Exploding knife market?!

marcangel

marcangel

Joined
Dec 20, 2001
Messages
1,217
Although by some standards I'm a "newbie" since I've been seriously collecting custom knives for about 7 years now, I am absolutely stunned by the current market, particularly for engraved and auto folders. I spoke with Don Guild yesterday as a "buyer" and was fortunate enough to get two of the four knives I wanted. He informed me that the current market is being driven by "new collectors". Personally, I think that may be true, but things are getting to remind me of the heyday stockmarket years of the '90s and recent real estate booms.

Although the stock market is RAPIDLY catching up with my knife "portfolio" I'm still looking at an "honest" average appreciation of 150% in the past 2 years. Where is all this money coming from? When will it end? Thoughts? Honestly, let's consider that people are waiting IN LINE to buy $+1000 PRODUCTION knives from William Henry! I don't even bother going to the ECCKS unless I'm in the door in the first 15 minutes and I've spent more than 5K...is this REAL?!!
 
Don't know if I'm "in the know" or not, but Don Guild called me this afternoon and I was fortunate enough to pick-up another Ken Steigerwalt Auto. It was my first choice over the one I posted yesterday, however it was already sold when I initially called him. The original buyer backed out and I was first on a three name list of backup buyers hoping to get it.

Don also told me he had already sold aprox. 70 of the 83 knives he listed on Sunday afternoon. Said "he had never seen anything like it".

I agree with Steve, the custom knife market seems to be favorable for the investor.
I’m looking for sales to be brisk at this year’s Blade Show.
WWG, what’s your opinion on this?
 
WWG will tell you about heavily engraved folders by the top names going for insane prices in the late '80's to mid 90's.

There are some heavy hitters that are buying and moving knives right now, that have disposable incomes that most of us don't.

The problem with these "newer" buyers is that we don't know who the next object of desire will be. That affects a lot of things. For instance, there are Bogis available for 3 times maker cost know, but 6 months ago, they were 4x maker cost.

Had a very knowledgeable purveyor call me last week to ask about one of the top dogs in the ABS, I told him same as everyone, 1)piece, 2) maker, 3) price. Follow that rule, and you will do all right.

As a buyer, I consider myself on par with PTGDVC, Kevin Jones, Stephen Foster, Roger P.......(no names left out intentionally, you get the idea), I buy, period, but am slowing down, substantially.

When you get enough collectors that slow down, the market goes flat, until or unless there are new collectors buying THOSE knives. Right now with a lot of top $$$ going to tactical knives, it is hard to get a bead on what is going to explode.

Loveless and Loveless style knives are still a very good bet, with makers like Lovett and Young in the mid to high range. Robert N. Parker may very well be the next maker to explode within this style, but I am not sure. Rob Brown and Bill Ankrom are coming up very fast.

The top two folder guys are Michael Walker and Ron Lake in terms of desireability and price at this point, and if you can get from Walker directly, will beat just about any stock except Berkshire Hathaway.:D

I still don't like "investing", but I do like a solid return, and/or a sure thing(Galyean, Boguszewski, Carson, Lum, Walker, Lake, Young, Lovett......etc.)


Best Regards,

STeven Garsson
 
Kevin Jones said:
I agree with Steve, the custom knife market seems to be favorable for the investor.
Click to expand...

Let me qualify my previous statement; the custom knife market seems to be favorable for the savvy collector/investor who is and has been buying certain maker's knives at realistic prices.

Based on speed of sale, and price received during my collection adjustments, and other collector's successes with their offerings in the last six months, seems like the custom knife sales are generally on an upswing.
 
I am pleased for Don Guild and for custom knives. Don confides he has made only ONE change in the last few offerings and it made a huge difference in his sales..... :D

The REAL Loveless market is blasting through the roof. That's astounding to even me. Good alternatives are a value.

