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Taking Stock

Scripophily, the colllecting of paper stock and bonds, offers a fascinating glimpse into companies' histories.

Numismatists collect coins. Philatelists deal in stamps.

So what do you call somebody who has a passion for acquiring old stocks and bonds?

Try scripophilists.

Scripophily, pronounced "scrip-af-il-ly," picked up steam as a serious collecting pursuit in the mid-1970s.

Today there are thousands of collectors worldwide in search of scarce, rare and popular stocks and bonds.

The word itself is a combination of English -- "scrip" represents an ownership right -- and Greek -- "philos" means to love.

One person in particular who loves to chase down old securities is Bob Kerstein, founder of

Scripophily.com.

An accountant by trade, Kerstein turned his back on the corporate world in the mid-1990s to launch Scripophily, in order to turn his hobby into what is now the leading Web site for stock collectors.

"Over the years, there have been millions of companies which needed to raise money to get their businesses started," says the Virginia-based Kerstein. "Each company had their own story as to how they did it. These certificates give us a piece of that story."

A Good Time to Buy Enron Stock

Not every corporate story ends happily.

But just because a stock loses all its value on the open market does not mean that it's not worth anything.

According to Kerstein, some of his biggest sellers are stock certificates of failed dot-com companies, as well as huge financial frauds like

Enron

, the second-largest business failure in American history.

Scripophily offers a number of

Enron stocks, including a rare engraved certificate from 1989 signed by its late CEO Kenneth Lay for $375.

The document has an ornate border around it with a vignette of a man and the company logo.

However, this particular stock does not have the telltale crooked "E," as it was issued before Enron switched to its now infamous logo.

And it's not just stocks.

Scripophilists search for many variations of equity and debt instruments such as preferred stocks, warrants, cumulative preferred, bonds, zero coupon bonds and long-term bonds.

And like classic baseball cards or antique stamps, there are many factors that determine the value of an antique financial document including condition, age, historical significance, rarity and the type of engraving process.

Signatures are also very important in assessing the value of a document, which is why Scripophily is also a popular arena for autograph collectors.

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On Kerstein's site, autograph hounds can find Standard Oil Company stock signed by John D. Rockefeller, Eastern Air Lines stock with Captain Eddie Rickenbacker as president and a Buckeye Steel certificate signed by President George Bush's great grandfather, Samuel Prescott Bush.

Losing Stock

Another factor helping the growth of Scripophily is the huge decline in paper-stock issuance, making stock certificates themselves all the more rare.

As a result of legislation designed to foster corporate cost-cutting, only a handful of the 50 U.S. states still require public companies to issue physical certificates.

Stock brokerage firms and many of the issuing companies enthusiastically support this effort, which is known as dematerialization.

The move toward dematerialization seems to be just fine with most investors, who would rather use book-entry stock ownership, in which the issuers record all details of ownership electronically -- it's more convenient than locking stock certificates away in safe-deposit boxes.

According to the Securities Industry Association, book-entry ownership can be accomplished by having the securities held in the investor's account at the broker-dealer, a method known as putting it in "street name."

Another alternative is the use of the direct-registration system, where investors can have their positions electronically recorded by the issuer or at their transfer agent.

AT&T

(T) - Get AT&T Inc. Report

became the first company in the United States to do away with paper certificates. Investors now receive a computer-generated report showing them how many shares they have outstanding.

For the few investors who still prefer holding their shares in physical form, it can be a very expensive proposition.

To go through a stockbroker, says Kerstein, you will have to pay the trading price of the stock, plus the commission the broker charges, plus a stock-issuance fee.

Depending on whom you use as a stockbroker, the commissions can be anywhere from $15 to $50, and the stock-issuance fee can be anywhere from $50 to $100 per certificate.

"Due to the high cost of processing, risk of loss of certificates, handling costs and so on, it is clear the trend is toward the elimination of the paper stock certificate," says Kerstein.

That is certainly helping Kerstein's business.

While the supply of new certificates reaching the collector market is dwindling, the hobby of scripophily continues to grow.

Despite the move toward electronic ownership, one company that may continue printing stock certificates is

Disney

(DIS) - Get Walt Disney Company Report

. The Disney stock certificate features Walt Disney himself surrounded by his classic characters, and is a popular gift for collectors and noncollectors alike.

Framed single shares of Disney are available for purchase on sites like

OneShare.com. The price fluctuates, of course, with the price of the stock itself.

Stanley Greenberg is a freelance writer living in Long Island. Aside from his long running "Over 60 ... And Getting Younger" column in the Syosset-Jericho Tribune, his work has appeared in Back In The Bronx magazine, as well as multiple weekly newspapers and publications on Long Island.