Crisis Investing=Custom Knives??

Trent Rock

Trent Rock

Joined
Jun 29, 2007
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So, I'm reading this book called Crisis Investing by Doug Casey
It was a N.Y. Times best seller in 1983
http://www.amazon.com/Crisis-Investing-Opportunities-Profits-Depression/dp/0936906006

At the end of a small section on collectibles he says that there are TWO products that he sees as GOOD investments (for the upcoming crisis he predicts)===>
One is Roman and Greek coins
The other is CUSTOM KNIVES:eek::thumbup:
He said he had been collecting custom knives for years

I was just wondering if any of you had ever heard of Doug Casey in the custom knife realm?
I was gonna send him an email asking him if his custom knives as collectibles in the coming crisis lived up to his expectations
But, he is all corporate now
A little guy like me can't email the big wigs with a simple question:mad:
http://www.caseyresearch.com/
 
Trent Rock said:
So, I'm reading this book called Crisis Investing by Doug Casey
It was a N.Y. Times best seller in 1983
http://www.amazon.com/Crisis-Investing-Opportunities-Profits-Depression/dp/0936906006

At the end of a small section on collectibles he says that there are TWO products that he sees as GOOD investments (for the upcoming crisis he predicts)===>
One is Roman and Greek coins
The other is CUSTOM KNIVES:eek::thumbup:
He said he had been collecting custom knives for years

I was just wondering if any of you had ever heard of Doug Casey in the custom knife realm?
I was gonna send him an email asking him if his custom knives as collectibles in the coming crisis lived up to his expectations
But, he is all corporate now
A little guy like me can't email the big wigs with a simple question:mad:
http://www.caseyresearch.com/
Click to expand...

That's a surprise, but surly a welcomed one.:thumbup:
That was 26 years ago. It would be interestring to see how his custom knife investment has performed?
 
Trent Rock said:
.......At the end of a small section on collectibles he says that there are
TWO products that he sees as GOOD investments (for the upcoming crisis he predicts)===>
One is Roman and Greek coins
The other is CUSTOM KNIVES:eek::thumbup:
He said he had been collecting custom knives for years........
Click to expand...

That really is an interesting statement! It for sure is a true fact
for recent years.... Quoting it can also be used to fill a short
paragraph in the preface to a book on modern custom knives... :)

All the best,
David Darom (ddd)
 
I remember a couple of posts by Bruce Voyles, comparing the momentum of custom knife collecting with other collectibles - with his noting that collecting custom knives has really only been happening for around 45 years.

That leaves a HUGE amount of room for future growth potential. I mean, it sure as hell ain't gonna go away.

EDIT: And Trent, very cool that you found/read/posted this piece!
 
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I subscribe to a couple casey research publications for about 4 years now. I bet if you email them they will forward the email to Doug. He is not too shy to come out and say if he was right or wrong on a subject. Let me know if you dont hear back, I will try to ask Doug the question for you.
 
Common Trend, you found it now go after it.:thumbup:

It would be wildly interesting to know how he did with his investments in the long run. I know what I did in 6 years but a 30 year stretch that would be something totally different:cool:

Marcel
 
I've always wondered if it is better to invest in many production knives or few custom knives? Especially in this economy. Would it be easier to sell 20/ $100 knives or 1/ custom $2,000 knife?
 
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I don't think the trend line then is the same now. Then, there were a few makers who have now turned into HUGE hits. Now, there are many more makers and you never know if any of them will turn into a Loveless down the road.

Sort of like the early baseball cards vs the cards of today. The whole market has shifted.
 
ohen cepel said:
I don't think the trend line then is the same now. Then, there were a few makers who have now turned into HUGE hits. Now, there are many more makers and you never know if any of them will turn into a Loveless down the road.

Sort of like the early baseball cards vs the cards of today. The whole market has shifted.
Click to expand...

I don't agree with the perception that a collector has to find the next Bob Loveless to be successful in investing in custom knives. There are quite a few makers out there producing knives today where one can consistently average a nice return on investment by collecting such.

nikoknife48 said:
I've always wondered if it is better to invest in many production knives or few custom knives? Especially in this economy. Would it be easier to sell 20/ $100 knives or 1/ custom $2,000 knife?
Click to expand...
Personally, I have found it much easier to sell knives in the $2000+ range than in the $500 and below range. I have had a couple very nice pieces priced below $500 on my site for the longest time without selling, however my higher end knives are selling very well. Even too well in some cases.
 
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Kevin thanks for clarifying that for me. Fortunately I have a bit of both so I guess being diversified is I hope a good thing.
 
