Custom Knife Investment

I would suggest that the success of a knife investment program is in direct proportion to the time spent in research and preparation PRIOR to a knife purchase.

My first question to anyone who says they have not had success in knife investing is how many knife shows do you attend, how many knife magazines do you read, and how much effort do you go to in order to learn about where you are putting your money. Just as important in knowing what to buy is knowing when to sell--and having an outlet to sell.

I now have some people come to me and tell me they have left instructions with family members or in their will that in the event of their death to consign their collections to my auction service, but the vast majority of the estates I deal with are from collectors who left their families with no idea what to do with their knives.

Many times the knives in their collections also reflect that lack of preparation in their purchases as well. A couple of years ago I passed a flyer out at the Blade Show under the title, "If something should happen", with the back 1/3 a form to fill out for the collector to fill out, place with his important papers, to at least leave his family an idea of what to do with his collection. In addition to the option of contacting my auction, there was a place to suggest a dealer, and a box to check that said, "I don't care, you're on your own."

Here's self-test if you think you are a prepared, well researched collector.

PREPARATION
Does someone in my family know what is supposed to be done with my knives in the event of my death?

RESEARCH
How up to date am I on the market? How much time do I spend on knife research, conversations with those who know more about knives than I do, and observing the prices knives are actually selling for on the aftermarket?

Do I check dealer websites, auction sites, online auctions, etc. and am aware of the prices being brought of knives similar to what I have in my collection?

IMPORTANT NOTE: What a knifemaker has priced in his catalog is of little use in this research except as a point of reference, unless the knifemaker is going to take your knife and sell it for you. Try mentioning that to a knifemaker and judge that reaction sometime!

KNOWLEDGE
Do I read EVERY knife book I can get my hands on? Do I read ALL the knife magazines? Or do I really believe I can get every bit of information I will ever need to know about knives from the internet?

In my opinion if you do not have a "yes" answer to most of the questions above, I can give you a reasonably accurate prediction on how your knife investment program is going to turn out.

Les mentioned a very good article he has written for Knives Illustrated this issue. When you read about it was your reaction to pick up your subscription copy that has arrived recently and re-read it, rush to your newsstand or retail shop to buy that issue, hope someone would copy it and post it online so you could read it for free, or didn't really care what Les said either way? Again, whether your answer was the first, second, third, or fourth is, to me, a good indicator of how your investment program is going.

Several years ago I was at a knife show in the hometown of an old friend, who was now an attorney. I called this non-knife collector to meet me at the show and from there we would go to dinner. He was early, wandered around the show for a while, and over dinner I asked what he had thought of the show. He had witnessed Jim Parker buying a roll of vintage knives, several custom makers selling their knives, and what has struck him about the show was, "I saw people pulling out wads of cash and paying several thousand dollars for knives and groups of knives, on what appeared to be a decision they made in about 15 seconds." He added that he bet those same people would have spent days researching a similar purchase for an automobile or stock purchase in that same amount. Looking back on that time he was dead on it--it was an indication of the volatility of the knife market--and the instability of that market.

The market has settled down from those hectic days, are is much more stable--but a helter-skelter unprepared investor is not an asset to the knife business but instead a detriment, to the business, and to himself.
 
emotional impulse is the enemy of investment. Emotions are short term, investing is long term. Never the 'twain shall meet!
That's what I got from your post, Bruce. You put it all into perspective:thumbup:
 
To be informed from ALL available sources, to have that knowledge under your belt, will allow a collector/investor to make an educated decision, rather than a dumb guess.

The ignorant, uninformed, guessers are usually soon parted from their money.

Running on emotion, as so much of this society does, whether it be voting for a politician or buying a knife, is worse than ignorant--it is just plain stupid, in my opinion.

If you have done your homework and have the knowledge under your belt (in other words if you have spent the time BEFORE you are standing in front of a table with cash in hand considering a purchase) you may indeed make that decision in 15 seconds. It may appear quick and impulsive to a passer-by--but that passer-by doesn't know about the hours you spent reading a knife magazine while taking your daily constitutional.

One key that is a ready tip off to an educated knife collector is when you use their facilities and there is a stack of knife books and knife magazines near the throne. If there is nothing there except sport magazines, it tells you where their primary interests really lay.
 
Everyone has heard the old adage, "Buy low, sell high." This sounds pretty obvious: you have to sell for more than you paid to make a profit. But it really detracts from the most important piece of the puzzle, which is to BUY LOW.

No one knows how much, if at all, something will go up in value after purchase. If you are a diligent investor/collector, you should have some idea of what knives have potential to increase, and you should also have some idea of how to sell your knives for what they are worth when it comes to that.

But the real key is to be patient/smart when buying your collection. There are always people who have bought unwisely, and when they need money will sell for what they can get in a hurry. Don't be emotional in your purchases, and you will have a better chance to have positive emotions when you sell! As STeven says, don't pay retail.
 
Hi BM,

What STeven wrote was:

One thing I have learned is that buying anything retail with the intent to sell it at a profit is a gamble."
Click to expand...

You would be very fortunate to get many of the in demand makers work at retail...let alone below retail.

Now you may be able to pick up a knife under retail in the after market from a collector. However, that should give you pause to consider why the collector couldn't sell it for retail.

Now if you are talking factory knives...you never pay retail.
 
Les, thanks for the fast response. I was speaking generally about buying low, and yes, the majority of my collection is factory stuff. But I do have a few customs, and am learning a few things.
Buy directly from makers if possible. The ones in demand may have long wait lists, but when your name comes up, you're almost always assured of a profit, as there are always people who don't want to wait and will pay a premium for the one you just received finished. Also, buy at shows over paying the premiums via internet sites. And above all be patient. The desire to "have it now" is strong, but waiting for the right opportunity usually pays dividends.
 
In regard to purchasing investment knives:

My first priority is selecting a maker who has and will most likely continue to sustain a very positive market position.

Second, (a close second) is selecting and/or commissioning a knife that will have sustainable market appeal as opposed to the latest/greatest/hottest.

Third, obtaining the above at the best possible price. However if you have done the above well, your acquisition price is less a factor as demand will be high upon sale.

Though having said the above a very wise old business mentor of mine used to say "bought right, half sold". ;)
 
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