Custom Knives as investments?

S

SID

Joined
Jul 1, 1999
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Just curious on everyone's thoughts of what they think of custom knives as mid-range (5-10 years) investments.

There are seemingly more and more new makers on the tables, and most of which are not all that cheap. Is the market a little crowded for investments right now? Should a person just concentrate on the more familiar names, up and comers?

I usually buy customs whith styles that catch my eye, but what about as an investment? Price range also seems like a catagory that may play a factor in an investment.

Thanks for the time guys.
 
I've had bad luck with collectables as investments. First, there's no guarantee they'll appreciate in your lifetime. Second, it tends to color your selection (should I buy the knife I really like but isn't likely to appreciate or the one that I'm lukewarm on because everyone thinks it'll go up in value).

I have a friend who started collecting Starwars stuff (about 6 years ago). He had nearly everything made in the 70s and 80s, including many of the available prototypes. He started selling off his collection (lost interest) right before TPM and finished some time afterward. Overall, I think he broke even. If he made any money, it didn't offset his time. He's done that several times over with other collectables (he's a serial collector). He rarely loses money, but he rarely makes more than a couple percent over what he paid.

If you want to collect investments, buy either in-demand makers or solid up and comers. Hold them for the long-term (10-20years?). Most important though, buy what you like. Afterall, you have to look at them until you sell.

Chris
 
Knives can most certainly be bought as investments, but trying to pick up and comers who's knives will go up in value is a crap shoot. If you go with Moran, Loveless, Scagel, Warenski, Appleton and some of the other big names, you will be sure to make some money on your investment. You will have to spend a small fortune to buy one of these knives in the first place.
 
A couple of comments on collecting/investing:

Star Wars stuff: I held on to pile of Star Wars comics from 1977 when I worked in a comic shop for a summer. Paid $0.30 for them. In the last couple of months (25 years later) sold them for an average price of $33 (I am keeping the highest quality ones for later). So, a return of 1100% on "mediocre" quality comics. That money has allowed me to expand my buying of knives.

Knives: I have found that you have far greater returns from finding undervalued items rather than paying dealer prices up front. Finding undervalued customs is very difficult as they are generally owned by knowledgeable folks. With factory pieces, many valuable items are in the hands of folks that neither know nor care about potential collectability and value of their items, thus you can purchase them years laters for much less than the original MSRP let alone the accrued value.

If you can find a rising young maker, I think you can make reasonable returns in the 5-10 year range. You better get lucky though, as today's rising star may end up in jail or some such thing (think Rick Genovese).
 
Funny, I was thinking about starting a thread on this topic. Glad someone else did. As an absolute newbie to customs, with a limited budget, I am very cautious on my purchases. Can't afford the proven winners so have to look at up and comers. My focus is buying what I like first but making sure the quality is there. If it is well made and has aesthetic appeal (unless it is too trendy) I imagine they should atleast maintain the value. And if you get lucky and buy a real star....
 
Well if you want to buy really big names like that you can but i have been around a lot of those knives and you have to sell a car to get them. There is no way to be sure what will go up, just by what you like and make sure it is good quality. Get good matereals as well gold and jewels high quility damacus good handle materal and so on. More inportanly buy what you like you are the one spending the money and keeping the knife.
 
Every time you buy a knife, you have invested.

You have invested your time, your money and invested in a makers career.

Making money with knives is a fairly easy proposition. However, most people don't purchase knives that way.

The biggest mistake is not doing your homework.

The second biggest mistake is thinking that you have to spend a lot of money.

Another mistake is thinking that "quality" has anything to do with it.

Investing in anything takes time and dedication.

Those who want to buy for investment will find numerous opportunites. Most of them have nothing to do with waiting 5-20 years. Im talking 5-20 days to see a 5-100% retun on your money.

I do not recommend cashing in your 401K or IRA to do this.

Just use the normal amount of money you would spend annually on knives.

The knives are out there, you just have to know which ones!

Good Hunting.


So that is why most people buy what they like. Nothing wrong with that.
 
Collectibles (ie knives) are high risk investments. Some have made money, more have lost money. The "genius" of one era rapidly becomes the "goat" of the next as tastes evolve and economic conditions change. Remember baseball cards, beanie babies, and last Christmas' hot toy?

The market is too small, too easily manipulated, and has limited liquidity.

Buy knives because you like them and appreciate them. Do not buy them with hopes of becoming wealthy, or because others hype them (often by trying to convince you they are the reincarnation of SGT. York or that the blade will make you a ninja and safe from all harm and other such nonsense).

Buying, selling, and trading knives is a fine thing to do if you so choose. Just don't get too focused on financial gain, it may rob you of your enjoyment of the hobby.
 
Hi Dan,

Just out of curiosity what knives have you invested in?

Not trying to be a smart ass here. But it seems a lot of people (to include you) post the "negative" aspects of collectible markets.

Obviously someone has to make money with these.

My two daughters aged 7 and 10 started their own business selling beanie babies (K&K Beanies). After it was all said and done each made over $3,000 (net profit). Not bad for two little girls in a collectible market.

