 fluorescent items offered of which 21 sold which gave an 84% sales rate.
There were 144 non fluorescent items offered and of those 46 sold giving 32% that sold
There were 70 mineral specimens of which 26 sold or a 36% sales rate.

Many of the high ticket items did not sell. What does this mean? Fluorescent specimens were popular, at least at this sale. It would also appear that many of the estimated prices were off the mark. What else does it mean? Your guess is as good as mine.

Rock Currier
Crystals not pistols.
Re: Investment potential of minerals hits the Big Time!
May 25, 2012 11:28AM
    
Rock,

The billionaires have spoken!

I wish everyone good luck with every aspect of the hobby and hope I can find an occasional sleeper. We don't have five grand for a specimen, unless it is the Hope Diamond, so I'll have to look at those extraordinary specimens from a distance. I just watched the Blue Cap Productions DVD of the 2011 Munich Show for the third time in two days, so I feel those killer specimens are now part of my collection locked away in a box to which I have no key. I can fondle them with my eyes, of course.

Best wishes,

Joe
Re: Investment potential of minerals hits the Big Time!
May 26, 2012 01:20AM
I think this is part of a general trend. There is a lot of money out there, and a lot of people are scared to put it anywhere. They have driven gold and platinum to astronomical prices and are now afraid of the bubble they've created. Same with oil. Now they are looking for someplace--anyplace--to put their money that isn't already inflated to ridiculous levels. And with minerals, you at least have something you can show your rich friends. Of course, the mineral bubble will burst, too, probably just as soon as people stop being scared of stocks, bonds and real estate.
avatar Re: Investment potential of minerals hits the Big Time!
May 26, 2012 08:04AM
If larger numbers of rich people are now investing in minerals, it shows (as the Forbes article points out), that high-end mineral specimens can be a good investment. Certainly in historical terms the value has only risen.

As with any investment, you need to know your stuff to benefit from it well, but it's certainly more safe than the stock market.

Jolyon
avatar Re: Investment potential of minerals hits the Big Time!
May 26, 2012 11:08AM
    
The stockmarket is like the lottery. Only a happy (smart?) few really make money with it. And almost nobody makes money with it fast.
Monkey's still are better at the stockmarket than "professionals" -> [www.phinkmonkey.com], so, avoid professional advice :)
Banks earn money from you losing/wasting it. Lottery companies get rich from people's stupidity.

So: better invest in stuff that will definitely make you happy in the long run.
Some mineral specimens might be a good investment in the long run, most are not.
Better invest in your own body... eat healthy food, avoid stress, work hard but not too much, make love, travel much: give your body and mind movement, climb mountains, walk a few hours per day, leave your car and ride a bike, find/buy minerals to make fun with. Go outside, go collect minerals. Breath fresh air. Go to mineral fairs. Have fun.
Avoid fast food & fast money : it will not make you happy in the long run ;)
Re: Investment potential of minerals hits the Big Time!
May 26, 2012 11:10AM
Jolyon,
Any commodity can blow a bubble. As long as the buyers are knowledgeable and buying for beauty, that is one thing. However, when people start buying at high prices only to sell quickly at higher prices (the bigger-fool strategy), that is when we know we have a bubble.

Minerals are safer than stocks only because there are fewer fools in the market. I'd say the Forbes article may mark the begnning of the end of that safety. Forbes has a lot of subscribers who are fools.
avatar Re: Investment potential of minerals hits the Big Time!
May 26, 2012 03:55PM
    
Well Said Frank!
Re: Investment potential of minerals hits the Big Time!
May 26, 2012 05:00PM
    
HI,

Interesting discussion but I like Frank De Witt's advice best. We just have to look back one week to see what happened to average investors who put their money into Facebook stock. Not much works in the short run unless you are selling at the beginning whether it be stock or minerals. To make money as an average individual you have to be in for the long run. There's an old saying on Wall Street which applies to any commodity: : "Bulls can make money on Wall Street and Bears can make money but Pigs never make money".

Best,

Joe
Re: Investment potential of minerals hits the Big Time!
May 27, 2012 01:19AM
Joseph, I think the saying goes:

Bulls make money. Bears make money. Pigs make sausage.
Re: Investment potential of minerals hits the Big Time!
May 27, 2012 02:19AM
    
Ray,

Your version is cute but in the 30 plus years I worked in the Insurance/financial services industry in Manhattan near Wall Street I never heard it put that way. The phrase was coined by Ray Brady, who was the chief economics correspondent for CBS Network from 1977 to around 2000. He was a gloom and doom economist who felt the unemployment rate could be too low, which would make it difficult for businesses to find qualified employees for expansion. He claimed he always made money in a bear market and was not always a fan of tax cuts. I know because he was one of my professors when I was going for my Master's Degree at New York University. Both statements make the point but I was only familiar with Brady's version.
Re: Investment potential of minerals hits the Big Time!
May 27, 2012 05:26AM
Jim cramer on cnbc afternoons also has a version bulls make money bears make money and pigs get slaughtered
avatar Re: Investment potential of minerals hits the Big Time!
May 27, 2012 02:48PM
I think bart and Alfredo make some great points :
"Mineral specimens are fine art sculptures that not even Michelangelo could get close to duplicating.

