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The Honolulu Advertiser

Posted on: Saturday, May 14, 2005

Vintage cars in the garage outrace stocks on Wall St.

By Matt Krantz
USA Today

As Darth Vader would be quick to note, the Force is stronger than the Nasdaq.

The major stock indexes have gone almost nowhere since 1998, with the Nasdaq bringing up the rear. The increasing value of "Star Wars" action figures, muscle cars, stamps and coins puts stocks to shame.

Advertiser library photo • March 25, 2004

Of course, that's not saying much.

You'd have to live in another galaxy not to know that the Nasdaq composite index has gone nowhere in more than six agonizing years and is Wall Street's equivalent of light years away from its high. But adding to that indignity for long-suffering stock investors is the fact practically every asset, ranging from steel and coffee, has done better.

Even assets not thought to be investments, ranging from "Star Wars" action figures to muscle cars to baseball cards, have put stocks to shame.

It's just the latest and most bitter reminder that all three major U.S. stock indexes have gone almost nowhere since 1998, with the Nasdaq bringing up the rear after its slump in 2000.

In fact, of the 19 alternative investments that USA Today examined — ranging from baseball cards to Longaberger baskets and rare coins — just about the only way to have done worse than investing in the Nasdaq's technology stocks was to take a flier on high-end Pez dispensers.

"The stock market has tanked and people have lost everything, with nothing to show for it," says Colin Comer, president of Colin's Classic Automobiles in Milwaukee.

"If a guy has an incredible car in his garage, not only are his buddies impressed, but he knows that no matter what happens in the market he has an incredible car that is not going to vanish," Comer says.

Among assets that have beat stocks during the past six years:

Classic cars

Stop calling them greaseballs or gearheads. Car enthusiasts have made more money than many stock investors, and probably had more fun in the process.

Anyone with the foresight to predict the craze over gas-sucking 1970s muscle cars scored the automotive equivalent of getting in on a hot dot-com initial public offering. Back in 1998, for instance, the 1971 four-speed version of the Plymouth Hemi Cuda Hardtop could have been had for $60,000. The price now: a cool $600,000, or a 900 percent profit, Comer says.

But it's not just about "shaker" hoods and spoilers.

Had you spent $137,000 to buy five benchmark cars in 1998, including the 1957 Chevy Bel Air and 1981 Porsche Targa, your car collection would be worth $293,000 today, says Hagerty Insurance, a collector car insurance company that values vintage wheels.

Car collectors "are not just investors," Comer says. "These are people who are enjoying the return on their investment, but enjoying the cars even more."

'Star Wars' toys

If you passed up a deal to buy the Luke Skywalker action figure in 1998, kick yourself. The toy has skyrocketed faster than a TIE Fighter into the canals of the Death Star.

The original Darth Vader and Luke Skywalker action figures, pearls in any "Star Wars" fanatic's collection, could have been yours for just $605 in 1998, complete with the coveted packaging. Those two figures would now fetch $1,400, a 131 percent gain.

Joel Boblit, president of online toy seller BigBadToyStore, says the right toys can bring Internet bubble returns every year. "Stuff that people collect, they are generally passionate about and will pay a premium for," he says.

Oil and gold

So maybe you're not a car person and prefer more traditional investments. The rising price of Texas tea has made big returns for investors. Crude-oil futures prices, which measure the price of oil, have jumped 245 percent since 1998. Oil prices have risen so much that they've become a factor that has weighed on the stock market, says Jack Ablin, strategist at Harris Trust and Savings Bank.

It's not just "black gold" that has been a big winner. Fueled in part by the weakness of the U.S. dollar relative to other currencies, rising demand for bullion has driven gold prices up 46 percent.

Before jumping into any of these, remember the standard and wise advice: Past performance does not guarantee future results.

Stamps and coins

Even these hobbies have paid off more than stock investing. Michael Schreiber, editor of Linn's Stamp News, points out that stamps have appreciated at a relatively stable 3-percent-a-year clip since 1998, giving investors steady returns.

"Discerning collectors have appreciated the beauty of classic stamps for more than 100 years, and market demand continues to support higher prices," he says.