Collection Strategy & Economic uncertainty

[Kohai999]

Hi STeven,

You are on the right track...but not a complete answer...yet.

Anyone else???

I know where you are going, Les, but that is as much answer as I am providing ...some of these guys compete for the same knives as myself at any given time.

Best Regards,

STeven Garsson

 

[Les Robertson]

Ah the seasoned Nidan knows!

 

[giant1]

HI Giant



Those who look at knives with at least an inkling of what goes on past their purchase....may complain. However, they knew that their knife might not hold it's value.

As I have stated before, I don't care what criteria you use to put together "Your Collection".

Just remember you don't get to whine about it when you try to sell or trade the knife.

As for picking something else as an investment.

You get to belong to another club...the I don't really understand custom knives as investments.

In writing by an attorney I will guarantee you a 10% return on your investment in custom knives. Now you choose the amount you would like to give me and we will go from there.

Now before you jump and say on $1,000 that is only $100. Fine, give me $100,000 and you will make $10,000.

Oh, before some of you roll yours eyes again....name me one other investment that will guarantee you in writing a 10% return on your money.

I will put my money where my mouth is...how about the rest of you???[/quote]



There you go again telling people what they can and cannot do!! If you chose your words a bit better you would have less people off side.

Secondly, Putting out a challenge that you know will not be taken up by anyone is pretty lame. Why should anyone give you $100K to invest in knives??

You might well have a long history in knives and the industry in general but shoving it down peoples throats won't get you anywhere.

 

[Trent Rock]

No one should be happy that prices are falling.


Three Positive affects that are due to the economy:

1) Reducing/removing over inflated premiums for most knives.

No one should be happy but it is a positive effect??

I assume for #1 you mean that knife prices were somewhat overinflated and not in align with TRUE "market prices"
And that the current economy has caused a "market correction" back down to equilibrium custom knife prices?

I am happy custom knife prices are going down
I think most custom knife CONSUMERS are
Aren't consumers part of the market too??

Regarding "homework"(overvalued or undervalued)for buying custom a knife==>
1)Past EBAY sales
2)Go to makers website (if he has one) and see what his price ranges are
3)Go to another website that seels or auctions off knives and look at past sales
4)Visit knife forums and see if any have sold in the for sale threads
5)Go to knife show and see what the price range is for a particular maker
6)Buy a knife magazine and see if he (the target maker) has an ad or article that mentions prices

What else can I as Joe Schmoe custom knife consumer do for homework?
Is there some secret database with past prices that I can't access?

I think that especially in today's internet/instant information age it is hard to try and "outhomework" the guy bidding against you for that custom knife on EBAY

Popular books and articles promoting various forms of stock-picking, such as the books by popular CNBC commentator Jim Cramer and former Fidelity Investments fund manager Peter Lynch, have continued to press the more appealing notion that investors can "beat the market."

http://en.wikipedia.org/wiki/Efficient_markets
http://en.wikipedia.org/wiki/Transparency_(market)

Will there be a video, audio or transcript available of the custom knife value appreciation seminar at Blade?

 

[peterinct]

HI Giant

In writing by an attorney I will guarantee you a 10% return on your investment in custom knives. Now you choose the amount you would like to give me and we will go from there.

Now before you jump and say on $1,000 that is only $100. Fine, give me $100,000 and you will make $10,000.

Oh, before some of you roll yours eyes again....name me one other investment that will guarantee you in writing a 10% return on your money.

I will put my money where my mouth is...how about the rest of you???

I'm willing to invest $10,000 for a return of $11,000. Prior to the exchange of funds, I will need that "writing" by an attorney in the form of a contract clearly stating the duration of the investment, as well as a guarantee against any deviation of the $11,000 return. I assume 12 months or less.

If possible, send a copy of the contract so that I can have it reviewed and I will bring a check to Blade.

Sounds good to me.

