Collecting For Investment- Answered

Jon Brand

Jon Brand

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May 28, 2007
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This thread represents only my personal experience with this issue, but PLEASE feel free to chime in with your own experiences and/or thoughts.

Something happened this week that really changed my entire outlook on knife collecting. I have always bought knives that I liked, but the idea of resale and investment always loomed in my mind (and not too deeply). It still does, and always will. However, it turns out that no matter what something is worth and no matter what kind of potential profit it will bring I won't budge if the knife has sentimental value to me, or at least something other then monetary value. I have been offered decent money on knives in the past that I didn't want to sell and I never caved in. I only sell knives that I don't need to keep. But after an offer that I passed up recently (and maybe shouldn't have) I realized that considering these knives as investments is like lying to myself. I can only forsee selling them if it were an emergency, which could be the case one day but for no other reason. Therefor, my knives are meaningless as investments no matter what kind of dollar they bring. I don't know where you are Peter Gil, but you certainly know how stubborn I am when asked to sell ANYTHING, and maybe some of you others do. No, Peter is not the one who made me the generous offer this time around- just someone who knows I won't entertain offers on certain things.

What I learned? I need to mostly separate collecting and investing or I won't be happy.

What are your thoughts on this?
 
I'm a little different Jon, but then the same too.
I never buy a knife just to sell it and there are knives in my collection that I will never sell even though I have been offered A LOT of $$$ for them. In fact, a copy of one of my knives by a maker (wasn't the maker who made my knife originally) sold to a Saudi Prince for over $20,000. That's 7-8 times what I paid the maker for the original.

But then on the other hand I enjoy acquiring knives keeping them several years then selling them to another collector to enjoy. I replace the knife with and another beautiful piece which is usually an upgrade from the piece I sold and every one wins and is happy. Jon, I believe I've made you happy quite a few times. ;) :):):)
 
Jon, I share most of your thoughts but don't see the conflict. Just because you wouldn't sell unless you absolutely needed the money, doesn't mean you can't consider it an investment. It just means the value of ownership is worth more than the value of the cash in hand under your current circumstances. Like you said, that could change and the knives would likely go before other investments, like your house. That's true of almost any investment, they are prioritized. It's just part of an asset portfolio that has both monetary value and intrinsic value. If I buy a house that is nicer and bigger than my family needs, it's a non-depreciating asset (in Texas) so I figure it's a good investment, even though I would never sell it unless circumstances change and I needed to downsize. Art is another example. High end art collectors buy what they like and sell when they need cash or get tired of looking at that piece. They might sell all other liquid assets before the art, because they like it, but its still an investment.

I don't think of knives as investments first, I generally buy what I like but I DO pay attention to whether certain maker's knives at least hold value if not increase in value. That's what justifies buying more expensive knives. If you buy knives that you know will lose value, you can't consider it an investment. On the other hand, if you at least focus on those that hold or increase in value, you are investing cash in another asset.

That's my two cents. Your still on the right track as far as I'm concerned.
 
mwschilling said:
Jon, I share most of your thoughts but don't see the conflict. Just because you wouldn't sell unless you absolutely needed the money, doesn't mean you can't consider it an investment. It just means the value of ownership is worth more than the value of the cash in hand under your current circumstances. Like you said, that could change and the knives would likely go before other investments, like your house. That's true of almost any investment, they are prioritized. It's just part of an asset portfolio that has both monetary value and intrinsic value. If I buy a house that is nicer and bigger than my family needs, it's a non-depreciating asset (in Texas) so I figure it's a good investment, even though I would never sell it unless circumstances change and I needed to downsize. Art is another example. High end art collectors buy what they like and sell when they need cash or get tired of looking at that piece. They might sell all other liquid assets before the art, because they like it, but its still an investment.

I don't think of knives as investments first, I generally buy what I like but I DO pay attention to whether certain maker's knives at least hold value if not increase in value. That's what justifies buying more expensive knives. If you buy knives that you know will lose value, you can't consider it an investment. On the other hand, if you at least focus on those that hold or increase in value, you are investing cash in another asset.

That's my two cents. Your still on the right track as far as I'm concerned.
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That post is Worth A LOT more than two cents. ;) :D I agree and VERY WELL Said.
 
I couldn't agree more with Kevin about your post. Great post! Its not so much of a conflict for me as it is over-thinking semantics.

There will always be acceptations to my original post. I don't like selling MOST of the knives I sell, but I do it anyway. Its the ones I never thought about selling that I referred to.
 
