Larry Campbell’s eyes light up as he describes his investment’s habit of nuzzling his wife, Karlyn’s shoulder before a race. It’s obvious that it’s not about the money.

Which is a good thing, because the fact that the Salem-based lobbyist and former Republican Speaker of the House and Oregon legislator is actually making money on his racehorse business is pretty much a fluke.

In 1996, the year after he retired from the legislature, Campbell went into a partnership with long-time friend and lobbyist David Nelson, becoming part-owner of quarter horse foal In Search of Fame.

A few years later, he bought out Nelson, retaining full ownership of the horse, which is technically owned by Campbell’s family lobbying business, The Victory Group. He has since invested in a half-dozen other horses, but In Search of Fame, nicknamed “Vic,” claims his strongest allegiance–to date he’s only missed two of the horse’s 42 races.

And in return, the horse has delivered 25 wins, with another 10 finishes at either second or third.

The strong racing record–and the accompanying winner’s purses–means that The Victory Group, whose offices are strewn with In Search of Fame memorabilia from coffee mugs to bridles, is actually making money on its horse division, coming out ahead on income over expenses every year since 1999.

Campbell readily admits his investment success is pure luck. The odds dictate that In Search of Fame was just as likely to be a racing dud as a success and as a reminder he keeps a hand-written note from Nelson outlining the risks of investing in racehorses.

But as with many so-called alternative investments–whether it be racehorses, antique cars, modern art or memorabilia–the investor’s motivation is passion over money.

For example, consider retired Wells Fargo Executive Vice President George Passadore’s collection of special-interest cars. Passadore keeps six vintage autos and two motorbikes in what he calls his car barn in Southeast Portland. But step inside the non-descript building and discover not an investment collection, but a labor of love.

The front section of the cavernous garage was remade into a 1950’s-era diner, complete with a kitchen, soda counter and vinyl bar stools. The walls are covered with retro memorabilia: table-top radios, original art and a flock of gas station signs that he’s collected over the years from antique shops and swap meets. Three original murals featuring ‘50s-era cars are splashed on the walls and sliding panels blanketed with family photos fill in any gaps. It’s obvious that the “car barn” does double duty.

“I have a big family so I wanted to have a place where we could have parties,” explains Passadore, who bought the building in 1994 and spent two years fixing it up–a project that hasn’t really ended as he continues to pick up vintage gas pumps and slip them in among the other memorabilia.

A velvet rope separates the diner from the car showroom and signs that advise against opening car doors are placed mostly for the benefit of curious grandchildren.

The car collection includes a 1957 Chevrolet BelAir convertible in classic candy-apple red and white. A 1959 Corvette Roadster, also red and white, sits nearby. Passadore’s newest purchase, what he calls his “Elvis Car,” is a 19-foot long 1960 Cadillac–he had it lowered two inches for effect and its black paint is polished to perfection. His 1965 Harley Davidson motorcycle has just 13,000 original miles. Every vehicle is in pristine condition and buffed to a reflective sheen.

To make room for the Elvis Car, Passadore sold a ’39 Chevy. He figures he’s owned 22 cars over the years. “I buy them all excited and then after a while I start looking at what else is out there,” he says.

Passadore says he bought his first car when he was in the 8^th grade—a 1929 Ford like the restored model that sits in his showroom—for $50 and a reel-to-reel tape recorder. He pays more for the cars today and estimates that his current inventory is worth about $225,000. But he still buys them for the simple reason that he wants to own and
drive them.

Still, he likes to characterize his purchases to his wife, Nancy, as an “asset transfer” and says he could unload any one of his cars by selling them within 48 hours.

But are they an investment?

“They all think they’re investing,” says Dale Matthews whose Memory Lane Motors in Portland sells an average of 275 cars per year, some to Passadore. “But I believe they’re buying toys. I don’t know of anybody who has pure investment vehicles.”

Matthews says most of his customers have gray hair and want to buy a car because they remember when it first came out, maybe even owned one. “If they happen to come out ahead on it when they sell, they’re happy. But that’s not why they buy it.”

Similarly, those with art collections rarely talk about resale value.

John Hampton, chairman of Hampton Affiliates of Portland, has an extensive collection of art both in his home and in the office, but doesn’t consider it to be an investment.

“I have an art collection but the pieces have never been purchased with the idea of appreciation,” Hampton says.

Shortly after he got married in the 1950’s, Hampton says he and his wife started the collection by working through the Oregon Art Museum’s rental sales gallery. They paid to rent a piece for three months and at the end of that time the rental price was applied to the purchase of the painting if they wanted to buy. “It was a way to buy attractive paintings at modest prices,” Hampton says.

Among Hampton’s collection are works by Mike Russo, Louis Bunce, and Jack McLarty.

“We accidentally bought some paintings that became quite valuable,” Hampton says. “But whatever appreciation there was, was accidental. We just wanted something besides the wallpaper.”

Laura Russo, whose Laura Russo Gallery in Portland has been in business for 17 years, selling several thousand pieces, says most art collectors aren’t in it for the money. “They buy what they really love and have a passion for rather than worrying about reselling it,” Russo says. “It doesn’t have a market like a stock. I never recommend that they buy art for resale.”

Russo, who has found paintings for corporate clients like Hotel Lucia and The Westin Portland, says that good quality work will hold its value, but nobody can guarantee appreciation.

The same goes for racehorses. If anything, the worry there is depreciation. Yet Larry Campbell still considers his an investment.

“They were an investment from Day One,” Campbell says. “It could have been that we’d dive in and spend a lot of money and then wake up one morning and find that we lost it—we did some of that in the stock market.”

And Campbell has more than one business interest in horse racing. His Victory Group consulting firm counts Magna Entertainment, the company that owns Portland Meadows—In Search of Fame’s home track–and the Multnomah Greyhound Park, among its clients.

But any question about Campbell’s feelings for In Search of Fame are quickly answered when he’s asked what will happen to the 8-year-old horse when he’s no longer physically able to race.

“In Search of Fame,” Campbell says. ‘He’s got a permanent home with our family.”

BrainstormNW - March 2004