Crisis Investing=Custom Knives??

Kevin, perhaps you are one of the exceptions i mention, but i believe what i say is true for the majority of people who buy custom knives thinking they are 'investments'.
i read Bruce Voyles post as saying the same in a more sophisticated manner.
the hazard lies in predicting the future. will interest in knives increase or decrease over the next 10-20 years ? Fighters are 'popular' now. will they be in 10-20 years ? etc.
in general price is determined by supply and demand. there are many more excellent knifemakers now than there were 30 years ago and in general their level of workmanship is quite a bit more refined.
i interpret this as, what has happened with knife values over the past 30 years may well not be applicable in predicting the next 30 years. will there be an increasing community of knife collectors in the future ? the only realistic answer is 'maybe'. you don't need to be a knife expert to see the pitfalls.
by comparison, real estate is a valid investment because it is assured that people will still need a place to live in the future (barring some event that kills millions of people).
respectfully, roland
 
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Real estate may indeed be a "valid" investment, but it tends to be a crappy one over time.
Then again, that's a topic for another place. ;)
 
Roland, it seems like the emphasis here is being placed on picking the "right maker" today, buying and holding his knives for 20-30 years then hoping they're then worth 10-15 times what you paid for them.
That's NOT a custom knife investment strategy that I subscribe to. The collectors I know who maintain a positive ROI from their collections buy the 'right knives' from the 'right makers' enjoy them for 2-5 years then resell them at a profit. Often a handsome profit.

What is the 'right knife'?
Usually, a time proven classic design that stands out among the others (for a number of reasons) today and will most likely do so in 2-5 years.

Who is the 'right maker'?
Usually, a maker who not only makes well designed and well executed knives, but relentlessly promotes himself and his knives and knows how to run his business thus achieving a favorable and sustainable position in the market.

You can find knives that meet this criteria whether you collect forged, stockremoval, folders or whatever.
 
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Wont the "right" knife's prime last much longer then that time period? If were talking about a true investment piece then I think the test of time i extremely important.
 
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jonathan brand said:
Wont the "right" knife's prime last much longer then that time period?
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It should.
IMO, from an investment prospective, you are not looking for the knife or the maker (for that matter) that's "HOT" today, but what/whose appreciated today and will most likely still be appreciated (perhaps even more) in 2-5 years.

Your Hancock hunters are very good examples. But you don't have to look just to the most well known makers as these knives can be found from less established makers as well. There are less established makers who are making fine knives and doing what it takes to make a market for themselves and their knives.
 
Kevin, my emphasis is not on the "right maker" or the "right knife", but on how strong or how weak, the collector market might be in the future, even as close as 5 years.
I see our world and lifestyles as changing radically beginning now. concerns regarding energy sources, water and food will dominate, leaving ever fewer people able to involve themselves in discrectionary activities.
my knives are for fun. my investments are in necessities.
roland
 
This discussion reminds me of those that can NEVER end as "opinions vary" and what works for one person doesn't necessarily work for another, or the masses.

In my opinion, ANY collectible is ONLY worth what someone is willing to pay for it. Having the right connections can mean EVERYTHING.

I also wonder what the future holds in store for various collectibles, such as vintage tools, artwork, precious stones, etc. As Roland pointed out, those are NOT necessities, and those that buy them do so for reasons OTHER than the need to sustain life.

When I think about the younger generations and what their interests are, it seems like electronics and technology are at the forefront.

Value of a knife can be VERY difficult to ascertain. Show any person, that is NOT a knife enthusiast, a collectible knife, and ask what they would value it at?

If you have a coin or stamp and decide "I need to sell this today". You can go to any number of reputable dealers, and there is a definite market value that you can expect to receive for it. Not so with knives!

In another realm of investments, some years ago "Blue Book Publications" published "The Blue Book of Pool Cues". That led to many owners of collectible cues, putting values on them, based on what many thought were optimistic (to say the least ) values in the book. When someone would say "The book has this listed at blah, blah, blah", I would reply, "does the book tell you where to go to receive that price"?

I think investments need to be carefully made assessing risk factors the best one can.

Peter
 
Peter, I totally agree that opinions vary and stated such in my previous post.

