Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

July 25 2011

Gold, fine wine, art or under the bed: what's the safest place for your cash?

In uncertain economic times, alarmed investors want to minimise their risks. We take a look at the options

For City traders digesting the news via their terminals today, the language had a constant ring.

"Swiss franc leaps as investors seek havens," screamed one story. "Investors poured into perceived safe-haven assets, driving gold to a record high," stated another, before adding: "US government bonds failed to benefit from their usual safe-haven status after the weekend breakdown in talks fuelled investor anxiety over treasury holdings."

It is a small sample but the message seems clear. Spooked investors, unsure of where to put their cash, are looking for places where they can be confident it will not suddenly vanish. So what are the safest investments – and can they really be risk-free?

Swiss franc

Sometimes you can look desirable just because the weaknesses of those around you are so stark. That was true of successors to Robert Green in the England goal, and it is now proving to be the case with the Swiss franc, which has appreciated by about 15% against the dollar this year. While some argue that the Swiss National Bank (SNB) will have to step in, others believe it is powerless to dampen demand.

In a research note, Simon Smith, chief economist at the foreign exchange specialists FXPro, wrote: "Switzerland is not the only country in decent fiscal shape but, apart from the Aussie dollar, it is the most liquid alternative to the US dollar, euro, yen and sterling, all of which have sovereign fiscal issues to varying degrees. Furthermore, the SNB could once again find itself pretty helpless in terms of trying to fight this strength, should this aversion to countries with sustained deficits really take hold.

"Intervention is an option but, despite the increased reserve levels and balance sheet position (around 55% in euros, from over 70% last year), it could well be a futile one."

Gold

Gold is always considered the ultimate safe haven, and it has so far served investors brilliantly during this downturn – rising 16% during 2011. Silver has performed even better, up 30%, despite a crazy period in the spring when margin calls (when an investor has to deposit more cash or securities to cover possible losses) were increased four times in six weeks as regulators feared that speculators were driving the price too high.

The consensus among analysts is that both metals will continue to rise, although there are some famous names who strongly disagree. George Soros, the financier who "broke the Bank of England", is a gold bear. "The ultimate bubble is gold," he said in May. "Gold has shown tendencies to go parabolic, and usually bubbles tend to end in that parabolic rise before the collapse."

Premium bonds

Another perennial safe bet, but are they worth it? According to the Premium Bond calculator on the financial website Moneysavingexpert.com, an investor enjoying average luck and punting £30,000 would expect to win £400 over one year – or a return of 1.3%. That comes tax free, so is equivalent to a 2.2% return at the 40% rate. In normal financial times, that would not appear stellar. But, with interest rates at 0.5%, it suddenly does not look too shabby.

Fine wine and art

Your typical City wine investor delights in boring acquaintances about how he drinks for free by buying two cases of young wine and leaving them to mature, before quaffing one and selling the other to finance his purchase. The brag is almost always nonsense but there are those around who reckon that wine can deliver decent investment returns. The Wine Investment Fund, which asks investors for a minimum £10,000 commitment, says it has paid out annualised returns of upwards of 13% on its portfolios between 2003 and 2006, while 2009 punters are enjoying a vintage year with many showing profits of more than 20%. Even 2010 investors currently have profits upwards of 8%.

However, there are those who believe that this cannot last. "Historically wine has had a good run, but there is a feeling it is getting near the end of the bubble," said one City trader. "Every man and his dog seems to be cropping up as a wine broker. And unlike gold and stocks, if the price starts to fall you might struggle to get out as it's not the most liquid asset, if you forgive the pun."

Yes, very droll. Equally, art is not an easily sold asset but it is also touted as another area for nervous investors. "The idea of contemporary art as a safe haven is a joke," said the entrepreneur Luke Johnson. "It is particularly illiquid, transaction costs are enormous, there is clearly no income and capital growth prospects are at best uncertain."

A number of art funds fell over during the downturn, but the Fine Art Fund Group, which has a base level $250,000 (£153,000) investment, is still around and boasts annualised returns in excess of 25% in its two main funds.

