Are we ruining the secondary market?

[Kevin Jones]

However, if you look at the lead in to this forum, it says the place to find "information" about custom knives,... not "opinions" about custom knives. There is a difference.

... which is something we all need to work at...

Glad to see you are including yourself, as you probably have the most and definitely the most bizarre opinions of anyone on here.

 

[peterinct]

The amount of activity this thread has created obviously shows the high level of interest in the "secondary market". What I also percieve is how many different perspectives exist.

Brightred - I think you have a most enviable perspective although I would venture to say uncommon, to say the VERY least.

There are a myriad of viewpoints, all valid, and based on that persons perspective.

I really don't think there is only one way to collect/invest in anything not just knives. There are always intangibles that come into play, as do changes in the market, the economy, sickness, death and what have you.

Undoubtedly, Les knows HIS business and how to earn a living being an entrepreneur buying and selling knives.

But I think each collector/investor needs to focus on what gives them enjoyment and if a few $$$ can be made...cool

That is what I get out of reading this thread.

Peter

 

[Kevin Jones]

No offence Kevin,... but nothing is broken and nothing needs fixing.
Things are the way they have always been,... and how they should be.

Worrying over it spoils the fun.

Just relax and appreciate the knives for what they are!

That which is of value will always be of value...

Your tastes and your opinions are as valid as anyone's...

Well Tai, that answers my opening question. :thumbup:

Wish you would had answered sooner as the other 100 post have been a waste of everyones time.

 

[betzner]

The amount of activity this thread has created obviously shows the high level of interest in the "secondary market". What I also percieve is how many different perspectives exist.

Brightred - I think you have a most enviable perspective although I would venture to say uncommon, to say the VERY least.

There are a myriad of viewpoints, all valid, and based on that persons perspective.

I really don't think there is only one way to collect/invest in anything not just knives. There are always intangibles that come into play, as do changes in the market, the economy, sickness, death and what have you.

Undoubtedly, Les knows HIS business and how to earn a living being an entrepreneur buying and selling knives.

But I think each collector/investor needs to focus on what gives them enjoyment and if a few $$$ can be made...cool

That is what I get out of reading this thread.

Peter

Very well put. In total agreement with you, Peter..

 

[Kevin Jones]

I doubt that any amount of education will have a visible impact on the secondary market. What education could do, however, is give some collectors an understanding that there are makers out there, name makers, who probably are making knives much like the ones the collectors are looking for.

Were such collectors knowledgeable about the "name" collectors who make the kind of stuff the collectors like, the collectors would fare much better upon re-sale and perhaps avoid larger losses, or avoid them altogether. This is perhaps where education would help. BUT in doing so, the educational process would probably be moving them away from buying product from up-and-coming new makers. Do we want that to happen?

But to think one can impact the secondary market in any meaningful way, through educating collectors, I don't think so. The market is just too large, too international, too diverse. The reach of any association would be so limited in comparison, and the educational program probably limited that much further, that any impact would be infinitely small.

Bob, teachers can't educate everyone either, but that doesn't stop them from educating the ones they can.

If the CKCA is successful in getting members that address problems instead of just bitching about them, than we will have a large impact on the customs industry over the next 10 years. We currently have 21 such members and will soon be looking for many more.

 

[betzner]

Bob, teachers can't educate everyone either, but that doesn't stop them from educating the ones they can.

If the CKCA is successful in getting members that address problems instead of just bitching about them, than we will have a large impact on the customs industry over the next 10 years. We currently have 21 such members and will soon be looking for many more.

I should have probably ended my commentary with exactly this. Education can never reach everyone but that is, as you say, NEVER a reason not to make the attempt.

 

[Tai Goo]

Well Tai, that answers my opening question. :thumbup:

Wish you would had answered sooner as the other 100 post have been a waste of everyones time.

The way I see it,... no one is "forcing" us to make knives, buy knives or sell knives,... so why not all just be happy?

 

[Tai Goo]

Tai, take the peyote off the edge of your forge

No Man! It's not peyote,… It's my "borderline" mathematical genius at work again!

It gets a little "freaky" sometimes...

Just weed through my posts and every now and then, one might make sense.

