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Introduction to Scripophily
Scripophily is the hobby of collecting “scrip,” such as securities,
documents and ephemera issued by firms and governments in the past. The
vast majority of scrip is in the form of old stocks and bonds issued by
defunct companies (and even defunct government regimes). Usually these
securities have no value as financial claims, though they may have
considerable value for their artistic merit or historical interest. I
enjoy collecting scrip for two reasons:
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Artwork: Many securities feature highly
intricate artwork, truly masterpieces of engravers’ skill. The use of
color, size, detail, vignettes (or pictures), and general embellishment
often lend signals about what the issuer was (or hoped to be). Usually
these securities are simply nice to look at.
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Historical interest: The securities often
tell a story about mismanagement, sharp market reverses, failed
technology, etc. They can be excellent teaching devices and are at least
reminders about the way things can go wrong. Any history buff will enjoy
scrip for the ties to the past.
Relatively little has been published about
the collection of scrip; but for a place to start, see Keith Hollender’s
Scripophily: Collecting Bonds and Stock Certificates Facts on File, 1983,
(ISBN 0-87196-625-5).
There are numerous dealers in scrip who send
out richly illustrated catalogues—I highly recommend ordering a couple of
catalogues simply to see what is in the market. See the list of
websites
for collectors for the coordinates of dealers. Items range from $10 at the
low end to several thousand dollars at the high end. Here are four
considerations to guide your collecting of scrip:
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Know who you are. Are you a manic
collector/investor, or are you a casual buyer? I like to look at my
collection, so I simply stop buying when I run out of wall space to
display items. Very serious collectors tie up thousands of dollars in
scrip, and need to keep their most valuable items safe and out of the
light of day—that’s not my cup of tea, though I can understand the
appeal of this kind of collecting.
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Find a theme. It makes sense to
build a collection that has some coherence. Mining shares, banks,
transportation companies, auto manufacturers, are all examples of themes
of coherence. We have all strayed from our themes from time to time, but
mine is major financial fiascos (see the list of my favorites.)
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Do you like looking at it? This may
matter less to serious investors and collectors, who choose more to
build a collection than to admire it. But if you are in my league, then
color, artwork, and the little picture (or “vignette”) will matter
greatly.
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Does it have an interesting story?
Unknown companies issued the vast bulk of available scrip. With some
digging in State Corporation Offices we might learn a little about these
firms. But in general, they will remain ciphers. Those that have
interesting stories behind them might be a good place to start
collecting because it gives you a basis for describing your
acquisitions.
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Does it have a famous signature?
You can buy securities bearing some really famous names from business
history: J.P. Morgan, John D. Rockefeller, most of the railroad “robber
barons,” and so on. Since autograph collectors pursue these special
securities, you should expect to have to pay a real premium for paper
bearing a famous signature.
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What is its physical quality? Look
for tears, mold, and fading. While some of this is unavoidable, try to
acquire only good physical specimens. Some day you (or your heirs) will
liquidate your collection; it will be easier to sell if the paper is in
good condition. Good dealers will rate the scrip on the basis of quality
and significance; these ratings are one place to start in judging
whether you might want to buy a particular item.
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