Alternative Investor

YOU CAN’T BEAT A GOOD BOOK

There has always been a good market for first editions and signed copies of books by famous authors. Like many items these editions will increase in value upon the death of the author or as copies of the book become rare.

There are obvious high value books. The 15th century Guttenberg bible and Shakespeare’s First Folio printed about 100 years later will always be within the reach of only the wealthiest of people, and these items are usually bought by institutions for their historical value rather than as a direct investment.

However, most of us can make a return on books that are generally available.
It isn’t unknown for people to queue at a book launch just to get a book with a generic signature “Best Wishes J K Rowling” was an example when the author did a book signing in London on the day of release of “The Order of the Phoenix”. The book was bought for £12.00 and turned up on ebay and sold the same day for £100. Perhaps not a long term mortgage paying investment, but a sure sign that there are people in the wrong place who are willing to pay for items at the earliest opportunity. If you miss the initial flurry of ‘must have’ on day one, then there are longer term opportunities.

Most books upon general release are also released with limited edition box slipcase covers, usually between 100 and 500 copies, which are usually signed by the author. There are also small runs of limited edition paper slipcase covers of around 5,000 copies. These are usually numbered for identification and can be a good investment. A signed box slipcase or alternative paper slipcase edition will usually increase year on year and see a bump upon the author’s death. These limited editions will always accrue the higher values of collectable books, but even standard first editions with the original slipcase covers can see a good return over time.

It also helps if the novel becomes a classic! In 1954 Fahrenheit 451 by Ray Bradbury was released. The book became a best seller and a cult classic. The original run of hardback books was sold out across the world within days of release and a copy can now easily bring £4,000 in auction. The later released hardback version bound in asbestos boards can fetch up to £12,000 in auction.

One of the problems with collecting modern book releases is the quality of the paper. Whereas in the past books were items to be treasured they are now classed as throwaway or recyclable media and as such modern books are printed onto highly acidic paper which will only have a life of around 30 to 40 years before the pages become so brittle that they will be unreadable. This brings a new problem for modern book collectors.

The drive to bring books down in price led to the use of cheaper paper and publishers are in no hurry to change this situation as it is a good chance that a new print run of a book in 30 years will bring a new stream of income into their business. From the point of view of the publisher it is good sense, from the point of view of the collector it is a change in the market possibly to the stage where the original release becomes an unreadable and even un-openable piece of collected artwork rather than a story that can be enjoyed through the ages.
It does seem to be a backwards step that, based on market economy, we now have a 30 year life on reading materials rather than the 500+ years of the original Guttenburg bibles. And perhaps it is quite poignant to think that the firemen of Ray Bradbury’s epic would never actually be needed; all the government would have to do is wait 50 years and all of the modern books would turn to dust by themselves. But this shorter lifespan is showing in the faster rise in the value of modern first edition and collectable books.

Perhaps this will just mean a faster increase in value over the first 15 to 20 year period, and from the changes in the way the collectable book market has restructured itself in recent years this does look to be the case.

Unless you get lucky a collectable book will never make huge gains, but a rise of 300 to 400 percent over a few years is not impossible and, if you choose wisely, is probably well within expectation.

And while you are waiting they do look good on a shelf!

Make time for Tea

If I told you that I was thinking about investing in a product classified by year and region of production you would probably think that I was contemplating fine wines or spirits, however on this occasion it is not the case.
Pu-erh tea is grown in Southwest China and the bordering Burma, Vietnam and Laos. It is a product steeped in history and even the great Chinese cultural revolution did not stop it being a coveted and highly valued product.

There has always been a value attached to an aged Pu-erh tea, and it was often the case that a poor man would buy a pressed cake of fresh Pu-erh on the birth of a daughter in the knowledge that the same cake would be of significant value as a dowry upon her marriage.

While most Pu-erh tea lovers would never dream of selling their prized collections the escalating price of Pu-erh tea has attracted many investors and opportunists. In China's supercharged economy, where no investment opportunity goes unnoticed the idea of investing in tea is not just a novel idea but an increasingly popular trend followed by many affluent young professionals.
For the better part of a decade the price of Pu-erh tea has risen each year, averaging a rough estimate of 10% annually.
For premium production consisting of wild tea leaves or leaves from old tea trees gathered from famous regions such as Yiwu this markup is progressively higher with prices jumping between 30-80% in 2006, obviously a good year for tea. The aged tea sector has produced the biggest gains of all. Prices for certain vintages have sky rocketed, some easily multiplying by as much as 10 times within the span of a few years. A noticeable example is the price of the famous 1950s Red Label (Hong yin). One piece of this famous teacake weighing approximately 357grams was once valued at US$1200 in 2003, US$5,000 in 2006 and to almost US$6,800 in 2008 at retail outlets in Hong Kong.
In summary the market growth for Pu-erh tea has been outstanding for the past decade. A repeat of this level of growth for the next decade will likely see collectors and investors sitting on a goldmine.
As the main market for Pu-erh tea is China, the sustainability and growth of the Pu-erh tea market will largely coincide with the future development and growth of the Chinese economy.

Pu-erh tea can be purchased in a variety of forms:

White Pu-erh tea is made entirely from the uppermost tender buds of the tea plant. The highest quality buds are gathered exclusively by hand in the spring. These large, succulent buds are highly valued and only a limited production can be made each year.

Green Pu-erh is an aged tea from Yunnan Province and is one of the oldest teas in China with a history of over 1700 years. Its character and complexity makes green Pu-erh one of the most popular Chinese teas amongst tea connoisseurs. Premium aged green Pu-erh tea can be as old as 20 or even 50+ years. Such teas are highly valuable commodities and are worth their weight in gold, often more.