Kevin Jones said:
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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My issue is that some who have no desire to and/or do not put forth the effort to successfully invest in custom knives, condemn those who do. Or believe those who do are missing something or collections suffer because of the investment aspect.
We see examples of this constantly on blade forums every time the "I" word (a big joke here) is brought up.

peterinct said:
If you have a coin or stamp and decide "I need to sell this today". You can go to any number of reputable dealers, and there is a definite market value that you can expect to receive for it. Not so with knives!
Peter
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Again, I agree Peter and a reason for this is that so many custom knife investment naysayers have collectors convinced that we are suppose to lose money upon selling custom knives. And for this reason I doubt that custom knives will ever be recognized for their investment potential like coins, stamps or other such collectibles.

My point is that if one desires to gain financially from collecting custom knives and puts forth the time and effort to do so, they can. That's a fact.
 
While it is possible to make money on some of the knives we've bought, I think there are two major factors to consider. First, it's usually easier to buy than to sell. Although the internet and forums like this one have made it easier, it's still sometimes difficult to find the right buyer. Working through a purveyor is expensive and cuts the chance for a profit. Second, knives require regular maintenance, sometimes a lot of it. So, while it's possible to turn a profit occasionally, my experience has been that knives are best bought because you enjoy them. ;)
 
posted by peterinct:
This discussion reminds me of those that can NEVER end as "opinions vary" and what works for one person doesn't necessarily work for another, or the masses.

In my opinion, ANY collectible is ONLY worth what someone is willing to pay for it. Having the right connections can mean EVERYTHING.

I also wonder what the future holds in store for various collectibles, such as vintage tools, artwork, precious stones, etc. As Roland pointed out, those are NOT necessities, and those that buy them do so for reasons OTHER than the need to sustain life.

When I think about the younger generations and what their interests are, it seems like electronics and technology are at the forefront.

Value of a knife can be VERY difficult to ascertain. Show any person, that is NOT a knife enthusiast, a collectible knife, and ask what they would value it at?

If you have a coin or stamp and decide "I need to sell this today". You can go to any number of reputable dealers, and there is a definite market value that you can expect to receive for it. Not so with knives!

In another realm of investments, some years ago "Blue Book Publications" published "The Blue Book of Pool Cues". That led to many owners of collectible cues, putting values on them, based on what many thought were optimistic (to say the least ) values in the book. When someone would say "The book has this listed at blah, blah, blah", I would reply, "does the book tell you where to go to receive that price"?

I think investments need to be carefully made assessing risk factors the best one can.

Peter
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Peter,

I agree 100% with what you have said. Money can be made investing in custom knives, but it takes both knowledge, connections and timing to know when it is the best time to buy or sell a particular knife.

The custom knives market is very limited. In my opinion the value of the majority of knife makers will not appreciate much in the future.

This is one reason for those of us who collect custom knives to collect knives that we like and that bring us pleasure in owning.

Jim Treacy
 
yitz said:
While it is possible to make money on some of the knives we've bought, I think there are two major factors to consider. First, it's usually easier to buy than to sell. Although the internet and forums like this one have made it easier, it's still sometimes difficult to find the right buyer. Working through a purveyor is expensive and cuts the chance for a profit. Second, knives require regular maintenance, sometimes a lot of it. So, while it's possible to turn a profit occasionally, my experience has been that knives are best bought because you enjoy them. ;)
Click to expand...

I agree and well said.
Contacts play a large part.
How do you make contacts? By exerting time and effort.
 
jjtjr said:
posted by peterinct:

This is one reason for those of us who collect custom knives to collect knives that we like and that bring us pleasure in owning.

Jim Treacy
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Agreed Jim. That is EXACTLY what I do. I love knives (amongst other things) and my philosophy is to not spend ANY money on collectibles that would affect my quality of life if it were to be lost.

Each person has a unique perspective and should simply do what is best for them:D

Peter
 
I have never believed that "something is only worth what someone is willing to pay" as people pay more and less than items are "worth" everyday from grocery stores to car dealerships and everywhere in between.

Worth, IMO is the price the general market of an item will support (pay) over a period of time, rather than what a single individual is willing to pay for a particular item at a particular time.