Still, in a world where everybody talks up their own book, it may be worth noting a quote frequently (but dubiously) attributed to Pablo Picasso: "I'm a joker who has understood his epoch and has extracted all he possibly could from the stupidity, greed and vanity of his contemporaries." Maybe not a screaming buy, then.

High-yielding stocks

Can high-yielding equities suddenly be a safe haven? UK shareholders have received their largest dividend payouts since the collapse of Lehman Brothers in 2008, with companies returning £19.1bn to shareholders in the three months to July – a 27% increase on the same period last year, according to Capita Registrars.

However, investing for the income might still put your capital at risk. David Jones, chief market strategist at IG  Index, said: "The stock market has been going up for two and a half years and might be fully valued. You may get the dividend, but possibly not the capital appreciation."

The mattress

If you invested in the stock market 11 years ago, you are still waiting for a return. And with interest rates at 0.5% for more than two years, leaving your cash in the bank has not proved to be a massively profitable option. Sticking your funds under the bed might be one approach and it is similar to one adopted by many companies, which are now reluctant to lend their spare funds in the wholesale money markets.

Louise Cooper, market analyst at BGC Partners, said: "For some risk-averse companies, it may be better just to keep the cash inside the company and earn nothing on it, rather than lend it out for a minimal return, with degrees of risk currently being replaced with fear of the ultimate risk."

So should private investors follow suit and simply stuff their wads under the mattress? "It's an option," admitted one frustrated City analyst. A word of caution, though: if the house goes up in smoke, the insurance will only pay out on £500 or so of burnt notes.


guardian.co.uk © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds


July 22 2011

Photobooks – affordable collectibles that are soaring in value

Rare editions now sell for tens of thousands, but collectors on a limited budget can invest in emerging photographers

At first glance they may look like overpriced coffee-table books, but photobooks are highly collectible works of art. In recent years, a boom in the market has seen prices skyrocket. At a dedicated auction at Christie's in London last year, signed early editions of influential photobooks such as Robert Frank's The Americans and Henri Cartier-Bresson's The Decisive Moment sold for £43,250 and £13,750 respectively.

The sudden surge in prices is thought to have begun with the publication of Martin Parr and Gerry Badger's lushly illustrated two-volume retrospective The Photobook: A History, in 2004. These books, along with Andrew Roth's 2001 work, The Book of 101 Books: Seminal Photographic Books of the Twentieth Century, attempted to reveal what Parr described as "the final frontier of the undiscovered". As a result, a canon of sorts was established and the values of the featured books soared.

According to Sven Becker of Christie's Books and Manuscripts, prices have risen so quickly in the last five years that values put on the more famous books have stalled. Higher prices will only be attained, he says, when the "books or copies are in perfect condition" or where they have "extraordinary things attached such as signatures and inscriptions".

Despite the scarcity of signed or inscribed books and the high plateau in prices on the seminal works, there is hope for the average collector with a modest budget. In fact, even if you're a complete novice, there is a good opportunity to combine learning about the art form with a sound piece of investing by collecting new editions.

Photobooks are expensive to produce and, while demand is too small to warrant long print runs or multiple reprints, it is large enough that the books remain desirable, soon become scarce and can eventually be very valuable. This means new editions costing between £20 and £60 can double or triple in price in as little as two to five years. In 10 or 20 years – and if the work of the photographer becomes particularly fashionable – the price may increase even more.

Jeff Ladd of the photobook blog 5B4, cites the example of John Gossage's book of gritty landscapes, The Pond. When the groundbreaking work was published in 1985, you could pick up a copy for about £20-£30, but it soon went out of print and became very scarce. Today it sells for £500-£600 via rare book trader Vincent Borrelli.

Similarly, photobooks by Bruce Davidson have become very valuable. Reprinted 2003 editions of his 1980s book Subway (see below) cost £40 on release but now sell for anywhere between £200 and £300.

If you want to pick up some books currently on the shelves that might follow this trend, William Eggleston's For Now (Twin Palms, 2010) and Before Color (Steidl, 2010) can still be found for around the £30-£40 mark; they are expected to double in value relatively quickly and perhaps even increase beyond that in years to come.

