For more experienced collectors, is the market being affected by the investment bubble popping/general bear market? Or have prices generally maintained from the collecting craze of the pandemic.

100CupsCoffee wrote:

For more experienced collectors, is the market being affected by the investment bubble popping/general bear market? Or have prices generally maintained from the collecting craze of the pandemic.

Prices for Tolkien items have been high for some time now and continue to be so. And there seems to be an equilibrium building for items that is much higher than it was, say five years ago. It seems that Tolkien collectors are willing to pay up to a certain amount (which is a lot) for genuinely collectable items but will not go above a certain number. For example a 1st Ed. HMCO Hobbit equilibrium price 5 years ago was around $1500-$2000, ie: that was that range that most sold in. Now that equilibrium has shifted to around $3500-$4000, with most selling in that range. But collectors still won't (for the most part) pay above that, and when dealers list one for say $6000-$9000 they just sit and don't sell.

We have debated the causes for this shift and when/if it will end. I think the Tolkien bubble is still going strong and will be for a while. The "collecting craze" of the pandemic is not over although is has shifted for the most part on the higher end items as investments for people looking for places to store their money while inflation continues to remain high.

I talk about this on my guest spot on The Prancing Pony Podcast Episode 250 towards the end of my time with Alan and Shawn. You can listen here https://theprancingponypodcast.com/202 ... he-sunshine-of-your-love/

Thanks Underhill, very much appreciate you taking the time to give your thoughts. Very interesting. Will definitely listen to the podcast - thank you for sending that across as well.

I wonder people are using rarer and sought after collectible items as more of an investment/hedge against inflation rather than a collectible which is fuelling demand/the bubble further. Similar to what's happened in the art world.

I also think that the Tolkien collecting market is pretty stable (and at a higher price point than a few years ago) - who knows for how long, though.

• General books (lower end of the price point - below $/£ 100) - lots of people turned to book collecting when stuck at home, and prices went up for (mostly extremely common) editions. I think these will settle down towards where they were before, as the quantity available will meet just about any demand, so when people slow down and watch the market, prices will also come down.
  

• Mid-range collectibles (signed limited editions for example - in the $/£ 1000s range) - more people are at this price range for collecting now than a few years ago, and these are just scarce enough that I think prices will hold (or drift a little up or down). These do not show up often enough for any precise predictions - one month a copy might show up and go super cheap because no-one saw it or the seller priced it too low, another month might trigger a bidding war and it goes for more than expected.
  

• high end (signed letters, The Hoard manuscript - $/£ 10k to 100k+) - I think this end of the marketplace is pretty well recognized as a hot market, so not only are Tolkien focused collectors keeping an eye on it, but museums and archives are interested, and wealthy people looking for investments that are shielded from stock/bond market swings are snapping up as well. I don't expect prices to come down any time soon, and likely will continue upwards for a while.

Morning all - haven't posted much here but I do continue to expand my collection.

It does seem that there's been a big increase in the floor price for all lord of the ring vintage books. At least towards the lower end. Certainly the market is much scarcer than it was six months ago.

Wonder how people here see the higher end of the market performing at the moment?

100CupsCoffee wrote:

Wonder how people here see the higher end of the market performing at the moment?

For years I have kept thinking that this is a "Bubble Market" and that prices will fall substantially. But defying all my expectations - prices just keep rising and rising - to levels I really never thought possible.

So that is still my current expectation - but I am sure I will continue to be wrong.

Maybe this is just wishful thinking - expecting prices to drop.

Some prices get a bit "entrenched" and sellers seeing the high prices achieved use these prices as their basis for their own valuation for selling. And for people buying at these prices and later looking to resell - they are not likely to wish to sell at a loss.

So I don't think there is an answer to your question really - who knows where prices will go......

If you follow the "buy what you really like at a price that you are happy to pay" - then maybe you don't need to worry too much about happens with pricing in the future (unless you are buying as an investment).

I cannot quantify the below, but here is my view...

As long as Tolkien attracts new readers and fans - the number of collectors will keep growing and the churn of current collectors deciding to stop collecting (and even sell their collection) will be low...

My feeling is that the combination of the following factors contribute to a continuous strength of the collector's scene:

- Tolkien & his works (of course!)
- Continous publication of materials
- Very strong Tolkien 'fandom' with societies, local organisations, events, forums etc
- Strong depth of scholarly work
- Expansion of the universe in movies, TV, etc

The last one is mostly a positive factor (in terms of bringing in new collector's) - but it also has the risk of disenfranchising less sophisticated collector's if it is overdone .... (too many movies, bad quality, etc)

Based on the above analysis, I believe the following:

- Low end books --> prices will swing up and down with long term trend being that they will soften to normal levels due to lack of scarcity

- Mid range books --> Prices will keep going up as the only real option for most new collector's coming in and with average scarcity playing a role here... the potential churn of collectors coming in opportunistically - also means that this will be the category most affected by people exiting the scene (either because they don't find Tolkien collecting attractive anymore or because they believe they can make a profit).

- High end items --> Prices will only go up over the years but at a smaller rate because the current prices already reflect huge premiums. Scarcity means that this category is also the one that has the least risk of downside. This does not mean that fluctuations may not happen - but I can only see the overall average trend going upwards.

Depends on your world view regarding market economy, potential hyperinflation, banking issues and interest rates, rising gold prices, bitcoin and other investments such as top end watches. Top end Tolkien Hobbit/LoTR can be considered assets in same way as a Rolex Daytona. If top end rises so do lower levels.

People of a certain age who grew up with 'low' inflation and easy credit may seem surprised by rising prices whereas I grew up with double digit inflation in the 70's and I don't see inflation as unusual

Maybe all the good copies of Hobbit & LoTR are in the hands of of long term collectors and we are now fighting over the 'scraps'. At the end of the day there only a finite number of them. Certainly in the 70's & 80's I had things which I never considered would be valuable and didn't keep them in mint condition (e.g Chopper Mk 1 bike, had it from new over 10 years then threw it away when I got a new racer, now a Mk 1 Chopper goes for £4k done up) . I guess that goes for many people so there probably aren't 3000 fine copies of Fellowship Of the Ring 1sts out there.

I do agree that prices are a premium, the ebay jacketless Fellowship of the Ring is now at £3k and its hanging off its hinges but someone may buy it with a view to selling it higher in a couple of years. Who knows when the next one will come along? Someone may cash in on their duplicates or they could decide to hang on their copies as long term investments. Its a gamble.

I could buy the damaged jacketless copy it but choose not to since I think the price is silly but if a UK edition in good condition with DJ came along at say £8k I probably would (even though I have the cash spending several thousands on a book seems wrong as I seem hardwired to think in 70s/80s prices with beer at less than £1 a pint. People aren't always logical )