Peter

 

[brownshoe]

Les your investment program is not readily seen on your site, so I couldn't read the full terms. However in the past you've said the 10% is contingent upon the knife remaining in the same condition as bought. Since you buy your knives at a price less than the maker's list price and then sell them at or a little more than the maker's price, it is pretty easy for you to buy back a knife at 110%, turn and sell it and still make a profit. However, if three investors with 100K in knives want to cash in, say next month, do you have the cash flow to handle a 300K payout in one month? How about 10 investors and 1mil payout in a year?

 

[David Schott]

I wonder how many BWIL guys need to buy a maker's work before the "investment" guys take notice of the increased demand and secondary market prices increasing and begin "investing" in that makers' work. I still see a critical link between collectors' likes and dislikes and investors choices. It seems to me that investors would not know what to buy without BWIL guys leading the way. A good investor will have his finger on the pulse of trends and what is selling now or historically will sell even if its not "in demand" right now. There are obviously far fewer investors in custom knives than simple collectors, so it seems logical that the investors are, for the most part, just making purchases that reflect/compliment the larger set of collectors' demands.

I look at investors like large record companies. You have thousands of small bands trying to make it big. You have fans who don't care how much % income the band might generate but just listen to the music and "buy what they like." When enough fans begin following a band, the record companies begin to take notice and make a decision to "invest" in those bands to turn a profit. If fans change opinion, the record companies drop the dead weight and move on. There are certainly cases where the record company "creates" a band without pre-existing fans, but for the most part its the non-investment geared fans who are driving the investors' choices. The investors certainly consider themselves experts, and they are, but their expertise is wholly dependant on the "fans" as without those fans they have no pulse to measure.

 

[Keith Montgomery]

This thread seems to be taking a very confrontational direction.

I would love to learn more about what makes for a good investment knife. Information like that is very educational. One thing that is of no value is bickering about whether Les knows as much as he says he does.

 

[Les Robertson]

Hi Giant:

There you go again telling people what they can and cannot do!! If you chose your words a bit better you would have less people off side.

Secondly, Putting out a challenge that you know will not be taken up by anyone is pretty lame. Why should anyone give you $100K to invest in knives??

You might well have a long history in knives and the industry in general but shoving it down peoples throats won't get you anywhere.

Im not telling people what they can and cannot do. It's your money, you spend it how you like.

I am not putting out a challenge. I am offering something that no one else in the custom knife world does. No One! It is a mere business transaction. Im surprised you don't see that.

I wasn't asking for 100K (don't you read what I write)? I was writing that many people in the past have complained that only a $100 return (on $1,000) is not a enough. So I wrote you could give up to $100K. The amount you invest is your choice.

Giant, do you or your financial advisor have any investment that guarantee's a 10% Return On Investment? I suspect not, but please feel free to share if you do.

Giant if you don't have such an investment; to criticize me because I do...is what is really lame.

As for the whole "shoving down people's throats"...like you I speak my mind. As well everyone reading any of my posts knows who I am.

Because you and everyone else who reads this knows my name (unlike you). I stand behind everything I write and say. Am I wrong, yes on occasion. But I do a lot of homework to make sure it doesn't happen twice.

 

[Les Robertson]

Hi Trent,

I assume for #1 you mean that knife prices were somewhat overinflated and not in align with TRUE "market prices"
And that the current economy has caused a "market correction" back down to equilibrium custom knife prices?

Exactly right. Over inflation of aftermarket prices eventually hurts the collector. Much like musical chairs...except in this case you don't want to be the last one in the chair. This means you have paid the highest price. You now have to wait for more people to join the game. More times than not, there is no one else to "join the game."

On one hand Im sure no on held a gun to the persons head to buy the knife. However, we lose a lot of collectors this way. They bought into the hype and failed to do their homework.

What else can I as Joe Schmoe custom knife consumer do for homework? Is there some secret database with past prices that I can't access?