You need to look after anything you buy very carefully. Martin Amis of photobookstore.co.uk, which sells rare and limited-edition books, says books must be in perfect condition. "Blemishes or damage can knock as much as 40% of the price," he says, "which is why you have to be careful with places like Amazon who don't always package books as well as they might."

Amis, a collector himself, recommends buying from stores that specialise, straight from the publisher or from dealers you know. Other online specialists include the excellent photo-eye.com, based in Santa Fe. If you prefer to buy from a physical bookshop and can get to London, Photobooks International in Bloomsbury is a good place to rummage for used editions.

But one of the great things about photobook collecting is discovering the work of emerging photographers whose early books may become sought after. A good place to look is among the current boom in self-published titles.

Self-publishing in photography has a fine pedigree. Perhaps the greatest example is Ed Ruscha's 1963 work Twentysix Gasoline Stations (see below). More recently, Ryan McGinley's self-published 2000 debut The Kids Are Alright sold for £3,528 at Swann Galleries in New York.

"You can't go wrong if you are paying £7-£10 for something you like," says Becker, who believes these self-published books are "guaranteed to be collectible in the future".

To help you navigate the bewildering array, look at websites that collate the best of self-publishing, such as theindependentphotobook.blogspot.com, indiephotobooklibrary.org and selfpublishbehappy.com. Also, many established photographers, such as Stephen Gill, sell through their own sites. His Book of Birds, £19, or Hackney Flowers, £28, are available through Gill's own imprint Nobody and are worth a look for their uncommon detail as well as their potential collectability.

Finally, to make the most of collecting you will need to stay in the know and – most importantly – get to know what you like. Luckily, there are some excellent resources at hand. As well as Ladd's 5B4, there are blogs such as Marc Feustel's eyecurious.com, Nathalie Belayche's foodforyoureyes and the Guardian's own photo blog by Sean O'Hagan, all of which cover in depth what's new, where to go and what to see. Add to this magazines such as the British Journal of Photography, Photoworks, and Foto8 and galleries such as the Photographers' Gallery in London and the Redeye network in the north-west and you will find many opportunities to learn.

Collecting photobooks is a wonderful way to discover more about photography and build a small alternative nest egg at the same time. The only downside is that you might incur the cost of installing a sturdy set of shelves.

Where to start

The Photobook: A History Volumes 1 and 2 by Martin Parr & Gerry Badger £49.95, Phaidon; £30.40, Amazon

Published in 2001 and 2004, Martin Parr and Gerry Badger's retrospective of the history of photobooks has become hugely influential in the used photobook market. It's a good place to start learning and may even become a collectors' item itself.

New editions and reprints likely to go up

William Eggleston – Before Color £40, Steidl; £28, Amazon

Elegant edition of the eccentric American photographer's early work in black and white before he dazzled in colour. Small run and sure to be worth more than the cut-price £27.66 on Amazon in years to come, a good place to start and a unique introduction to the work of Eggleston.

Bruce Davidson – Subway £40, Aperture; £35, Amazon

Previous editions of Bruce Davidson's study of the New York subway system and its passengers have shot up in price. Gritty yet human, the highly anticipated Aperture Foundation reprint due in September is sure to fly off the shelves.

Ones to covet

Ed Ruscha – Twentysix Gasoline Stations £23,800, signed first edition, abebooks.co.uk

Regarded by some as the first "modern artist's book", pop artist Ruscha's self-published photobook consists of pictures of 26 gasoline stations taken on a trip from Los Angeles to Oklahoma. First editions in a run of 500 sold for $3.50 in 1962. At the time the minimalist imagery was shocking, but it is perhaps the price that raises eyebrows now – it can fetch between £6,000 and £12,000.

