Do dinosaur fossils make good investments?
When it comes to scarcity value, dinosaur fossils are hard to beat. But are they good investments, and how do you go about valuing the remains of creatures that roamed the earth millions of years ago?
Prior to Sue, a 40-foot-long Tyrannosaurus rex skeleton, no fossil had ever sold for more than USD600,000. Only a handful had broken through the USD200,000 barrier.
Sotheby's predicted that Sue, by far the most complete T-Rex fossil ever found, could fetch upwards of USD1 million at auction. But when she went under the hammer in October 1997, Sue shattered all expectations, fetching USD8.4 million, including the buyer's premium.
Sue's extraordinary price tag showed the power of popular culture to influence the value of prehistoric relics. During much of the 1990s, the world was in the grip of a dinosaur craze, played out in movies and television shows. More than any other, Stephen Spielberg's 1993 blockbuster Jurassic Park recast dinosaurs in the public imagination as much smarter and more agile than previously thought. Sue's auction came a few months after the release of the film's sequel, The Lost World.
Macroeconomic factors also appear to play a part in determining the price of prehistoric assets. In October 2020, when quantitative easing had brought the S&P 500 past its pre-pandemic high, an Abu Dhabi museum shelled out USD31.8 million at a Christie's auction for a 35-foot-long T-Rex called Stan. By contrast, at the onset of the global financial crisis in 2008, a 25-foot-long Triceratops skeleton failed to meet its EUR500,000 reserve price at auction.
Considering that Stan is smaller than Sue and only about 70% complete by bulk (see Figure 1), its record-setting sale also implied a considerable appreciation in the value of T-Rex and other dinosaur fossils in the intervening period.
Why Sue and Stan stand out from the pack
Fossils of vertebrates – animals with backbones – are much rarer than those of invertebrates such as snails, trilobites and corals with shells, armor or exoskeletons that fossilize readily. And among vertebrates, T-Rex fossils are rarer still: only about 80 have ever been found, and far fewer near-complete specimens.
There are six other factors to consider in valuing a dinosaur fossil, according to Mike Triebold, President of Triebold Paleontology, which was hired by Christie’s to remount Stan prior to auction:
- How well-preserved it is – both Sue and Stan are very well preserved, thanks to highly specific environmental conditions.
- The quality and accuracy of reconstruction – it can take years to properly prepare a fossil after excavation. One of the most iconic reconstruction mistakes was the first discovered Iguanodon, which for 50 years was displayed with its thumb-horn atop its nose.
- Superlatives – referring to the uniqueness of the specimen. If it is the largest, smallest or only one of its kind, “there is and should be a premium attached to the price,” Triebold said.
- Completeness – though this is controversial. Completeness can be exaggerated by sellers, and can be based on bone mass or number of bones. “What matters is which bones are preserved, far more than how many. If you have 35% of a skeleton but have representative elements of each part of the body, a professional can fill in the gaps” using 3D printing, he said.
- Whether the bones are from a single individual – composites, or mounted skeletons made from more than one individual, are frowned upon. With technology, complete mounts can be created without combining individuals.
- Presentation – a clunky, stiff mount can degrade the fossil’s value, explained Triebold. His company remounted Stan in a more lifelike pose. “We posed it to be taking a step toward you as you look at it, with the head low and focused on you with its mouth slightly agape.
Three other things tend to elevate values, said Triebold: teeth, claws and ornamentation.
“A carnivore with big, showy, meat-eater teeth is not only rarer than most herbivores, but reaches down into our own primitive fears of being eaten. Many of those carnivores also have large, sharp claws. These tend to be at the top of the price ranges.”
“Tough, herbivorous antagonists with spikes, armor, horns and other cranial ornamentation are next in line on the demand spectrum as their defensive gear is sometimes very showy, such as the frills of ceratopsians (see Figure 3) or lambeosaurine crests,” Triebold added.
Figure 3: The Triceratops is the Best-Known Ceratopsian
Image credit: Kevin Schafer/Getty Images
Bone of contention
Strong demand from private collectors has seen rare fossils increasingly showing up in corporate headquarters and homes of the rich, raising concerns among some that this could deprive museums and public research institutions of access to valuable specimens. But others point out that evidence of private collectors pricing out museums is mixed — after all, both Sue and Stan wound up on public display.
Even when specimens do end up in private hands, owners are often happy to provide access to scientists. And because private collectors have driven up the value of fossils, there are greater efforts to collect and preserve them. Even so, an untold number of fossils are lost to the elements each year.
Another potential benefit of the growing legitimate private market is that it could help curb the black market supplied by crime syndicates smuggling fossils across borders.
Hollywood actor Nicholas Cage indirectly fell victim to the fossil black market when he purchased a Tyrannosaurus bataar skull at auction for USD276,000 in 2007. When it was revealed that the skull had been stolen from Mongolia, Cage voluntarily returned it.
Most of the world's major fossil-bearing deposits are in countries where fossils are deemed property of the government, including the Gobi Desert in Mongolia, the Chengjiang and Qingjiang sites in China, Campanha in Brazil and Argentine Patagonia. An important exception is fossils found on private land in the US.
Dinosaur buyers beware
This is one of the many reasons to do serious due diligence before buying pricey fossils.
“I would highly recommend using a trusted, knowledgeable advisor if you are just learning how to safely purchase fossil specimens. There are definitely some minefields to navigate when considering a valuable fossil purchase,” said Triebold.
“Not all sellers are open and honest about their specimens. You or your advisor needs to know how to tell what is real bone and what is printed, cast or sculpted, and if the skeleton is a composite or not. Never take the word of the seller alone. Hi-res digital photography, UV light and a Geiger counter are some of the tools of the trade of someone making an evaluation, plus years of experience looking at fossils.”
Even Christie's had to pull a T-Rex named Shen from a 2022 Hong Kong auction after a researcher pointed out some of the bones were likely replicas from Stan.
More – and less – affordable options
Near-complete T-Rex and Triceratops skeletons are, of course, not accessible to the majority of people. But Triebold points out that parts of well-known dinosaurs can be obtained for far less. A Triceratops femur, for example, might cost as little as USD4,000, though a skull will set you back at least USD350,000.
Meanwhile, there are less well-known dinosaurs that could prove even more valuable than the household names. A Teratophoneus, for example, might even top its bigger cousin T-Rex: only four specimens have ever been found.
With recent media reports suggesting the dinosaur fossil investment craze has peaked for now, there may be bargains to be found. However, unlike some other passion assets like fine wine, there is standardized source of price data for dinosaur fossils, so whether that is true is difficult to ascertain.
Considering that prices of fine wine and collectibles have witnessed an end-of-easy-money slump after peaking on the back of pandemic-era stimulus measures, it could be that fossil sellers' price expectations have also tempered. But reports of the demise of dinosaur fervor are likely exaggerated. They may have been extinct for 66 million years, but the fascination they invoke is timeless.
Read the full collection
- How sneakers took a grip on investment portfolios
- A grounded approach to investing in space technology
- Investing in fine wine
You may also be interested in
Want to learn more about Private markets?
Explore our selection of professional learning options, research, and thought leadership designed to help you advance your private markets career with confidence.