I think that if you invested say $10,000 in the top 20 makers 30 years ago you have lost your shirt.

I think that if you invest $50,000 now in the top 20 makers for the next 30 years you will loose your shirt.

I think that if you are a very savvy knife collector and are very plugged into the custom knife world, if you work diligently at buying low and selling high, if you are disciplined enough to sell even the pieces you would normally wish to keep when they are hugely popular, then you can do OK in custom knives. Personally I wouldn't bet my ability to pay for my son's college on it.

I'd be interested in knowing how his 2 recommendations did. I suspect not too well in constant dollars.
 
I've always wondered if it is better to invest in many production knives or few custom knives? Especially in this economy. Would it be easier to sell 20/ $100 knives or 1/ custom $2,000 knife?
Click to expand...
I would think the general rule in all investing for "collectables" is get the best, which would usually be the most expensve. Check the Loveless's, Moran's, Walker's, etc.
My brother makes a living selling antique radio's and lately he's been doing better than ever. With all collections you hav to do your homework as Les is fond of saying.
 
Most of the use of "collectibles" in your "portfolio" has to do with collectibles being a hedge against inflation
I let you guys do your own research on that topic!:eek::thumbup:
Apparently the evidence/correlation of collectibles as hedges against inflation aren't a solid as they once thought
The theory is that as inflation(prices) rises==>
So do collectibles

Most of the studies are about ART work
Does the price of a Picasso painting rise with (positively correlated) inflation?
But, one could apply those same theories to custom knives, baseball cards, Pez dispensers, or comic books

In Caseys book, his was counting on inflation to rise drastically during the "crisis"

I also think that custom knives kind of play to the whole economic armegeddon fears
Custom knives are technically a TOOL
So after the economic crap hit's the fan
Joe Armegedddon will whip out his Moran knife and start making kindling for his fireplace
There is a UTILITY factor with knives
Although it seems hard to believe anyone would use a 10K Wareinski knife for every day tasks

That is what makes custom knives kinda tricky/unique in my economic way of thinking
Why are custom KNIVES the only TOOL that is sometimes treated as "art"?
Why don't people collect gold plated and diamond studded power drills?
Or platinum plated, antelope handled, meteorite embedded hammers?
Does a 10K Fuegen knife made of cheap 440 steel worth less, in terms of utility, than a Fuegen made of D2 tool steel?
Why would the type of steel be a factor in a mostly "art" type knife?
Does the D2 steel knife command a higher price because the buyer thinks that SOMEDAY, maybe, when it all goes down
It will be useful to have D2 steel?


That is the biggest question I have with the economics of collecting custom knives
I'm still kinda baffled by it
I guess if I could poll you guys the poll would go something like this:
1)For the MOST expensive knife in your collection where would you rate it(from 1 to 10) in terms of UTILITY?
1-Purely a Tool
5-Part Tool/Part Art
10-Purley Art
2)For the LEAST expensive knife in your collection where would you rate it (from 1 to 10) in terms of UTILITY?
1-Purely a Tool
5-Part tool/Part Art
10-Purley Art
or something like that.......................

The value of art
Or custom knives
That stuff has, and still does, baffle economists
A lot of factors known and unknown

I used to belong the intrinsic value school
An intrinsic theory of value is any theory of value in economics which holds that the value of an object, good or service, is intrinsic or contained in the item itself. Most such theories look to the process of producing an item, and the costs involved in that process, as a measure of the item's intrinsic value
Click to expand...
After discovering Mises.org
I belong to the subjective value school now
(I kinda believed this all along..I just never knew there was a term for it..)
The subjective theory of value (or theory of subjective value) is an economic theory of value that holds that to possess value an object must be both useful and scarce,[citation needed] with the extent of that value dependent upon the ability of an object to satisfy the wants of any given individual. "Value" here is distinct from exchange value or price. The theory recognizes that one thing may be more useful in satisfying the wants of one person than another, or of no use to one person and of use to another
Click to expand...
There it is again!!
LOL
Useful....aka utility:confused:
 
If you buy during a collectible fad, you'll be screwed.
If you don't sell during the height of the fad, you'll be screwed.
This applies to ALL collectibles as far as their long term investment value.
And NEVER expect a long term investment to provide a return greater than the aggregated inflation rate....at BEST.

