Custom knives - destined to be worthless?

"...I like them and have not been concerned about how well they retain their value."

My point exactly and what I ...thought....the post was about.

When I said I owned none and probably never would, I did NOT say I do not LIKE them.

I do like knives but can not see spending thousands for one. I spent 30+ years in the collectibles business and can speak from experience that coins (and related paper money) are the ONLY collectibles that have held their value. I have dealt in antiques, art, guns, classic cars, coins, stamps, pogs, baseball cards, diamonds, and estate jewelry. (actually cars have not yet dumped)

I have also been faced with desperate sellers, heirs, and borrowers who had collections of various stuff. The market for used collectibles is rife with buyers who want to lowball and if they can't they just won't buy.

A knife.........MAY increase in value. I do not believe it will.

We are about to begin a (no kidding) immense global depression brought on by a competition of countries to devalue their currencies in order to maintain sales.

Not dissimilar to what is happening in the knife bizz. Price cutting and declining sales are happening in the knife bizz and will be evident in many many businesses as our profligate government spending bankrupts the country.

But, I have no ill will toward collectors of anything. Just take it from a collectibles expert that very few have a lasting lifespan.

But, hey, collect knives. Invest in them.

But for God's sake do it with discretionary income that you can afford to lose.

I'll end my replies to this thread now.

Good luck.
 
I was wondering "at what point do I chime in to this thread?".
I have knives by several "known" makers. I bought them because I and only I wanted the knives.
I spent the last week in the Toiyabe wilderness. I didn't cut anything more difficult than paracord. I didn't chop anything more difficult that oak, I didn't have to dig through anything more difficult than dirt near the treeline. The knives I had with me were made by Bobby Branton and Rick Hinderer....the knives were spectacular. I might have been able to do everthing I needed with a"cheaper" knife. I didn't have to. I took the knives I wanted. They were invaluable to me.

Cheers

Mike
 
I think the tactical knife point is an interesting one. What is the significance of this "fantasy" knife market. Even the special forces guys aren't really using these things. A lot of them are plain ugly, and don't show off a lot of workmanship. Though in an interesting way they are alive with messages, they are like reading the mind of the person who designed them, what tool value they had in mind.

There is an ever increasing degree of skill in knifemaking, and short of finding the first drop point or sub hilt, a lot of beatiful workmanship is worth something, though not much always.

A lot of cool detail on modern knives is being done on computer driven machines. Patterned scales on folder that nobody would have bothered to do by hand. This is a quality manufacturing method, but works against the perception of the maker leaving fingertips.

One characteristic of US knives is that they are always changing. There is little in the way of an overall pattern to work within. Japanese swords have a comon foundation, and values spring from that. But if US makers continue to outdo each other in design and materials, there isn't any constant around which to establish value. That's hardly a unique problem, but none the less a challenging one.

I know something of guitar values, and at least where we are now, it's a lot easier to establish value in big industrial names like Martin, than hoping that some real artisan who died 50 years ago after a career making 150 guitars will get noticed. The latter is happening, but it's tough.
 
Oldpaladin,

Custom knife makers are involved in the the primary market. As they sell their knives directly to the collector or dealer. As you pointed out they get no residual income from the continued sale(s) of any of their knives.

So only a few keep tabs on what their work is doing in the aftermarket. Generally these are the makers who's knives are doing well in the aftermarket.

Many of these makers understand the concept that rareity creates collectibles, therefore giving the knife investment potential. So they limit the amount of each model. Either by total made or by the number available each year. This creates a demand in the aftermarket.

The other variation on this is to take someone like Kit Carson. Spends 20 years developing his knives, his craft and his client base. Then after years of busting his butt, travelling to more shows than he can remember. Spending countless thousands of dollars on advertising, long distance calls, printed catalogs, etc. The demand outstrips his production. To the point where he is years behind and and in fairness to everyone, stops taking new orders.

So while not "rare". They are in demand as one of the cornerstones of any tactical knife or tactical folder collection....and always will be.

This to creates a deamand in the aftermarket.

Custom knifemakers can influence their knives investment potential. However, as has been pointed out. Just a collectors don't usually buy for investment potential. Makers don't generally build knives with that end in mind.
 
Paladin
The second market is just as important as the first market to a maker, it is just that some makers do not pay attention to the second market. The value and sales of that knife once it leaves the makers hands tells him how and what to adjust so the value stays up. Value of its resale determines the value of his current work in a way. I collect knives myself and am very particular who I buy from.

Reguarding Lavan. Being a pawn shop owner does not make you knowledgable in all fields of collecting. Yes, it does with some and it gives you an insight to some peoples plights. To make a point, it took these two knives a long route to where they ended up in a pawn shop in Florida from Indiana but the new owner brought them by for me to see. He was jumping up and down laughing and telling me he had just bought one of my knives for $50, it was a one of a kind and the pawn shop owner wanted $60 for the other cause it had "wire stuff" in the handle. That knife was by Moran.
 
"I've never bought a custom and never will"

:rolleyes:

To me, this statement says it all. This person has no idea about the custom knife market, since he has never been part of it.

