AE Monthly

<b>Bonhams:</b> MANDELSHTAM, OSIP. 1891-1938. Autograph Manuscript, 2 pp, [Petersburg,] January 1913, entitled

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A Sale that Confirms - By Bruce McKinney AE: The American Experience On December 2nd Bonhams in New York and via simulcast in San Francisco, conducted the sale of "The American Experience 1630 - 1890". As the consignor I can confirm it was an experience. The sale was presented as an unreserved mirror-on-the-market event and everyone seemed to see the results differently. As Shakespeare might have said, "the mirror always lies" or tries to. For myself it was confirmation of the efficacy of 'the-auction-as-event' approach and evidence of the endemic market weakness that prevails today. In succinct terms the sale brought a 20% premium on its full original cost. More than 200 registered to bid, 34 of which were new bidders at Bonhams. Thirty-seven spent more than $10,000. The overall bidding pool represented 29 American states and 8 countries. The house issued a superb catalogue, offered it widely, and advertised the sale extensively. A series of videos were issued. All that could be done was done. The outcome was very good but the results, given the support Bonhams provided, may be difficult to duplicate. The sale worked while suggesting comparative weakness. The highly valuable and rarest material sold well as it has elsewhere throughout the downturn, common rarities less well. The threshold between 'safe and supported' material probably rose to more than $5,000. A decade ago it was $1,000, as recently as three years ago around $2,500. During much of the past decade such material has been listed by dealers at somewhat higher prices, reflecting the general strength of the rarest books that have been trending up over the past twenty years. However, in this sale, when exposed to public reappraisal without reserves the community that buys, sells and collects often stepped aside to let items change hands for substantially less than what they themselves asked years ago. This suggests two possibilities. Prices may not so much have fallen as been exposed as inflated. Alternatively prices may have risen with the market but now fall at different rates, the middle of the market demonstrably weaker than the first tier. As to which view is more accurate it's unclear and probably irrelevant. When I was acquiring the material I believed the prices made sense. That the market's view changes is unsurprising. Neither is dealer pricing infallible. In buying primarily from Bill Reese I didn't know then what I know now - that he often bids at auction on items he sold. In this sale which brought $4.058 million he was the largest buyer by lots and dollar volume. Every collector should have such a dealer.
A Sale that Confirms - By Bruce McKinney In planning the sale, to mitigate potential weakness primarily due to the economy, I requested and Bonhams agreed to provide extended terms to buyers. They prepared an exceptional catalogue and conducted a well organized publicity campaign. They purchased ads in various media including a full back page in color in the New York Times national edition. After the auction some suggested that the sale was too large. If that's the case it bodes ill for the millions of books, manuscripts, maps and ephemera that will change hands over the next twenty-five years as baby-boomer dealers dispose and retire. In my view the number of lots sold at auction will increase significantly over the next decade. For this reality which for me amounts to a certainty, the internet will be an ever better, ever more important tool and will need to be. Larger volumes of material will need larger audiences to absorb them. Today the net, as far as collectible books are concerned, is only now becoming important. In a few years it will be indispensible. For this sale Bonhams' repertoire of traditional tools carried the day but we are on the bridge to the widely dispersed and easily accessed electronic tomorrow. The sound of horsemen rattle in our ears and there will be no turning back. In a perfect world information is widely known but this is not yet the case. The internet has made enormous strides in disseminating facts and data but is not yet the crucial factor in how institutions, dealers and collectors connect with collectible material. Nevertheless the web gathers strength quickly. In this interim those who use the internet extensively, often aggressively buy or bid but limit themselves to current valuations found on AE or personally construct them from research. This makes absolute sense. The basis of collecting should be logic, not whim and the market is moving in that direction. My sense is that 10 years ago internet penetration for the rare book field was 5% and today perhaps 40%. In 5 years it will be 70% and in 10 years 95%. Information increasingly drives the market and it is only a matter of time before those who want it have it. The effect will be to re-prioritize by relevance, rarity, importance and price and generally take prices higher. In the short term inefficient distribution of information may restrain buying but the market is rapidly becoming efficient and I believe this sale will aid in the transition. In the short term the sale confirmed that the re-absorption rate for material moving from collectors through the rooms to acquirers is limited both by price and volume. Those who acquired did so both because they coveted the material [as I did when I acquired] and/or saw the books as appealing investments. For those who acquired, whether out of passion or as investments, these purchases will prove to be good decisions.
