Don’t Panic! The Secret To Investing On Record Store Day

 

Record Store Day Chart to show how £100 invested has performed since 2012

 

Don’t Panic! Those “hot” new Record Store Day releases may not be as essential as you think….

As Record Store Day looms ominously like a looming, ominous thingy, and the first flurry of tents begin forming queues outside the nation’s record stores in the same way Eastern European Migrants do outside the UK in the imaginations of members of UKIP, it is perhaps a good time to look at the value of those previous Record Store Day purchases you may have made fortunes from.

After all, everyone knows buying these rare records is like printing money, right?

That Vaccines single must be worth, oh, hundreds by now, surely?  So where should we be investing our hard earned cash in 2014? Everyone knows that past performance is no guide to the future, but what can we learn from previous years?

arctic monkeys R U Mine

First, the good news for anyone who invested their money wisely or perhaps fortunately in either 2012’s Arctic Monkeys’ RU Mine 7″ purple vinyl or David Bowie’s 7″ picture disc of Starman. Congratulations. You hit the jackpot. Both are now regularly fetching silly money on Discogs and eBay: Starman has averaged £95 over the last ten trades and is only currently available at £160 whereas RU Mine has averaged £71 (and as much as £120) which is roughly an 8-10x return on your cash. With those investing skills, a career in private equity awaits.

Bowie Starman 1

 

So should we jump on the bandwagon and buy more Bowie or Arctic Monkeys? Well, not necessarily. If you bought Bowie’s “Drive In Saturday” picture disc on Record Store Day 2013 with similar expectations as 2012, you’ll be feeling like the guy who invested in Alan Sugar’s Emailer phone when everyone else piled into Blackberry. The average sale price for that one is £14.50. Hardly a goldmine…

Similarly, Arctic Monkeys’ “Don’t Sit Down” 7″ single released the year before, on Record Store Day 2011, has failed to make money for anyone, being currently available for a bargain £6.

Other well known artists have also failed to set the world alight. Radiohead are a good example (a 2011 release of Supercollider is currently available for £15) and so on. It’s difficult to say why those particular Arctic Monkeys and Bowie discs were so valuable.

So if it isn’t the artist, what makes a record appreciate in value? Is it a limited run? Possibly, but that doesn’t explain why RU Mine had a run of 1,750 copies and has rocketed, whereas Elbow’s single of McGreggor had an even more limited run of 500, but is still available for £5.99.

Is it 7″ singles? Not if you look at the value of The Beatles 2012 box set – which has fallen from £50 (which was steep, to be fair) to a more sensible £30.

To try to get to the bottom of all this, by way of research I took a basket of twenty five “hot” releases of RSD 2012 and tracked their prices over the last two years. These releases included records by Kate Bush, Coldplay, The Sex Pistols, The Kinks, The White Stripes, The Vaccines, Flaming Lips, Noel Gallagher, The Beatles, Abba and Arcade Fire. All blue chip names with excellent investment potential. I left out those releases by Bowie and Arctic Monkeys because they skew the results hugely and would give an otherwise misleading picture.

The result? With the exception of those two 7″ singles by Bowie and Arctic Monkeys the prices today are little more than what they were on the 19th April 2012.

At the top of this page is a chart to compare how a hundred pounds invested on Record Store Day 2012 would have changed in value if you had spent it on records, and then compare that with Gold or Stocks and Shares.**

So, by comparison:

  • £100 invested in Gold would now be worth £77.
  • If you had bought £100 of shares on the FTSE100 index, then you would now be sitting on £117.
  • The RSD2012/25 has merely stayed the same.
  • Rather fittingly of course, had you spurned the independent record stores and invested in HMV shares, your £100 would now be worth precisely zero…

Compared with those alternatives, buying records doesn’t look like such a bad investment after all. But the really good news is that if you miss out getting that record you want on the day, the chances are you’ll be able to pick up what you want a bit later. One word of warning: avoid the rush on eBay. It’ll all be double the price for a few weeks, and will then (most likely) settle back as buyers dry up and potential sellers realist no-one else really wants that Bathory picture disc.

As for it being an investment, well – even if their value dips a bit, it’s still the only investment you could have made and still heard Mastodon’s cover of Flaming Lips’ “Spoonful Weighs A Ton”…

 

* I do, actually – I bought both and am feeling extremely smug. I won’t sell them, of course, and they will gradually depreciate in value…

** I also tried to see whether we could compare the price of Pork Belly futures, as I have a soft spot for the film Trading Places, but sad to report, they stopped trading Pork Belly Futures in 2011…



Categories: Music

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