There have been several posts that have come and gone that make me consider my purchases. What I have found is that I would rather not worry about the investment side of the equation and buy what I like when I can. I also want to use my knives and not have to worry about their value. I have too many to truly enjoy and use, so when I have time (never) I want to thin the herd to the top 10...20...30?? Maybe in 20 years when I retire and have some time I will figure it all out.
 
gga357 said:
There have been several posts that have come and gone that make me consider my purchases. What I have found is that I would rather not worry about the investment side of the equation and buy what I like when I can. I also want to use my knives and not have to worry about their value. I have too many to truly enjoy and use, so when I have time (never) I want to thin the herd to the top 10...20...30?? Maybe in 20 years when I retire and have some time I will figure it all out.
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That's good too. There's no right or wrong approach to collecting custom knives, only the way that works best for the individual collector and gives him/her the most enjoyment.
 
I could have written that my self Jon. I agree 100%, and not just because I have an eye on some of your collection. Sold some of my knives ONLY after my bike wreck and forced retirement.
 
I personally despise investment collectors because all they do is drive up rarity and price on a piece that someone who would have/could have bought in the first place for themselves. I personally will never buy from an investment collector because of this. One of the reasons I won't buy a Hinderer or the like on the secondary market.
 
Helrazr said:
I personally despise investment collectors because all they do is drive up rarity and price on a piece that someone who would have/could have bought in the first place for themselves. I personally will never buy from an investment collector because of this. One of the reasons I won't buy a Hinderer or the like on the secondary market.
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I suggest you try looking at it from a "big picture" perspective and how appreciation in value of maker's knives benefits the custom knife community in general as opposed to how it affects you personally.
This may help you to be less 'bitter' towards collectors who don't like only receiving a fraction of what they paid when wanting or having to sell their custom knives.

Appreciation in value also has a very positive impact on the growth and creativity of custom knives in general.
I'm not referring to the relatively small segments of knives that shoot up 50%-100% or more in a short period of time that's brought about by collectors having to have what someone 'says' is "HOT" or is trying to create a market in, but the modest appreciation in value over time which promotes a stable pricing structure brought about by collectors buying and selling responsibly.
 
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Hellrzr, instead of refusing to buy, you should instead take great pleasure buying from an investor/collector after they've dropped their price to 50% of original cost.

Remember most investor/collectors, irrespective of the collecting field, do not profit.

gga357, don't wait until retirement. Being able to realize just a break even situation requires the right timing. The hot guy today might not be hot in 20 years when you want to sell.
 
brownshoe said:
Hellrzr, instead of refusing to buy, you should instead take great pleasure buying from an investor/collector after they've dropped their price to 50% of original cost.

Remember most investor/collectors, irrespective of the collecting field, do not profit.

gga357, don't wait until retirement. Being able to realize just a break even situation requires the right timing. The hot guy today might not be hot in 20 years when you want to sell.
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True. Making time is the key. I joke with family that we work so hard to make our life complicated with many responsibilities and are always choosing one thing to do against the many we want to get done at any given time. The little ones make some of those decisions easy, most of the time.
 
Helrazr said:
I personally despise investment collectors because all they do is drive up rarity and price on a piece that someone who would have/could have bought in the first place for themselves. I personally will never buy from an investment collector because of this. One of the reasons I won't buy a Hinderer or the like on the secondary market.
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I think you are confusing "investor collectors" with "market flippers" (no pun intended). Like Kevin said, those are guys who buy hot maker's knives quickly or via lottery with the sole purpose of turning it for a profit. That is not what the rest of us are referring to when we discuss investment as part of the decision making in collecting knives. Most of us are not dealers or flippers of custom knives. In fact, quite the opposite. That was Jon's original post that he can't even bring himself to sell because he likes his knives too much. I too very rarely sell a knife but I still consider expensive knives an investment.
 
In the seventies I didn't know anything of knives.I am from Europe.The $ was then extremely cheap, some older friends said I had to buy Loveless, Centofante,Moran .I did but I didn't know that some were rather expensive.But you only live once.I bought them NOT because I loved them but because it was a sensible thing.In the eighties the value of the $ exploded and I sold them all with extremely high profit. So was it a good investment, yes but only because the fluctuations of the $.Now I only buy what I like and if I want to use them I will do so.
My advice: enjoy every day of your life, buy what you can afford and don't lie to your wife when you tell the price:rolleyes:
 
Oh my gosh, entered on this thread to read some info and stories related to investments, and found your story, deovolens, extremely amazing. You are such a lucky man ;)
 
I do worry that by not selling whilst the maker is known and there are people who appreciate that maker around you may end up with some great old knives by makers new collectors don't want one day.
 
Of course collectors are hesitant to sell their investment. Purely aside from monetary price our collections bring us a never ending source of entertainment. You are not going to recover that at double the going rate.

n2s
 
Never say never.

Like all things, I try to find a balance. I have sold many knives (but never with the intent to make a profit) and I have knives I think I will never sell due to sentimental value.

My dad was in a similar situation (only with firearms) but I know he sold some of his best to help with college tuition for 3 kids. I also have 3 kids. If I am ever in that situation - need money for tuition - or anything else for my kids - all bets are off. The only person(s) I love more than myself are my kids.
 
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