 

[Kevin Jones]

The way I see it,... no one is "forcing" us to make knives, buy knives or sell knives,... so why not all just be happy?

Tai, if I were any happier I wouldn't be able to stand it.

I just read your last post; you're not right.

 

[Tai Goo]

Hi Tai,



It's best you leave the secondary market to the professionals.

As there are those who do this every day...not merely "tinker" at it.

We all know you were joking. I know I laughed out loud when I read your comments.

Les Robertson
Custom Knife Entrepreneur
www.robertsoncustomcutlery.com

I like you Les!
However, after over 30 years in this business, I actually know quite a bit about the secondary markets, because cycles in the primary and secondary markets are connected. I've seen them come and I've seen them go... I know how the big wheels turn... or I wouldn't still be in this business.

I think most of what you say is spot on from "your" perspective,... but might not always agree with "how" you say it or how you come across,... "your perspective" is just one among many...


... and there is absolutely nothing wrong with that!

 

[Jose Reyes]

Kevin,

I think that after a learning curve most collecters do give future appreciation some consideration when making a purchase. That doesn't mean everyone is going to be as good at it though. Not everybody on Wall St. is making a fortune but they should all understand the concept of "buy low sell high".

I agree that a knife may have an inherent value, but that works both ways, whether the knife is sold above or below value. It's great when a seller can get top dollar for a knife, as he can put more cash in his pocket, but does that make it a good buy? Should the buyer have any expectation of appreciation within a reasonable amount of time in that case? To me it seems that it's more important to learn the current market so you can spot a good deal.

Despite all the rules though, sometimes you have to "sell now" or spot a "must have". That's why I think it's important to enjoy your pieces while you have them if you're a collector.

 

[Tai Goo]

Tai, if I were any happier I wouldn't be able to stand it.

I just read your last post; you're not right.

I'm never right,.... but you are always right!

I KNOW NOTHING!

 

[Tai Goo]

Hey Kevin, if you are happy,... then I'm happy!

 

[Les Robertson]

Hi Peter,

Undoubtedly, Les knows HIS business and how to earn a living being an entrepreneur buying and selling knives.

But I think each collector/investor needs to focus on what gives them enjoyment and if a few $$$ can be made...cool

I agree with what you say, in theory. The reality is, and I invite everyone to stand behind a table at a show like Blade and have people walk up with every type of knife you can imagine for trade or sale.

Each of these collectors/investors have focused and bought what brought them enjoyment.

It is odd though how many take exception when tell them:

1) you're not interested in buying the knife

2) you're not interested in trading for the knife.

3) you're not interested in the knife at all.

You would be amazed at the amount of people, who just 5 minutes before thought you really knew what was going on. When you answer 1, 2 or 3 you suddenly become an idiot.

Hi Tai,

That lead into what you said about the way I say things or how I come across.

I say things the way I do (having been called "harsh" by some) to eliminate wasting time at shows on or line with knives being offered to me which have little or no interest to me. This can be for a variety of reasons.

By writing or speaking like I do, I remove all doubt as to what collectors/investors will think I might be interested in.

This is why I no longer have people bring me factory knives, knives with, brass, nickel silver, mokume, giraffe bone (although I was just offered 3 knives in trade that had giraffe bone handles...apparently he doesn't read my postings on Bladeforums), camel bone or jigged bone (except on slip joints).

So I write and speak in a very blunt manner to save both myself and the collector/investor time.

I think if they want to cuss out someone it should be the person who sold them the knife and not the person who has to tell them its not worth half of what they paid for it.

Also, I appreciate the fact that you have been involved in custom knives for 30 years. No doubt you have seen the cycles, makers, styles and materials come and go.

However, having seen it from a distance....is not the same as having lived it for 24 years (over 13 being full time).

It's like me saying I know about what it takes to forge blades, what styles will sell the best, etc. While I can say that...I have never made a knife.

This goes back to what I was saying about asking collectors asking questions with regards to the background of the person giving the suggestions.

I am impressed that you understand that the primary market feeds the secondary market and that in turn feeds the primary market.

Tai with that bit of knowledge you are ahead of 75% of your peers.