There is no secret data base...you have to do the homework and find out the pricing info. First place to start...call the maker. Generally they can tell you when a particular knife was made and the price.

More importantly if you learn how to determine a makers position in a particular market. The majority of the time you will know the right price. Very few makers understand their position in a market. Collectors are starting to figure this out.

When I first got into custom knives I bought what I liked with no cares. I stopped doing that when I went to sell one of my knives to fund another knife. Not satisfied with the money I was getting for my knives. I started doing base level "homework". Over many years this has been refined.

Will there be a video, audio or transcript available of the custom knife value appreciation seminar at Blade?

Sorry no, but perhaps you send a request to Steve Shackleford to have a video made.

Actually, the seminar generally gets into a Q&A format.

If you are really interested. I did a three part Article in Blade that you can read. Also my "Custom Knife Buying Guide" is very helpful...so I am told by hundreds of people who have bought it. As Knife Word said in it's review:

"This book is the best $10 you will ever spend in custom knives."

I had planned on doing another book 5 years ago regarding investing in custom knives. I took so much heat in this very forum that custom knives could not be investments. I decided against it. Perhaps it's time to relook that project.

 

[Kevin Jones]

IMO, the issue here is some are trying to place every collector either into a "I buy what I like" or (more like vs.) "I buy for an investment" buckets.

In fact, I can't name anyone who buys custom knives for no other reason than an investment.

 

[Les Robertson]

Hi Peter,

Thank you for your confidence in me. I don't have a contract to review...only one person has ever taken me up on this before. He was a client who gave me money to buy and resell investment knives for him. He made 18% ROI in 10 months. After that he then wanted to invest in my business. I appreciated it, but I had to decline. Wasn't really looking for a "partner".

There is probably some legal document on a legal web site. After all this is pretty straight forward. You give me X amount of dollars and 12 months later you receive your initial investment and an additional 10%.

In the past when people asked me about this, I told them they could have their attorney write up the contract. That way everything was in their favor. Their attorney, their contract...and all the risk is mine.

 

[Les Robertson]

Hi Kevin,

IMO, the issue here is some are trying to place every collector either into a "I buy what I like" or (more like vs.) "I buy for an investment" buckets.

The issue with me is those who are in the BWIL club who when they decide to sell a knife want to blame someone else for price the knife brings in the after market.

As I have stated numerous times, buy what you like. Just understand that your lack of homework does not create a need for me to buy your knife or take your knife in trade.

Perhaps I should put an * buy all my comments.

 

[Les Robertson]

Hi Brownshoe

However in the past you've said the 10% is contingent upon the knife remaining in the same condition as bought. Since you buy your knives at a price less than the maker's list price and then sell them at or a little more than the maker's price, it is pretty easy for you to buy back a knife at 110%, turn and sell it and still make a profit. However, if three investors with 100K in knives want to cash in, say next month, do you have the cash flow to handle a 300K payout in one month? How about 10 investors and 1mil payout in a year?

1) the investment program is not on my web site. I have been offering it for 15 years and as of right now PeterinCT is the first person to take this offer (guaranteed 10% ROI) seriously.

2) The investor does not get the knives...they get a check after 12 months.

3) $100K... Hell I couldn't get someone to invest $1,000. No one is going to invest $100K...however if they did I would take the money and get them their money and a 10% ROI in 12 months.

4) I like your vision...10 people investing $100K giving me a million in investment capital.

5) 3 people gave me $100k, they would not receive their money in 1 month...it would be 12 months.

 

[Les Robertson]

Hi David:

I still see a critical link between collectors' likes and dislikes and investors choices. It seems to me that investors would not know what to buy without BWIL guys leading the way.

While on occasion I have had a collector make me aware of a maker I didn't know about. In most occasions I find the maker(s) long before collectors have heard about them.