A Sale that Confirms - By Bruce McKinney Taken together there are several conclusions: 1. The top end of the market is again confirmed. The best, rarest, most exceptional and beautiful material attracts bidders. Images rule. Prose, however early, important and wonderful is simply less appealing than letters from the author or their signed images. We have entered the visual and connected era and prices reflect this. 2. The threshold between desirable and common is rising and this is difficult news for the middle market. Ten years ago material that cost a thousand dollars sat upon the hinge point between highly collectible and common. Today the hinge is higher. What this means is that dealers are bidding for and acquiring ever more valuable material while stepping aside to let larger portions of the broad market fend for themselves. For collectors of mid-level rarities we now know that AED valuation estimates are accurately predicting auction outcomes and the estimates are slipping. As to why we are experiencing a decline in previously secure mid-level material there are several explanations and factors. A. When the market was rising between 1990 and 2006 dealers tended to move prices up across the board as important material set records. It's now plausible that higher prices for much of the mid-level material were never justified. B. Collecting of serious material is primarily the province of the wealthy and there are, by all reports, fewer in this category. The past decade has been for many difficult financially and what was, not so long ago, an entitlement of the upper middle class, may now have become an unsupportable luxury. The evidence of strength at the top and weakness in the middle is consistent with this thinking. The result is declining interest, and declining prices in the vulnerable middle market, particularly in the highly collectible but relatively common important books that commanded $5,000 or so not so long ago but which struggle in the auction rooms today. This suggests an imbalance between copies available and interested buyers at the epicenter of where most valuable books are found: common rarities. C. There are more options and competition and the economy is difficult. The market is flooded with interesting possibilities. Listing sites today display millions of collectible books. They don't sell fast but leave the misimpression that many collectible books are common. The more correct impression is that they have been listed for years and accumulated because buyers are rarer than the books. For the collector the question should perhaps always be "why should I buy this?" because selling may not be easy. My sense is that all these factors are involved. Prices for many items went too high and now return to earth. For baby boomers in particular the collecting moment passes. An increasingly adversarial tax code and increasing longevity may also lead to sales of collections and liquidations of inventories. As well, any continuing pronounced down trend in prices may induce further sales. An orderly decline is logical while the market re-prices but the bias may be to the downside.
A Sale that Confirms - By Bruce McKinney As to whether this happens the biggest single factor may be how baby boomer dealers respond as their book selling careers wind down. There are thousands of them. Dealers tend to hold prices until the final years and then sell en mass to other dealers for some combination of money down and a share in the proceeds over time. But if there are fewer future dealers as appears likely, such deals on good terms may become difficult to obtain. Dealers tend to shun selling at auction but should they change their view the pressure on prices could be extreme. No doubt the best material will hold up and even prosper. The middle market is less certain. The key may be the ability of buyers and sellers to find each other more efficiently. For myself selling "The American Experience" at Bonhams made 2010 an extraordinary year. I learned a lot and lived through it. I also now know that the ideal auction consignor of unreserved material is dead because to get through it you can't feel too much. As to what this means to me as a collector I continue to acquire material. I am both careful and aggressive. The volume of complex, interesting and often unknown material flowing into the rooms, appearing in dealer offers, showing up on listing sites and on eBay - is stunning. The selection of material has never been better. As to what such things are worth and whether they are appropriate for my collection of the Hudson River Valley I now gauge against their history and rarity, buy or make offers. It's a different world and for book collectors who are prudent, the best possible.