Whenever I read posts like yours I am reminded of a VERY WELL KNOWN ABS MS who walked up to Bob Neal and myself at the Blade Show several years ago. He told us someone was selling one of his knives for less than half! He further suggested that we buy it. I said to him..."why don't you buy it?" He looked at me like I had just given him a Trig problem. He replied "I make knives, I don't buy them." I said "but you could buy the knife, clean it up and sell it and make a 30-50% profit and make a good customer happy, because your delivery time is so long."

He looked at me and said "Didn't you hear me the first time...I make knives, I don't buy them."

This boys and girls is why you don't ask 99% of the knife makers out there for advice on pricing your knives.

As well you leave the selling to the professionals.

Tai, congratulations you are in the 1%.

Oh, to answer the question of many who are reading this. Yes I bought the knife. Yes I made 50%. The client went to show the maker the knife and verify everything I told him about it.

I guess the only downside to this was my client had been waiting for 4 years with nothing but what he took to be as little or no concern of his order by the maker. After he bought the knife from me...he canceled his order with that particular maker.

Had the maker done what I suggested, he could have sold the knife to our client, made 50% on his investment and kept the other order.

Tai, this is why I say it's best to leave the buying and selling in the after market to the professionals.

Les Robertson
Custom Knife Entrepreneur
www.robertsoncustomcutlery.com

 

[Kevin Jones]

Kevin,

I think that after a learning curve most collecters do give future appreciation some consideration when making a purchase. That doesn't mean everyone is going to be as good at it though. Not everybody on Wall St. is making a fortune but they should all understand the concept of "buy low sell high".

I agree that a knife may have an inherent value, but that works both ways, whether the knife is sold above or below value. It's great when a seller can get top dollar for a knife, as he can put more cash in his pocket, but does that make it a good buy? Should the buyer have any expectation of appreciation within a reasonable amount of time in that case? To me it seems that it's more important to learn the current market so you can spot a good deal.

Despite all the rules though, sometimes you have to "sell now" or spot a "must have". That's why I think it's important to enjoy your pieces while you have them if you're a collector.

Good post Jose.

 

[CUTiger3]

Whenever I read posts like yours I am reminded of a VERY WELL KNOWN ABS MS who walked up to Bob Neal and myself at the Blade Show several years ago. He told us someone was selling one of his knives for less than half! He further suggested that we buy it. I said to him..."why don't you buy it?" He looked at me like I had just given him a Trig problem. He replied "I make knives, I don't buy them." I said "but you could buy the knife, clean it up and sell it and make a 30-50% profit and make a good customer happy, because your delivery time is so long."

He looked at me and said "Didn't you hear me the first time...I make knives, I don't buy them."

It's a shame that a "VERY WELL KNOWN ABS MS" can't understand simple arithmetic that would not pose a problem for my 12 year old daughter. Sad, very sad

 

[Bladeandbarrel]

It's a shame that a "VERY WELL KNOWN ABS MS" can't understand simple arithmetic that would not pose a problem for my 12 year old daughter. Sad, very sad

I have seen this story unfold many times over the years. I have seen very few knifemakers buy back their own knives but I have known MANY to lament their aftermarket pieces being sold "too cheap". Whenever I have suggested the maker buy the knife I always get a dumb look....then I realize that most makers have little to no cash flow, even after a show..

 

[HTMD]

What we are looking at are multiple cycles in multiple locations with multiple influences that are all interconnected. I think it is really quite complicated....

This makes sense and is the reason I have difficulty discussing modern custom knives as investments in isolation.

It seems odd that nobody has talked about diversification as a way to mitigate the inevitable risk of uncertainty in attempting to predict which knives will increase in value and which ones won't.

I'm referring to diversification within the realm of knives (my collection is actually biased toward antique knives with established records of appreciation over time - don't talk about it on this forum because antique knives are generally outside the scope of interest here) AND diversification in the larger world of asset allocation - real estate, financial instruments (stocks/bonds etc.), other collectibles and hard assets - gold for example.

So, without the protection of investment diversification and a strong income from my day job there's no way I could justify owning more than a few really nice knives (except for those Tai Goo blades which I find mostly irrisistable - and John Perry's too).