They are now 10 and 13. Yes, on occasion they still do sell beanie babies.

It wasn't so much the money as it was they learned how to do the reseach.

Now if two little girls can make $6,000 profit off of some beanine babies.

I suspect that there are opportunities in custom knives.

BTW, SGT York, the Ninja, fad's and trends are all markting techniques that can work in your favor as well.

While it's very difficult to imploy "market timing" as an effective stock/commodity market strategy. As you say the custom knife market is a small community and a type of market timing can be utilized to your advantage.

After all isn't "market timing" what magazines do to sell knives on the news stands. Aren't they the ones that have SGT York and the Ninja hyping the latest knife in their clients advertising?

These publications make a lot of money off of these. They then in turn fund their employee's 401K's with the profits realized from "investing" in custom knives.

Well it appears that at least someone is using custom knives as an investment.

Think oustide the box guys!
 
...or maybe I should have titled this, "To Les, but not to Les..." ;)

I'm 40; I've been 'investing' for 20 years, in knives for 2.

I've done extremely well with my financial investments, and have been an active participant throughout my investment 'history'...

I've also been very, very, 'lucky', and my success has been just that, a derivative of luck, nothing more, nothing less.

Standard financial theory aside, and the fact that my company is 'employee owned', I've been very lucky with my other 'investments', primarily firearms...

I bought that what appealed to me, and had the good sense to buy that what soon became 'most desirable'...

When I started buying knives, I applied the same logic..."What do I like?" Well, I found out that I liked Randall designs, I liked Loveless designs, and I liked Jess Horn designs.

Well, we now have a substantial RMK collection that we may 'break even' on if we ever sell, a Applegate/Fairbairn collection that may also break even, and an Al Mar collection that may do a little better...

The Loveless/Horn/Lake/and Moran knives may even do a tad bit better than the others, but that is really going to be driven by the current economic situation, the situation 'de jour' if you will...

So, for Les, whereas I once had argument with you on a personal level, those days are well behind us; I fully respect your business acumen, what you've done for your family, and your opinion...though I generally disagree with your analysis that knives can be a 'good' investment.

DE, I love ya like a brother, but my opinion still holds true here, IMNSHO ;)

I think the economy drives 'value', and with the potential for less discretionary funds available in our current 'state', and with economics, 'collectibles' value, statistics, and trend analysis aside, as a whole, knives make a particularly poor investment choice for the 'average' investor.

I know that you Dave, and Les, Rhett, Paul, Bruce, and a few others have 'beaten the odds', but on average, you guys are an anomaly. Plain and simple. Please keep that in mind.

Thanks,

Mel

p.s. "Buy for the love of the knife, not as an investment" Uncle Paul Basch, circa 2000
 
I agree with Melvins comments, would like to add one thing from a makers perspective ( mine at least cuz this has happened to me ) . Unfortunaly, in order for a fast profit to be made with knives someone has to get screwed over. Ive seen it happen many times, been in close proximity to it happening, heard the stories of it happening, and yes it has happend on two distinct occasions to me. In all these events, someone ( the seller ,adn sometimes a buyer ) was taken advantage of by a dealer, because they ( the seller ) did not have a crystal clear view of the market, this view is often clouded by the dealer whom the seller may have known and respected for some time. So when teh dealer sees the dollar signs, all the rules of friendship adn decency ( the things this community is supposed to have) vanish and they will step on anybody to get that extra penny. When I sell to a customer he is buying my time, my experience and everything else that goes into a knife. When I sell to a dealer i give a discount so the dealer can make the money he needs to to justify doing business with me. With only two exceptions, the dealers have slapped my full retail plus upto another 50% onto the price, knowing full well that at the time of the transaction it was understood that the knife would be sold at or around my retail. If they know they can make more money, and they dont tell me and adjust the price, they are doing nothing short of screwing me.

I apologize if I got off topic, but this is something that is important to me.
 
...as a 'dyed in the wool' RMK collector, I'm always 'on the hunt'...but when I first discovered your knives, I thought I'd discovered knife 'nirvana'...your knives are at the very least as well made, if not better...

But, the sand in the gears, the 'sticky wicket' if you will, is when 'someone' sells your knives at, or higher, than RMK's prices, then 'vapor lock' occurs...

Does the buyer buy your 'better' knife, or does he buy the recognized 'brand' name? This has been a real 'bitch of a decision' for me, and the only solution I've been able to come up with is, "Buy Charles Marlowe knives for the 'personal' collection, and buy RMK's for long term investment"

I hope this works for you.

Keep up the good work buddy, and thanks for the insight from your perspective. As always, you're 'spot on'

Mel
 
I'm going to throw my meager opinion in the pile here. I agree with Les that there is potential for positive investments in knives. Where I disagree is in the odds. Yes, you can make money investing in custom knives, but you have to do your homework AND you have to know which makers have potential and which makers are going to become big. Ya gotta be able to pick em. Not too many knife collectors can pick em. Les, and a few others have a knack for picking out who will become big and popular. I have(on a much smaller scale) occasionally been lucky, but am glad that I am not trying to do it for a living.