An example as it relates to custom knives:

The familiar Fisk Sendero hunting knife (non-NLT and/or frame handle) with an premium amber stag or ivory handle, engraved guard/pins and damascus blade in mint condition is "worth" $1900-$2400 depending on the particular knife.
This "worth" is based on my knowledge of the market and averaging primary and secondary market sales for this model over a period of time.

Now having said this, if I lost my job and under duress had to sell one of my Senderos which falls into the above category for say $1400 to John Doe, does this mean that all similar Senderos are now "worth" $1400? Of course not, it just means that John Doe got a deal as a result of circumstance.

The same if I found a Sendero that I just had to have for some reason and paid $2800 for it. Does it mean all are now "worth" $2800? No, just that I was willing to pay more that it was "worth" for any number of reasons and even though some may think I was crazy.
 
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There are many fungible considerations when considering investments in collectibles regardless of product category or description.

"specialists" will always have an edge and can profit on the spread, consistently buying lower and selling higher; casual players are at an institutional disadvantage because of this lack of knowledge and access.

"critical mass" of a market is important, both in terms of sustainability and liquidity. This is true of both the general category - knives; and the niche niche categories - custom makers vs production; lenses and optics (yes, people collect nikon, Leica, Zeiss, Canon et al too); stereo equipment; watches - Rolex and Seiko and Omega? Patek and Lange and Audemars? Voutilainen/Dufour/Haldimann?; cars; wine; fishing rods and reels, whathaveyou.

Knives and guns have special considerations of regulation and potentially being banned; cars and boats and aircraft have to be registered.

Are illegal high cap magazines worth more or less than when they were completely legal? higher on the spot but shadey grey market, nothing in the completely black and white legal market. This is not an investment question but a transactions cost question.

Intrinsic value followers are not wrong; neither are market price takers. Both exist in the market and both drive the market.

Value and Worth, are not the same as price.

Nothing is "a sure thing" - not gold, not water, not real estate.

Yes, one can "make money" with knives, or guns, or watches, or wine, or...otherwise, the market for them would not exist.

But whether YOU or I can make money with it depends on the above considerations, and many others, and throw in a pinch of being in the right place at the right time knowing the right people.
 
Wow. :thumbup:
This thread is really resulting in some very good discussion for a thread that was resurrected from 5 months ago that initially had little interest or participation.
 
:D

Not sure if you were being ironic or serious, but commodities are another matter entirely, governed by different primary considerations.

Rice/wheat/gasoline/electricity/water whatever - ain't no such thing as "sure things."

:cool:

(seriously, don't know how serious this discussion is trying to be. And I don't mean to confuse "value/worth and price correlation" with the burdening complications of logistics; it is possible to discuss one without the other, though of course ultimately incomplete if considered separately.

Shipping a knife, even without regulatory considerations, is a very different matter than shipping a gallon or 10 gallons or a million gallons of water.

Or a watch, for that matter.)
 
Ok, so what has the "Brain Trust" decided???

Custom knives can be investments or not?

A question for the "Trust"...no one discussed ROI %??

When you are considering ROI, do you including shipping?

How about if you had to travel to a show to get the knife? Is that somehow "expensed" in a "below the line" accounting technique?

Are you making an adjustment for inflation each year you keep the knife?

Here is something else to ponder. In approximately 1955 Loveless starting making knives. In 1987 at the Blade Show he had 3 Big Bears (in black micarta) on his table. Price was $800 each.

In 1998 (I believe..it was the first year of Bruce Voyles SOS Show) he had an auction of a huge collection of custom knives. JW Denton bought the two Big Bears for over $10,000.00 each.

So apparently even for those considered to be the "great investments" the first 30 years didn't really show a huge ROI on his knives.

However in a mere 11 years the knives went up from $800 to $10,000.

Then between 1998 and 2008 they went up another $10,000 (+/-) to $20,000.

It seems they took off about the same time he stopped making them. What does this tell us about custom knives.

Perhaps it is not the maker...but the "Brand" that is more important.

BTW, there are some great investment grade knives $500 and under...if you are ok with 15% to 70% ROI.
 
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