A Sale that Confirms

- By Bruce McKinney

AE: The American Experience

On December 2nd Bonhams in New York and via simulcast in San Francisco, conducted the sale of "The American Experience 1630 - 1890". As the consignor I can confirm it was an experience. The sale was presented as an unreserved mirror-on-the-market event and everyone seemed to see the results differently. As Shakespeare might have said, "the mirror always lies" or tries to. For myself it was confirmation of the efficacy of 'the-auction-as-event' approach and evidence of the endemic market weakness that prevails today. In succinct terms the sale brought a 20% premium on its full original cost. More than 200 registered to bid, 34 of which were new bidders at Bonhams. Thirty-seven spent more than $10,000. The overall bidding pool represented 29 American states and 8 countries. The house issued a superb catalogue, offered it widely, and advertised the sale extensively. A series of videos were issued. All that could be done was done. The outcome was very good but the results, given the support Bonhams provided, may be difficult to duplicate.

The sale worked while suggesting comparative weakness. The highly valuable and rarest material sold well as it has elsewhere throughout the downturn, common rarities less well. The threshold between 'safe and supported' material probably rose to more than $5,000. A decade ago it was $1,000, as recently as three years ago around $2,500.

During much of the past decade such material has been listed by dealers at somewhat higher prices, reflecting the general strength of the rarest books that have been trending up over the past twenty years. However, in this sale, when exposed to public reappraisal without reserves the community that buys, sells and collects often stepped aside to let items change hands for substantially less than what they themselves asked years ago. This suggests two possibilities. Prices may not so much have fallen as been exposed as inflated. Alternatively prices may have risen with the market but now fall at different rates, the middle of the market demonstrably weaker than the first tier. As to which view is more accurate it's unclear and probably irrelevant. When I was acquiring the material I believed the prices made sense. That the market's view changes is unsurprising. Neither is dealer pricing infallible. In buying primarily from Bill Reese I didn't know then what I know now - that he often bids at auction on items he sold. In this sale which brought $4.058 million he was the largest buyer by lots and dollar volume. Every collector should have such a dealer.

A Sale that Confirms

- By Bruce McKinney

In planning the sale, to mitigate potential weakness primarily due to the economy, I requested and Bonhams agreed to provide extended terms to buyers. They prepared an exceptional catalogue and conducted a well organized publicity campaign. They purchased ads in various media including a full back page in color in the New York Times national edition. After the auction some suggested that the sale was too large. If that's the case it bodes ill for the millions of books, manuscripts, maps and ephemera that will change hands over the next twenty-five years as baby-boomer dealers dispose and retire. In my view the number of lots sold at auction will increase significantly over the next decade.

For this reality which for me amounts to a certainty, the internet will be an ever better, ever more important tool and will need to be. Larger volumes of material will need larger audiences to absorb them. Today the net, as far as collectible books are concerned, is only now becoming important. In a few years it will be indispensible. For this sale Bonhams' repertoire of traditional tools carried the day but we are on the bridge to the widely dispersed and easily accessed electronic tomorrow. The sound of horsemen rattle in our ears and there will be no turning back.

In a perfect world information is widely known but this is not yet the case. The internet has made enormous strides in disseminating facts and data but is not yet the crucial factor in how institutions, dealers and collectors connect with collectible material. Nevertheless the web gathers strength quickly. In this interim those who use the internet extensively, often aggressively buy or bid but limit themselves to current valuations found on AE or personally construct them from research. This makes absolute sense. The basis of collecting should be logic, not whim and the market is moving in that direction. My sense is that 10 years ago internet penetration for the rare book field was 5% and today perhaps 40%. In 5 years it will be 70% and in 10 years 95%. Information increasingly drives the market and it is only a matter of time before those who want it have it. The effect will be to re-prioritize by relevance, rarity, importance and price and generally take prices higher. In the short term inefficient distribution of information may restrain buying but the market is rapidly becoming efficient and I believe this sale will aid in the transition.