You can take that to the bank...but not investment bank. :D
 
i do not believe custom knives are good as investments. a knowledgeable and experienced collector will realize a profit on occasion, if the buying and selling are timed correctly. but the majority of knives purchased will more likely result in some loss, so the entire knife portfolio is unlikely to show a profit.
the reason for acquiring custom knives should be that you enjoy owning them.
they are an investment only to the degree that some of the money spent can be recouped.
for sure there is the rare individual who is the exception to this, but 99% of us will never get all of our 'investment' money back.
it's not like real estate.
roland
 
rprocter said:
i do not believe custom knives are good as investments. a knowledgeable and experienced collector will realize a profit on occasion, if the buying and selling are timed correctly. but the majority of knives purchased will more likely result in some loss, so the entire knife portfolio is unlikely to show a profit.
the reason for acquiring custom knives should be that you enjoy owning them.
they are an investment only to the degree that some of the money spent can be recouped.
for sure there is the rare individual who is the exception to this, but 99% of us will never get all of our 'investment' money back.
it's not like real estate.
roland
Click to expand...

Sorry Roland, however I respectfully disagree with about everything you state above.

I know quite a few custom knife collectors who maintain a respectfully positive return on investment over time and have done so while thoroughly enjoying the experience and their knives.

Investing in custom knives is no different then investing in anything else. Success is determined by one's experience, effort and education on the investment instrument. The 3 "E"s of successful investing, I like to call it.

Certainly not saying that custom knives are the best investment out there, however it's an enjoyable one which can yield a decent return.

In addition, the reason for acquiring custom knives 'should be' that individual's enjoyment whether it be owning the knives, making money or a combination of both.
 
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Go back to 1983 and look at Blade Magazine (KI and Tactical were not around then). Look at the top makers we were writing about then, take into consideration their knives--look close at the photos and notice how crude some of them were. Check some old catalogs and see what their knives were selling for them.

Use your own imagination and write down the makers you would have bought then. Loveless? Moran? Both were not taking orders then, and everything had to be bought on the aftermarket. Bear in mind in those days too that the quoted rule of thumb for Damascus was $1000 an inch. If you would have bought a Loveless then, why not now? Same with Morans? And the reasons are the same--they were priced at the top of the market then. Few investors jumped on those and D. E. Henry knives exclusively.

Ron Lake was a top name, but Ken Onion wasn't in the game that anyone knew. Michael Walker and Ernest Emerson may have been around, but few knew who they were--and their knives do not look like the knives the make today that are commanding big prices.

If you had bought what was hot you would have a bunch of ivory micarta handled boot knives by few makers that are even active today.

It is all scary from an investment standpoint--especially if one compares the money that would have been made had that cash been put into a safe CD somewhere and let the interest compound over the years.

Those of us around in those days quoted the Casey book endlessly. One of the things that is troubling today is those who had not heard of it.

Old copies of the knife magazines are easily obtainable at knife shows. There are things within those pages that are still not available on the internet, and the fact that anyone might not have heard of the Casey book is evidence of that.
 
Bruce is soooo right.

It is all about research and using your brain to figure out where to put your money if you are doing this for financial gain

If you had bought as many Loveless' as you could back when I started making knives..........You could retire on that portfolio alone.........

It is the same today......But I would guess a lot more complicated.
 
Trent Rock said:
Does a 10K Fuegen knife made of cheap 440 steel worth less, in terms of utility, than a Fuegen made of D2 tool steel?
Why would the type of steel be a factor in a mostly "art" type knife?
Does the D2 steel knife command a higher price because the buyer thinks that SOMEDAY, maybe, when it all goes down
It will be useful to have D2 steel?
Click to expand...

While I see your point overall, specifically if you find EITHER a 440 Fuegen or a D2 Fuegen....buy it, because it is likely the only one.

Larry only works in carbon steels. The type of steel would not really be a factor in a mostly "art" type knife EXCEPT if it was an exceptional knife, and used an atypical steel, might help sell the knife, all other things being equal.

It would bring neither more money or less money than another knife of "typical" steel.

I purchase knives that I like, first and foremost, but usually keep re-sellability in the back of my mind. Took a beating in the beginning, right around the period Bruce Voyles references...but stayed with it. Making a decent profit when a knife is sold that is no longer enjoyed is an added bonus, satisfying both personal and financial interests.

If one had purchased good Ron Gaston knives from that time period, with desireable handle materials such as ironwood or ivory, the knives averaged $300-$400 per knife, and they sell for double that now, fighters being vastly more sought after than hunters(which is often the case)....because the piece has to be considered first, and then the maker.

Others will have different results....some will make tons of money, and some(more) will frequently lose piles of money.....I am ahead by a comfortable margain, but if I had to share how I do it, probably wouldn't be teachable.

Best Regards,

STeven Garsson
 
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