I still see a critical link between collectors' likes and dislikes and investors choices. It seems to me that investors would not know what to buy without BWIL guys leading the way. A good investor will have his finger on the pulse of trends and what is selling now or historically will sell even if its not "in demand" right now.

I agree 100% with that. Note there are very few pure investors in custom knives. Most are Collvestors.

I look at investors like large record companies.

I look at investors as those who buy a particular item with the express purpose of receiving a return on their investment.

Regarding investing in custom knives, there are long and short term investments. Short term will eliminate many of your concerns regarding the record company.

 

[Les Robertson]

Hi Keith,

I would love to learn more about what makes for a good investment knife. Information like that is very educational. One thing that is of no value is bickering about whether Les knows as much as he says he does.

Thank you.

Reading your post made me think of the thousands of knife makers over the years who have sought my opinion on their knives. More times than not the "price" was the question.

The makers who initially annoyed me were the ones who sought me out (SOUGHT ME OUT) to ask me what their knife should sell for. Upon telling them, they shook their head (paraphrasing here)..."What do you know?". Finally one time I responded "obviously more than you or you would not have sought me out."

So it goes with collectors as well. Many times what they and the makers are looking for is for me to agree with their choice/price. Thereby validating what they did/are doing.

Validation is something we all seek out. You see it here every day. Makers/Collectors post pictures of their knives. Even the ones that are horrible somebody throws up a "Nice Knife", etc.

I used to do that with knife makers. Until one time the maker asked me "How many did you want." Now this was not a knife I wanted. At that point I had to apologize to the maker for basically treating him like a child. Saying what I thought he wanted to hear.

Rightfully so he was irritated. He came to me looking for a real critique of his work and I blew him off. I apologized and gave him a critique.

I have never done that again.

Because I am known for giving a very complete and honest critique. These days I am only approached by those who can take it.

I have found what this has done for my business is, I am now only approached by makers who feel their work is good....and want to make it better.

Case in Point Stephan Fowler. He asked me for a critique, I gave it to him. He thanked me. We will be getting together at the Blade Show to discuss the first knife I will be buying from him.

 

[David Schott]

Thanks!

I find this stuff really cool to discuss and I'd be reading this with full attention if I was a collector who wanted to be putting large sums of money into custom knives and wanted a "Fallback plan."

 

[marcangel]

I like finely crafted gentleman's folders made by "classic maker's" who are noted for their fit and finish. Nearly all of my knives are inlaid with premium natural materials such as mother of pearl, ivory and semiprecious stones. I often have them engraved by reputable craftspeople who are well known in the knife circle, and keep my collection in pristine condition. I try to buy my knives directly from makers or on the secondary market from individuals, provided the knife is in excellent/near perfect condition. If not, I persue discount bargaining, only if I know I can have the knife returned to flawless condition by the maker or engraver. If I buy a knife on the internet, and in person, it's, "not what I like", back it goes.

I buy what I like.

It seem to work for me.

 

[martinr]

Regarding the guaranteed 10% return on investment, is it legal to offer a guarantee like that? If it was that easy Les your mailbox would be overflowing with checks by now. Another thing, you don't want to be the Bernie Madoff of the knife world.

 

[peterinct]

Les,
I am serious in my desire to invest. To be PERFECTLY clear of my intent:

This is my no risk emergency fund that banks are currently offering less than 3% annual return in a guaranteed CD or Treasury note.

I do not have a personal attorney that can create a contract by my request to satisfy my need, and I suspect if I were to hire one, the associated fee would take a large amount of my anticipated return.

I prefer NOT to take posession of any knives, only the $11,000 return.

If you are sincere, I could probably create the paperwork and as long as it is signed by you and a witness, that should suffice.

Essentially, it only needs to specify that I will entrust you with $10,000 to be invested by you, and you will provide $11,000 in return at the end of 12 months or sooner.

I have no desire to be involved in confrontational or differences of opinion discussions, but 10% GUARANTEED return is a VERY attractive investment.

Peter