Alexey Brodovitch – Ballet £6,460, first edition, alibris.com

Legendary photobook by Harper's Bazaar designer Brodovitch whose backstage pictures of the Ballets Russes de Monte Carlo, taken with limited equipment, became famous for their radical challenging of technique and powerful depiction of movement. If you can't afford the original, Errata Editions does a fantastic 2011 version for about £25.


guardian.co.uk © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds


June 23 2010

Battersea power station fires up for London stock market listing

• Irish owners refinance and want to list the project on Aim
See our gallery of previous redevelopment plans

The troubled owners of Battersea power station have unveiled plans to float the building on the stock exchange in the latest in a string of attempts to redevelop the derelict London landmark.

Despite numerous plans for the 40-acre site, it has stood empty for more than a quarter of a century while the rest of the Thames waterfront around it has undergone huge change.

Now Irish property group Real Estate Opportunities (REO), which bought the Battersea site in 2006 for £400m, wants to spin it off and possibly float it on London's Alternative Investment Market (Aim). It is also looking for a partner to take a 50% stake in the project and provide the financial firepower.

REO has been hit hard by the Irish property slump. It reported an underlying loss before tax of nearly £1bn for the 14 months to 28 February, reflecting an £811m drop in the valuation of its property portfolio.

The firm has drawn up a shortlist of possible investors after being approached by a number of international real estate groups, private equity firms and sovereign wealth funds from around the world, including the Middle East.

REO hopes to get permission to redevelop the site in September after submitting the largest ever planning application made in central London, in terms of financial value, last autumn. If it gets the go-ahead, the site's value is expected to soar from the current valuation of £388m.

"It's an opportunity to turn the power station into a cultural icon for London," said Robert Tincknell, who runs REO's parent firm, Treasury Holdings. "A year ago, people were saying 'it's not going to happen'. That's changed enormously over the last 12 months, with the planning permission having gone in and the support we have [from the London mayor, Boris Johnson, English Heritage and Wandsworth Council]." The Conservatives launched their election manifesto at the power station in April.

Treasury Holdings was forced to tear up its plans for the imposing building, one of London's most recognisable landmarks, and start again after Johnson decided that a proposed tower would ruin the view from Waterloo Bridge to the Palace of Westminster. The original plan, drawn up by the New York-based architect Rafael Viñoly, included a futuristic 300m glass funnel and atrium, rising from an enormous transparent dome.

Viñoly and Treasury Holdings came up with a new blueprint a year ago that is capped at a height of 60m, as stipulated by the mayor. It includes 3,700 homes, office space, shops, restaurants and leisure facilities, at a cost of £4.5bn. Treasury Holdings also hopes to co-fund an extension of London Underground's Northern Line to the site.

The high cost means the company needs a partner – "someone who can bring big financial strength to it to make sure it happens," said Tincknell. Building work could start at the end of 2011.

When the power station was decommissioned in 1983, its then owners, the Central Electricity Generating Board, wanted to tear down the building and replace it with housing, but it had been given a Grade II listing in 1980. For developers, the real prize is the land around it; most have little interest in its heritage status.

REO said today it had negotiated new lending terms for Battersea with Lloyds Banking Group and Nama – Ireland's "bad bank" – which means its existing bank facility will be extended and all outstanding breaches waived.


guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds


June 02 2010

Four short links: 2 June 2010

  1. Wikileaks Launched on Stolen Documents (Wired) -- Wired claims the first set of documents was obtained by running a Tor node that users connected to ("exit node") and saving the plaintext that was sent to the users, without their knowledge. Reminds me of the adage that nothing big in Silicon Valley starts without being some degree of evil first: YouTube turning a blind eye to copyright infringement, Facebook games and spam, etc.
  2. VC Investments in Education -- Cleantech investors are chasing a 3x larger market than Education and yet are putting 50-60x the money to work chasing those returns.
  3. Cells: A Massively Multi-Agent Python Programming Game -- a sweet-looking update on the old Core War game.
  4. Google IO 2010 Session Videos Online -- I'm keen to learn more about BigData and Prediction APIs, which seem to me an eminently sensible move by Google to play to their strengths.

Older posts are this way If this message doesn't go away, click anywhere on the page to continue loading posts.
Could not load more posts
Maybe Soup is currently being updated? I'll try again automatically in a few seconds...
Just a second, loading more posts...
You've reached the end.

Don't be the product, buy the product!

Schweinderl