I gave up a while ago on trying to buy customs just for the possibility of them becoming highly valuable someday. More often than not, I would end up with something I really didnt like that much, just keeping it in case it became valuable. To me, that's not what I got into collecting custom knives for. Now, I buy what I like. The knife is already valuable to me. If it someday becomes valuable to a lot of other people, then that is a big plus.
 
I think Architect hit the nail on the head. There are undervalued knives out there to be had, if you're willing to put the effort into finding them. Not everyone keeps up with the market, or realizes what they own, creating a buying opportunity for you. His other point is equally true: dealers rarely (ever?) underprice their knives. Buy from them what you like and want, not what you think will appreciate. If it had real potential to rise, it would stay in inventory!

Aaron is right, too - buy his knives, they are gorgeous and beautifully crafted by a master!
 
I've been purchasing Randall knives now as a hobby for over 30 years...some years I'll pick up one...some years...several.....

I've ALWAYS made money off my Randalls...NEVER lost money.....even if I just purchased a new, bone-stock Randall...put it away and pulled it back out a couple of years later and just sold it....always got more than I paid for it...

True too of George Herron's knives....like everyone else, while I may have had success....I certainly don't view the act of collecting anything to be an investment....just a hobby....nothing more.

:D
 
I am an incurable collector. In the past, as well as the present, I have spread my disposable income around exotic cars, high-end wristwatches, sports memorabilia, rock band tour jackets, and knives. From what I can recall, I don't believe I ever purchased a single item with the thought of making a great profit on it in the future. Anything I bought, I purchased because I LIKED it. (The only item I ever made a profit on was the occasional wristwatch I sold due to lack of interest.)

Now, when I buy a knife, I use the same rationale whether it's a $140 factory or a $1,400. custom - I buy it because I LIKE it.

As I used to tell my son at the height of the baseball card collection craze ("Dad, this one is worth $58.00!!"): a "collectible" is only "worth" what another buyer is willing to pay. Otherwise that $58 card is only a 1-cent square of printed cardoard. (What are Cabbage Patch Dolls going for these days?)

My uneducated advice regarding the purchase of knives as an investment: first and foremost, buy what you like and enjoy.

Your pleasure will be your profit.
 
Concerning Appleton,Warenski and Scagel.
Over the years I have found that these three makers knives command a very high selling price,very tough to turn a profit unless yopu buy them right.The average Appleton knife currently runs $8500 directly from Appleton,on the resale market they are a tough sell.Scagels are price almost out of reach (I stay away from that market for the time being).Warenski in my opinion is one of the top makers in the world today,his stuff does ok on the secondary market.
This week I have sold three Lovelesses totalling approx. $25,000.
Moran knives still move but the older,more affordable stuff is a bit slow currently.
Always buy what you like first,worry about turning a profit later.
If buying strictly for investment as Les say's,stay with the big names,
Dave Ellis, ABS,M.S.
http://www.exquisiteknives.com
 
Hi Melvin,

I never said it was "easy" to have knives as investments.

I also do not advocate custom knives as comprising your entire investment strategy.

I will however say that you can use custom knives as part of a "balanced" portfolio.

Guys, I was not born with the "nack" to pick the right knives. The same is true for other dealers I know (some have already been mentioned).

I have found this old saying to be true:

"The harder I work...the luckier I get".

I think one of the problems with people viewing custom knives as investments. Is that they realize it will take some work. This in turn takes some of the fun out of your hobby.

You end up analyzing each purchase before you buy it. You find yourself not so much buying for the fun of it.

As for investing in the market (which only about 30% of Americans did prior to the 1990's). It's the place for long term and short term investments for most people. Gotta love compounding interest!

See Melvin you too are an out of the box thinker.

Just as I am promoting custom knives as investments. You do the same with the market.

Just as you discount what I am saying, there are those out there who will discount what you are saying as lunacy.

My god man haven't you watched the market for the last 18 months!

Bank CD's and Savings accounts are really the way to go...after all they guarantee you'll make money. Don't forget savings bonds, T-Bill's etc.

Melvin, there are people who belive this and will not invest in the market.

Risk aversion takes many forms.
 
I did "OK" collecting and selling Guns as an investment over a twenty year period, but the profit margin just allowed me to keep buying guns. But my wife made $5,000 in a 24-hour period buying and selling CABBAGE PATCH DOLLS!!!!! (remember those Butt ugly hairless dolls?)

So when I started to collect knives, I did it as an investment in a hobby, but with no intention of making money. I buy knives that I like, then I use them and nobody wants to pay more than I did for a well-used knife.

I leave the "ivesting" to my wife. She did it again three years ago with that idiot doll "Elmo". She bought 20 at $19.99, and sold them for $150.00 each. The moral of the story: "invest in the ugliest and stupidest dolls made, and just buy and use your knives for enjoyment."

Also buy "FEDSEC" as soon as it goes public, and my new doll called the "Cabbage Leaf Troll"..............Ira
 
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