Black (microbe-ripened) Pu-erh tea has been produced for centuries but only since the 1970’s has it gained in popularity. During this relatively short period of time black Pu-erh has easily become the most consumed type of Pu-erh tea in China

All of the above types of Pu-erh can also be purchased in a variety of shapes and sizes:

* Mushroom - Literally meaning "tight tea," the tea is shaped much like túocha, but with a stem rather than a convex hollow. This makes them quite similar in form to a mushroom.
* Bing - A pressed flat round disk of tea approx 400g per cake, usually sold in batches of seven.
* Bowl - (no image) A convex knob-shaped tea with size ranging from 3g to 3 kg or more, with 100g, 250g, 500g being the most common. The larger sizes used to be molded with a hole in the middle so that they could be transported on a staff.
* Melon - A shape similar to tuóchá, but larger in size with a much thicker body that is decorated with pumpkin-like "stripes". This shape was created for the famous "Tribute tea" that was made expressly for the Qing Dynasty Emperors from the best tea leaves of Yiwu Mountain.
* Square - A flat square of tea, usually in 100g or 200g sizes. They often contain words that are pressed into the square
* Brick - A thick rectangular block of tea, usually in 100g, 250g, 500g, and 1000g sizes. Zhuancha bricks are the traditional shape that was used for ease of transport along the Ancient tea route by horse caravans.

While the increasing demand and popularity points to a bright future, a note of caution, not all Pu-erh tea will appreciate in value. Much of the Pu-erh teas flooding the markets today are fakes and low quality teas. It is unfortunate but the precedence for increasing Pu-erh production has greatly compromised the quality of tea in recent years.
While the production of Pu-erh tea continues to increase annually, the quality has substantially dropped with recent outputs being most disappointing. The knock on effect has been a sharp increase in the price of older vintages. The pursuit of Pu-erh tea is best done with caution. Ignorance can be costly to a naïve investor.

Spread Betting part III

Andy McKenzie PR Manager of top UK spread betting company "Spreadex" gives us a deeper understanding of spread betting.

Scare stories over the state of the global economy and an impending recession means more people than ever are pulling their cash out of the volatile financial markets.
For some investors, it has meant switching funds from traditional stocks and shares into spread betting where money can be made on predicting the performance of equities, indices, currencies or commodities.
But if that still sounds like too much of a risk in the current economic climate, there is an alternative on the same theme – sports spread betting.
This adrenaline-fuelled form of sports gambling differs greatly to fixed odds betting in that a clever and accurate prediction of a scoreline or match outcome can result in big winnings.
However, similarly to financial spread betting, an inaccurate wager can result in losses much larger than your initial stake.
So how does sports spread betting work and what is the best way to approach this lesser known form of a flutter?
Prices are formed by a bookmaker who quotes a prediction or ‘spread’ of an outcome in a match or event.
For example, in football matches, instead of simply betting on a winning team or scoreline, quotes are released on outcomes such as the number of corners in a game, the number of yellow or red cards or even the aggregate total of the goalscorers’ shirt numbers.
In each case, if you think the prediction or ‘spread’ is too low you can buy on the price. Or if you think the ‘spread’ is too high you can sell on the price.
For every point away from the spread that you are correct, you will win that figure multiplied by your stake. Of course, if you are wrong you lose your stake times your margin of error.
So, for example, if Manchester United were playing Chelsea and a firm gave a Corner quote of 10.2-10.7 it would mean they expect between 10 and 11 corners to be won during the game.
Let’s say you make a £10 ‘sell’ on the price, as you predict a tight game with not many flag kicks. It would mean that for every corner below 10.2 you would make £10, but for every corner above 10.2 you would lose £10.
So if only six corners are won by both teams over 90 minutes you would make £42 (10.2 – 6 = 4.2 x 10), but if 13 corners are won by both teams in total you would lose £28 (10.2 – 13 = -2.8 x 10).
This example may show only relatively small winning or losing multiples, but if you imagine the volatility offered by Total Goal Minutes (the times in minutes of goals scored in a game added together) or Goalscorers’ Shirt Numbers, when the market can make up at anything from 0 to 400, then you can appreciate the thrill involved in this type of betting.
For example, in Portsmouth’s UEFA Cup group clash with AC Milan, one individual made a £10 Total Goal Minutes buy with spread betting firm Spreadex at a quote of 115-125 and made £1,840 when the market made up at 309 following late strikes from Ronaldinho and Inzaghi.
The added attraction of sports spread betting is that you can bet ‘in-running’ meaning that ‘spreads’ are constantly updated while the action takes place allowing you to close out for profits or to minimise losses during live play.
Also the sheer scale of markets to choose from means that even the most boring of events can be turned into an edge-of-the-seat thriller depending on your choice of bet.
Spreadex, for example, has more than 150 selections to choose from during ‘in-running’ football games as well as an extensive choice of markets covering cricket, horse racing, golf, rugby union, rugby league, tennis, snooker, motor racing, darts, greyhound racing, American Football and boxing.
Spreadex also offer a spread version of fixed odds betting known as ‘fixed odds’ spreads.
These work by offering a ‘spread’ based between 0 and 100 on a given outcome occurring, with the market either making up at 0 (if that outcome doesn’t occur) or 100 (if that outcome does occur).
So, for example, a price of 16-22 on Nicholas Anelka scoring the first match goal would basically represent the percentage chance of that happening.
A £1 buy at 22 would return £78 if Anelka did score the first goal (100-22 = 78), but would lose £22 if Anelka didn’t score the first goal (0-22 = -22).
As well as the two types of sports spread betting, Spreadex has the added advantage of offering financial spread betting from the same account.

For further information www.spreadex.com