Coop
 
I answered a similar question with regard to custom flashlights about a year ago. Really upset some people.
When people are waiting in line for anything other than food, water or gasoline, it means that they are AOK in life but are really needy in the affection department. The same holds for those that are willing to pay over and above the starting price for anything that someone else has held as an 'investment'. Doesn't matter if we're talking Beanie Babies or Limited Edition knives. The market for anything collectible can also turn sharply downwards... as it has for Beanie Babies:) . Ironically, I have done very well -in the order of 250% ROI on some of the knives I've resold. So at least the trend is still upwards. There's another factor- Rules. When TSA clamped down on knives, that completely changed thier value. SAKs and Multi-tools went sharply down and 'quality' knives went sharply up. YMMV:D

marcangel said:
Although by some standards I'm a "newbie" since I've been seriously collecting custom knives for about 7 years now, I am absolutely stunned by the current market, particularly for engraved and auto folders. I spoke with Don Guild yesterday as a "buyer" and was fortunate enough to get two of the four knives I wanted. He informed me that the current market is being driven by "new collectors". Personally, I think that may be true, but things are getting to remind me of the heyday stockmarket years of the '90s and recent real estate booms.

Although the stock market is RAPIDLY catching up with my knife "portfolio" I'm still looking at an "honest" average appreciation of 150% in the past 2 years. Where is all this money coming from? When will it end? Thoughts? Honestly, let's consider that people are waiting IN LINE to buy $+1000 PRODUCTION knives from William Henry! I don't even bother going to the ECCKS unless I'm in the door in the first 15 minutes and I've spent more than 5K...is this REAL?!!
Click to expand...
 
You asked a market question so here are some useful market cliches to keep in mind. The market is a market. The trend is your friend, but bubbles can and DO occur. Bulls and Bears can make money, but pigs can get slaughtered. You will never sell at the high, but you might be forced to sell at the low. If you think you are the smartest guy in the room, the odds are that you are wrong.

"You get rich slowly, you get poor quickly." ptgdvc 2007

"Knowing what to buy and buying it, IS MUCH easier, than knowing what to sell and when to sell it." ptgdvc 2007

"If only, I had the discipline to follow my own advice..." ptgdvc 2007

Buying the best examples from the most desirable makers, at realistic prices, is a reasonably safe bet (there are no certainties). Of course that begs several VERY difficult questions. Who are, or will be, the most desirable makers and why? What are the best examples of their work and why? What is a realistic price and why?

I have my answers and everyone else has, or SHOULD have theirs.
 
You mean there are custom knife buyers out there that view their custom knives as investments????:eek:

What a contrarian strategy.

PTGDVC here is another cliche...Those who do not study history are doomed to repeat it.

There is a very hot sector in the market right now that within the next 5 years will implode.

Much like the collapse of the interframe folders it will leave a bad taste in many high end buyers mouths. Consequently they will look elsewhere to "invest" their money.

The enemies are a narrow focus and inability to walk away when you should.

WWG
 
WWG,

Sometimes, even if you know history, you still get doomed to repeat it.

New Collectors = New Money = Higher Prices.

In the great scheme of art/craft collecting/investing, custom knives in general and forged fixed blades in particular, are a tiny little backwaters. If real players with high net worth's in the 100s of millions ever became interested in custom knives there would be a real price explosion that frankly that would blow little guys like me right off the table and out of the game. Big fish eat little fish. I might be able to carry on as an advisor/pilotfish, IF a "real player" actually believed that I could be of use advising him. But that would be the end of it.

This senario actually occurred to me in another collectible/investment during the 80s and 90s, so I know how it goes. I just shake my head about that one nowadays. Frankly it just sucks all the enjoyment out of it, so I honestly hope our little backwater stays calm a while longer.

P
 
You know, I have never had anyone ask me to make an exploding knife......I think that they may be illegal in Florida:p
 
ptgdvc said:
You asked a market question so here are some useful market cliches to keep in mind. The market is a market. The trend is your friend, but bubbles can and DO occur. Bulls and Bears can make money, but pigs can get slaughtered. You will never sell at the high, but you might be forced to sell at the low. If you think you are the smartest guy in the room, the odds are that you are wrong.

