Money Angles

By Andrew Tobias

Not that it's any surprise. When Irises sold for $53.9 million in 1987, any fool could see the Gogh-Gogh years were drawing to a close. No, it was not the peak; three years later, Van Gogh's Portrait of Dr. Gachet brought $82.5 million. But this is often the way it works, whether in the art market or any other -- a long run-up and then a final speculative blow-off.

A generation earlier, in 1966, the Dow Jones first flirted with 1000. It would eventually climb a bit higher, and it would not touch bottom -- 577 -- until eight years later. But with hindsight, 1966 was really the beginning of the end.

I'm not suggesting we're in the midst of another eight-year decline, one that started in 1987 -- though if we are it's at least comforting to know we're halfway through it. But one sure sign it's a bear market in collectibles at least -- whatever stocks may do -- is that I recently got a call from a historic-documents salesman. When someone calls out of the blue to sell you Abe Lincoln autographs, you can be pretty sure times are tough in autograph land.

O.K., it wasn't entirely a cold call. Years earlier, at an investment conference, I had sauntered over to the Historic Documents booth (between Oil Drilling and Annuities) and had been struck by a remarkable letter from Darryl Zanuck to Marilyn Monroe. It was on 20th Century Fox letterhead, scolding Marilyn for her "completely impractical request" to have a special dialogue director work with her on the set of Don't Bother to Knock (a movie rated "don't bother to see"). "You have built up a Svengali," the letter read in part, "and if you are going to progress with your career and become as important talent-wise as you have publicity-wise then you must destroy this Svengali before it destroys you."

"How much?" I asked the booth person, pointing to the letter. "You're kidding!" I said, when she pointed to the price. But I left my name and address anyway, in case they ever got serious about selling it. (They were asking $8,000. I was thinking more like $300.)

That was years ago, but from then on I would periodically receive catalogs of historic documents. A group shot of Nixon, Ford, Carter and Reagan, autographed by each: $4,000. A nice letter from George Washington: $35,000. An autographed photo of Sitting Bull (signed "Sitting Bull"): $17,500.

So it wasn't exactly a cold call, in that I had given this outfit my name once upon a time. And the caller wasn't exactly a college kid reading a script; he was a former curator of the Smithsonian. Still, I was getting all set to find some delicate way off the phone ("Oh, gosh, the ambulance is here") when I remembered the Marilyn letter. Forget Abe Lincoln ("Dear Sir: Herewith I send you my autograph, which you request. Yours Truly, A. Lincoln": $5,000). What about Marilyn?

It seems this particular letter was indeed still available, and now its price was $9,500. Bear in mind that this was not a letter from Marilyn Monroe, merely addressed to her (611 N. Crescent Drive, Beverly Hills), and that if it was still available, that meant nobody, apparently, had wanted it at $8,000.

This gave me several ideas. The first was that if letters to famous people could acquire such value, I should myself write a ream of them to Madonna, which, when they came back stamped "insufficient address" (we've lost touch), I would save for my old age and then sell.

My second idea was to buy stock in News Corp., which owns Fox, because so far Wall Street has focused only on the value of its film library. What about all its business correspondence? All those canceled checks? A gold mine!

My third idea was to haggle.

I won't tell you how much I wound up paying for my Marilyn letter because you'll think I'm a fool. (All right, I paid $7,500 -- more than I've ever spent on a car.) And I won't tell you how I managed to get the price down even that little bit. (All right, as part of the deal, I agreed to buy a second item, for even more -- a letter from Albert Einstein describing Hitler as a lunatic -- and so got a little bit of a break on both.) But I will tell you that when novices like me get into markets they know nothing about, it's usually the beginning of the end.

So what are we to make of the fact that "small investors are trading more actively than any time since the 1987 crash," as the Wall Street Journal reported last month? Could 1992 wind up being the worst stock market year of the '90s just as 1932, 1942, 1950, 1962, 1974 and 1982 were the worst years of their respective decades? In five of those six "worst years," FXC Investors notes, the Dow dropped well below its book value. The '60s were the exception; at its nadir, 536 in 1962, the Dow was 33% above book. But with today's Dow Jones at 2900 and its book value around 1330, if 1992 should prove to be one of those icky worst years -- even one as relatively painless as 1962 -- it would drop more than 1000 points.

Of course, scary numbers can always be found. There are loads of good things that may fake out the pessimists: low interest rates, reasonable energy prices, world peace, free trade and fabulous technological progress for starters. So by no means should you read this and dump all your stocks, let alone start buying up signed photos of Sitting Bull.

But I do think you should pause before spurning the safety of a savings account or Treasury bill just because rates are low. Stocks are no bargain (though some fire-sale real estate may be). And I think that Albert Einstein, if not Marilyn Monroe, is likely to loom as large 1,000 years from now as Van Gogh. So given the choice between a little piece of Einstein for $15,000 or a work by Van Gogh for $15 million (and given $15 million), I would opt for the Einstein, spend a further $28 on socks (to give the economy a little boost) and invest the rest someplace safe.