Yes, some makers knives are not going to bring any profit, but I don't know anybody who has ever lost money on a Fisk, Massey, Mayo knife. Those 3 are just a few that immediately come to mind. There are many, many others that are still, and will continue to be good investments.
 
There is a maker that had the price of his most popular knife double in just a few days. This happened very recently. The reason for this was that the maker announced that he was no longer going to take orders. This is something that you can not know will happen when you purchase a knife, but it sure made this makers knives a great investment.
 
Coins are a good investment when picked up at the right time in the cycle.

If you had bought investment grade coins in the mid eighties, you would stll be attempting to break even. I collect antique treasure ship coins [ gold dabloons, silver peices of eight, etc ]as well as US gold from the 1800's in high graded condition.

Coins do make excellent investments over a long period of time or the most part.

Like any collecting, you need to do the research, look at trends, etc and then make your choices. It's still a crap shoot for the most part with about anything you want to collect.

Some of my knives will and have gone up in value, but nowhere near the stock market investment vehicles I own.

Many customs are destined to lose you money, otehrs will make a small profit. If you can't match the market of 10% a year since 1933, buy knowing that as a purely investment vehicle, knives are way down on the scale for ROI.

Knowing this, I buy them anyway, but after the 401's and IRA's have been maxxed out.

Brownie
 
I think that there is limited wisdom in COLLECTING ANYTHING. It certainly can / should be done because one is passionate, has the spare cash. However, being able to make a regular buck from so-called collectable items or high end items, takes BOTH the passion and some awesome business acumen that most of us don't have.

The other point is that knives deal to a SPECIFIC NICHE INTEREST GROUP. Just like there are folks who collect antiques, coins, coke bottles and old flags, or even old farm machinery, each caters to a separate group. And THESE GROUPS DON'T OVERLAP, for the large part. It is amazing what sorts of things grab a persons fancy.

For this reason, I think it is unfair to quote a low price on a mass-appeal forum like eBay. I think if you try to sell a custom knife (or custom watch, car etc. )you have to price it so low that it could POTENTIALLY catch the eye of even those who find these things uninteresting. Hopefully out there is a serious collector that thinks "AT BARR FOLDER $150 !!!!!! HOT DANG !!!!" And he/she swoops on that superlow price.

Of course, the vast majority of MAKERS started out never dreaming of making a buck from their knives. Most make knives, and still make knives because they love it and hopefully display some talent. Maybe someone likes their knives and will pay a few $$ for it, just cause its different and perhaps unique or maybe even quite beautiful in the eyes of the buyer.

THE COLLECTOR MARKET IS SECONDARY - finicky, ambivalent, flighty and driven by factors often not in the makers' control.

Thats my attitude anyway. Jason.
 
Ok, all you investment wizards. Give me a good annual ROI within the framework of today's economy.

Personally, I think if you had a product that would return 7-10% most of today's investors would be happy.
 
If I recall... Using the "rule of 77", doubling in 5 years is more like 14%, and that's pretty good...

I own customs that are, by in large, not destined to be the Monets of the future. Most are fixed blades in the $120-$150 range. Not all that expensive, and likely not worth even that today especially as they are all now used. I like these because I like handling and working with something unique, something that has a "cool factor" when I pull it from its sheath and people around me say "hey what kind of knife is that?" They've seen all sorts of work in the last few years, and I rotate them regularly, but my absolute favorite is one made by a knife maker I'm pretty sure none of you will have ever heard of, and while it's a very simple knife, its one-of-a-kind status is pretty obvious even to non-knife people.

Alas being employed again in a conventional office, I can no longer use fixed blades as I have in the past, so as a treat to myself, I broke ranks with my usual approach to knives and laid down $495 for a Bob Lum gents knife (the recent BAKCA show) sporting a clip and thumb nick which (after some practice) I can open single handed as well as any other tactical knife I own (well almost). I do have some other very nice small folders appropriate for my office environment, but the Lum has certainly become my EDC of choice in that environment, and I get to enjoy using it every day!
 
Hi Matthew,

Actually it is the "Rule of 72". Which equates to a 12% Annual ROI, having your money double in 6 years.

That of course is in good times.

Remember, your lucky if your money market accounts are paying 1-1 1/2% (and that is with a minimum of $10,000).

Bank CD's are coming in around 3-4 percent.

So in today's economy, what is a good or better than average annual ROI.

Yes, there is a point to this.
 