However, being diversified as described above has allowed me the pleasure of purchasing many beautiful knives by well-known world class makers as well as promising makers at earlier stages in their careers. Some will go up in value over time, some won't. I care, I guess. But I don't worry about it. I don't have to. Sure makes it easier to truly enjoy each and every knife I own.

But to address Kevin's initial question, I do my part to support the secondary market by promoting knives and knifemakers through my writing and photography - and also by never selling a knife for less than what I paid for it. Admittedly, I've only sold a few - but each one brought a profit. If I wasn't diversified and had way more money tied up in custom knives than was prudent, I'd be pretty nervous right about now (rumor is we're facing a recesson out there).

 

[Kevin Jones]

This makes sense and is the reason I have difficulty discussing modern custom knives as investments in isolation.

It seems odd that nobody has talked about diversification as a way to mitigate the inevitable risk of uncertainty in attempting to predict which knives will increase in value and which ones won't.

I'm referring to diversification within the realm of knives (my collection is actually biased toward antique knives with established records of appreciation over time - don't talk about it on this forum because antique knives are generally outside the scope of interest here) AND diversification in the larger world of asset allocation - real estate, financial instruments (stocks/bonds etc.), other collectibles and hard assets - gold for example.

So, without the protection of investment diversification and a strong income from my day job there's no way I could justify owning more than a few really nice knives (except for those Tai Goo blades which I find mostly irrisistable - and John Perry's too).

However, being diversified as described above has allowed me the pleasure of purchasing many beautiful knives by well-known world class makers as well as promising makers at earlier stages in their careers. Some will go up in value over time, some won't. I care, I guess. But I don't worry about it. I don't have to. Sure makes it easier to truly enjoy each and every knife I own.

But to address Kevin's initial question, I do my part to support the secondary market by promoting knives and knifemakers through my writing and photography - and also by never selling a knife for less than what I paid for it. Admittedly, I've only sold a few - but each one brought a profit. If I wasn't diversified and had way more money tied up in custom knives than was prudent, I'd be pretty nervous right about now (rumor is we're facing a recesson out there).

Yes Buddy, diversification of a knife collector's portfolio will no doubt reduce risk just as it does with more traditional investments. One could look at it as acquiring a mixture of the blue chips (Loveless, Johnson, Fisk) along with a few more risky up and comers (you insert example). No doubt "Knife Investors" practice this strategy religiously, however knife collectors and collector/investors may lack the discipline or range of knife taste to diversify.

The fact that I'm more focused in my collecting (ABS damascus knives) supports my being more collector oriented than investor. My risk however is mitigated by my collection of blue chip maker's knives though this is dictated by preference rather than by investment strategy.

Another subject we have not touched on here is the speculative knife investor or the investor that's in it purely for the appreciation of assets and how this "new breed" of collector has effected the secondary customs market.

This new breed was primarily introduced into the market as a result of the accelerated values of Loveless, Walker, Lake and a few other's knives. These investors tend to be fickle and will take profits and exit the market just as fast as they entered if or when these maker's knives start to experience a correction. This exit will of course intensify the correction.

 

[peterinct]

Hi Peter,

I agree with what you say, in theory. The reality is, and I invite everyone to stand behind a table at a show like Blade and have people walk up with every type of knife you can imagine for trade or sale.


Tai, this is why I say it's best to leave the buying and selling in the after market to the professionals.

Les Robertson
Custom Knife Entrepreneur
www.robertsoncustomcutlery.com

If your advice is to be followed, wouldn't that mean only the "professionals" should deal with you, as your market IS the secondary market ?

With all due respect, I understand what you are saying and I acknowledge you are undoubtedly a professional, but I do feel you don't undestand those of us that have far different perspective on buying and or selling knives than your business model.

I agree with your saavy of the business, but that is where we differ...I am NOT in the knife business. It is an enjoyable hobby.

Also, I can imagine the scenario you describe at shows, and I assure you, I wouldn't be one of the types of knife owners you depicted.

If I make it to Blade, perhaps i'll stop by to introduce myself...but I won't be trying to sell you any knives!

Peter