In the short term the sale confirmed that the re-absorption rate for material moving from collectors through the rooms to acquirers is limited both by price and volume. Those who acquired did so both because they coveted the material [as I did when I acquired] and/or saw the books as appealing investments. For those who acquired, whether out of passion or as investments, these purchases will prove to be good decisions.

A Sale that Confirms

- By Bruce McKinney

Taken together there are several conclusions:

1. The top end of the market is again confirmed. The best, rarest, most exceptional and beautiful material attracts bidders. Images rule. Prose, however early, important and wonderful is simply less appealing than letters from the author or their signed images. We have entered the visual and connected era and prices reflect this.

2. The threshold between desirable and common is rising and this is difficult news for the middle market. Ten years ago material that cost a thousand dollars sat upon the hinge point between highly collectible and common. Today the hinge is higher. What this means is that dealers are bidding for and acquiring ever more valuable material while stepping aside to let larger portions of the broad market fend for themselves. For collectors of mid-level rarities we now know that AED valuation estimates are accurately predicting auction outcomes and the estimates are slipping.

As to why we are experiencing a decline in previously secure mid-level material there are several explanations and factors.

A. When the market was rising between 1990 and 2006 dealers tended to move prices up across the board as important material set records. It's now plausible that higher prices for much of the mid-level material were never justified.

B. Collecting of serious material is primarily the province of the wealthy and there are, by all reports, fewer in this category. The past decade has been for many difficult financially and what was, not so long ago, an entitlement of the upper middle class, may now have become an unsupportable luxury. The evidence of strength at the top and weakness in the middle is consistent with this thinking. The result is declining interest, and declining prices in the vulnerable middle market, particularly in the highly collectible but relatively common important books that commanded $5,000 or so not so long ago but which struggle in the auction rooms today. This suggests an imbalance between copies available and interested buyers at the epicenter of where most valuable books are found: common rarities.

C. There are more options and competition and the economy is difficult. The market is flooded with interesting possibilities. Listing sites today display millions of collectible books. They don't sell fast but leave the misimpression that many collectible books are common. The more correct impression is that they have been listed for years and accumulated because buyers are rarer than the books. For the collector the question should perhaps always be "why should I buy this?" because selling may not be easy.

My sense is that all these factors are involved. Prices for many items went too high and now return to earth. For baby boomers in particular the collecting moment passes. An increasingly adversarial tax code and increasing longevity may also lead to sales of collections and liquidations of inventories. As well, any continuing pronounced down trend in prices may induce further sales. An orderly decline is logical while the market re-prices but the bias may be to the downside.

A Sale that Confirms

- By Bruce McKinney

As to whether this happens the biggest single factor may be how baby boomer dealers respond as their book selling careers wind down. There are thousands of them. Dealers tend to hold prices until the final years and then sell en mass to other dealers for some combination of money down and a share in the proceeds over time. But if there are fewer future dealers as appears likely, such deals on good terms may become difficult to obtain. Dealers tend to shun selling at auction but should they change their view the pressure on prices could be extreme.

No doubt the best material will hold up and even prosper. The middle market is less certain. The key may be the ability of buyers and sellers to find each other more efficiently. For myself selling "The American Experience" at Bonhams made 2010 an extraordinary year. I learned a lot and lived through it. I also now know that the ideal auction consignor of unreserved material is dead because to get through it you can't feel too much.

As to what this means to me as a collector I continue to acquire material. I am both careful and aggressive. The volume of complex, interesting and often unknown material flowing into the rooms, appearing in dealer offers, showing up on listing sites and on eBay - is stunning. The selection of material has never been better. As to what such things are worth and whether they are appropriate for my collection of the Hudson River Valley I now gauge against their history and rarity, buy or make offers. It's a different world and for book collectors who are prudent, the best possible.