To touch briefly on the issue of the Tactical knife market, i was actually just thinking about this the other day. I think the tac/utility market will always be strong relative to other segments of the knife market, this is because 1) Tac/Utility knives are, well, useful. 2) If you buy them from the great makers like Carson, Obenauf, Mayo, JWS, Boguszewski etc, the non-millionaires among us :) can afford to purchase nice looking knives that offer exceptional F&F and quality without spending $5-$10,000 for a fancy custom. 3) This is probably the most important reason, sad is it may be, let's face it, guys, from a young age, get off on weapons, power, strength, overbuilt, precise machines all across the board, so, of course Tactical knives are going to continue to appeal to that primal man in most of us who likes and responds to the wickedness or power inherent in a well designed and built tactical knife. I wish i could afford to buy a Ron Lake in every imaginable config, but i cant, i know few who can, and instead, i get a lot of satisfaction from adding new Obenaufs to my collection at $350 a pop. :)
 
Les and Fisk,

You gentlemen are correct. I'm afraid I've not been steeped, or dipped, in the collective waters of knife accumulation... Investment-wise, I'm sure that some do profit, and keeping tabs upon one's work could determine present and future acquisition, advertising, and production... Most short sighted of me... Someday, I'd like to "collect" or own, Mr. Bill Bagwell's magnificent Hell's Belle (no, NOT the fine Ontario offering, I have two already, but one or two made specifically for me...). Custom knives must continue to be built, for they are the templates of future knife designs... Each new blade design or facet thereof, is an example of "Improvise, adapt, and overcome." Artisans refelct civilizaion, by standing upon the shoulders of their predecessors... Through innovation, we all benefit...

Regards and Respects,
Carter, oldpaladin, out...
 
Les, I just love it when you talk dirty like this...
Much like a stock portfolio, you have to put together a custom knife portfolio. It helps to be able to assign your own beta's and coeficeint variables, based on real world experience with custom knives. You can even come up with your own version of a P/E type ratio for makers, if you want to take it that far.
Click to expand...
You've obviously 'paid your dues', and know of what you speak...and while my money is with you from a purely objective monetary standpoint...that, and your years as a knife purveyor, as shared here speak volumes...as do those of Paul Basch, et al.

Nonetheless, that statement notwithstanding, I still agree with the general sentiment here, that being; purchase 'that what appeals to you the collector', using discretionary income (not the mortgage payment/rent check/milk money), and by doing your 'homework', with a dash of luck, an investor just may 'get lucky' with knife collecting...or not.

IMNSHO, for the average 'collector', knives as a financial investment pretty much suck from a dollar percentage return standpoint...

But 'what the hey', those knives might buy the enthusiast years of enjoyment if he or she buys wisely. And that alone, should be good enough...right? ;)

Mel

P.S. Lavan, I'd been told that currency was a traditional poor investment. Thanks for the heads up there, apparently more research is due.
 
Originally posted by Trace Rinaldi
Try to find ANY Ken Onion blade he EVER made for less than it sold for... Thats just one example, there are MANY more!
Click to expand...

Interesting.... I actually think that the vast majority of knives do resell for less than they sold originally. Does anyone have any idea as to the % of makers whose knives resell for more than they sold initially, say among the pool of makers that set up at Blade?

Les, as you no doubt know the stockmarket has been returning about 7%, post inflation, during the last 30 years. That's not a portfolio of selected stocks - just "the market", which can be understood both as a well diversified portfolio or as the average portfolio. I doubt any average knife collection will get you this, even on the shorter term.

(To be clear, I do collect - I have several thousands on knives right now - but I don't expect to make any modey at it. In effect, I am "renting" the pleasure of owning the knives. But financially, it's likely to be a net loss over time.)

Interestingly enough, I also collect authentic Japanese swords, and I am 100% certain that no sword retails for what they initially sold for.
 
Joss and Gollnick,

So if I were to tell you I could guarantee in writing (legally binding contract); in 12 months or less a 10% ROI.

Im sure you would agree that would be considered an excellent ROI in todays investment climate.

Note: This is guaranteed!

There are no tricks, catches or other loop holes. It is a 10% ROI in 12 months or less.

If I can produce a 10% return, I have to pay the 10% out of my pocket. So you get the 10% either way.

So all of you who said custom knives were a poor investment. It's time to put your money where your mouth..er type written words are.
 
Originally posted by Les Robertson
Joss and Gollnick,

So if I were to tell you I could guarantee in writing (legally binding contract); in 12 months or less a 10% ROI.

Im sure you would agree that would be considered an excellent ROI in todays investment climate.
Click to expand...
Les,

Sorry but with your risk profile I would demand significantly more than 10% - more like 30%. I don't know anything about your finances, etc. No non-public business can get funding at this rate, and very few public companies can, outside some choice Fortune 500.

This is an attractive offer compared to other knife purchase channels, but as an investment, compared to the stock market (which returns 10% before inflation on average), it just doesn't fly.

JD
 
Hi Joss,

I can offer 10%, because unlike any Fortune 500 company, any blue chip stock and any guaranteed Bond. I offer the 10% ROI Guaranteed in writing.

There is no Fund, Stock or Bond that guarantees 10% annual return in writing.

NOTE: With the possible exception of some of those MultiMillion Dollar buy in funds.

If it did every investor in the world in todays market would sink their money into that stock, fund or bond.

Also, if you were looking for 30% you would be viewed as a Venture Capitalist. Your "in" would be several million dollars.

As for the "risk" there is none. The ROI is guaranteed. You can even have your attorney draw up the contract.

I can appreciate the level of Risk Aversion you have. So it is best to avoid investments you are not comfortable with.
 
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