There should be no upper limit on their value."


and

"What one man has painted, another can reproduce. But you cannot reproduce fine mineral specimens. Over the long term, they are more irreplaceable than manmade art, and should therefore be valued more highly."
Re: Investment potential of minerals hits the Big Time!
May 27, 2012 03:47PM
    
Michael,

Thanks for reminding me; I had forgotton about Cramer's version. Regardless, every version has some truth in it. The hard part is knowiing "When to hold them and when to fold them" as Kenny Rodgers sang.

Besat,

Joe
Re: Investment potential of minerals hits the Big Time!
May 31, 2012 03:55AM
It may just be me, but I have noticed a HUGE price surge over the last 10-15 years in mineral specimens. I see some online dealers offering relatively common minerals (albiet choice specimens of these minerals) for upwards of $100 and sometimes even more; whereas 10, 15 or so years ago, such specimens might have been had for only around $15 or 20. For some semiprecious stones such as kunzite and the colored tourmalines, this price inflation seems even greater- I purchaced a really nice 2" kunzite back in '83 for around 15 dollars that would be worth at least $120 today, and if it had appreciated at the normal rate of inflation, that would still make it worth only around $30 in today's money. I remember seeing decent crystals of multi-colored tourmaline going for less than $30 back then- good luck finding one for under $100 today. What I worry about is mineral collecting turning into the same status as coin collecting- where there is so much price inflation that everyday hobbyists with modest budgets will be priced out of the hobby. Then you will have these suit-and-tie types bartering "officially sealed" crystal and mineral specimens at auctions just so they can have the exclusive privelege of storing them in a vault somewhere.
Re: Investment potential of minerals hits the Big Time!
May 31, 2012 05:15AM
Matt:

That's pretty much what most people do with gold, store it in a vault somewhere...unless you're making computer chips and so on. Occasionally, someone will open up the vault and move some gold around. When countries make transactions with each other, that usually entails a guard opening up one under ground vault, placing a few gold bars on a dolly or fork lift, and moving it to another vault a few feet down the hall.

It's kind of silly when it's put in perspective.
Re: Investment potential of minerals hits the Big Time!
May 31, 2012 11:26AM
I believe what Peter Andresen wrote is right, once this takes off, then mine owners will not allow the odinary collector to go on to their property, and then the overall price of all minerals will rise to extortionate prices!

Spencer.
avatar Re: Investment potential of minerals hits the Big Time!
May 31, 2012 04:57PM
    
When I was staff mineralogist at Ward's Natural Science Establishment, the rare collectibles investment bubble was inflating. A man called who wanted to buy gemstones from us, but I explained we didn't sell gems. He told me he was investing in gems (e.g. aquamarine @ $250/carat, etc.) I asked him, "Why don't you buy wholesale?" The telephone seemed to go dead. When he regained his composure, I told him that he shouldn't invest at retail, because he would have many costs associated with liquidating his investments. (This assumes that the investor knew how much to pay - either retail or wholesale. Of course, the only real "wholesale" is on-site buying from the primary producer, but often it is cheaper to have purchased from a dealer thousands of km away from the source. At Tucson, "wholesale" is only a dream and dealers buy from dealers and eventually one of the dealers has just the "right" customer at the new price level.) Clearly, the Forbes' writers are naive at best. Dumping an army of grass-green investors on the mineral market will benefit the high-roller dealers and the consequent liquidation auctions will be a lesson learned. Oh, wait, the "investors" have a short memory or they would remember the collectibles collapse of the 1980's.

Best Wishes, Van King
Re: Investment potential of minerals hits the Big Time!
June 02, 2012 01:10AM
Van,
What I am seeing is rich folks employing "knowledgeable experts" to get deals for them. There were a couple of agents looking at Teofilo Otoni last year--although they weren't spending much time at the Main Event. Most wealthy collectors wouldn't be able to tell a quartz crystal from a sapphire. They are looking for showy, rare and appreciating value.
avatar Re: Investment potential of minerals hits the Big Time!
June 02, 2012 10:48AM
    
When "investments" get noticed by the mainstream press, it usually is time for a crash.
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