"You get rich slowly, you get poor quickly." ptgdvc 2007

"Knowing what to buy and buying it, IS MUCH easier, than knowing what to sell and when to sell it." ptgdvc 2007

"If only, I had the discipline to follow my own advice..." ptgdvc 2007

Buying the best examples from the most desirable makers, at realistic prices, is a reasonably safe bet (there are no certainties). Of course that begs several VERY difficult questions. Who are, or will be, the most desirable makers and why? What are the best examples of their work and why? What is a realistic price and why?

I have my answers and everyone else has, or SHOULD have theirs.
Click to expand...

I have always taken the investor/collector direction in acquiring and selling as I adjust my customs collection. And have been taken to task here more than once regarding my philosophy. However, I don't think you can begin to compare investing/collecting in custom knives to investing in the stock market. The stock market is much more volatile, stressful and risky an endeavor. :eek:

My position is that a nice return on investment can consistently be made on custom knives over the long term while participating in something you love to do.
That's a win/win situation my friends. :) So let's relax as prices and sales will drift upwards and downwards over time, but the collectors and makers that keeps up, stays informed and does their homework will reap rewards financially and in many other ways. ;) :)
 
Hi Kevin,

Hate to disagree with you but you can compare investing in the stock market to investing in custom knife market. Any investment will carry a certain amount of risk. It is the level of your risk aversion that will determine what you will invest in.

Stock portfolios are put together to minimize risk and compensate for volatility within market sectors.

The same is true for those investing in custom knives. There are always multiple "hot" sectors in the custom knife market. Conversely there are markets that have matured and are moving towards death.

The "investors" are currently investing in about 25 makers, which is why you see so many internet based dealers and collectors for that matter. Focusing on that particular market sector(s).

Which of course presents huge opportunities in other areas of custom knives.

There are other patterns of high dollar buyers that are not openly discussed. Short term they are pushing up prices (artificially). This does nothing but hasten the maturity of that particular market.

As it is with stocks those who got in early and sell before the top is reached. Always fare better than those who get in late and either don't know when to sell or fall in love with a "Dog" and regardless of the fact the price is taking a nose dive, they hang onto it. One of Peter's Principles. :D

Stocks, like bonds, coins, paintings and custom knives can be investments. The stock market just has more people investing in it. But with this "explosion" maybe someone will get a seat on the exchange.

WWG
Investing in custom knives since 1983.
 
WoodWorkGhost said:
Hi Kevin,

Hate to disagree with you but you can compare investing in the stock market to investing in custom knife market. Any investment will carry a certain amount of risk. It is the level of your risk aversion that will determine what you will invest in.

Stock portfolios are put together to minimize risk and compensate for volatility within market sectors.

The same is true for those investing in custom knives. There are always multiple "hot" sectors in the custom knife market. Conversely there are markets that have matured and are moving towards death.

The "investors" are currently investing in about 25 makers, which is why you see so many internet based dealers and collectors for that matter. Focusing on that particular market sector(s).

Which of course presents huge opportunities in other areas of custom knives.

There are other patterns of high dollar buyers that are not openly discussed. Short term they are pushing up prices (artificially). This does nothing but hasten the maturity of that particular market.

As it is with stocks those who got in early and sell before the top is reached. Always fare better than those who get in late and either don't know when to sell or fall in love with a "Dog" and regardless of the fact the price is taking a nose dive, they hang onto it. One of Peter's Principles. :D

Stocks, like bonds, coins, paintings and custom knives can be investments. The stock market just has more people investing in it. But with this "explosion" maybe someone will get a seat on the exchange.

WWG
Investing in custom knives since 1983.
Click to expand...

All good points WWG, and I agee in general terms, but investing in real estate, art, coins, classic cars etc. are all quite different than investing in the market. I notice when the stock market is down, collectables, real estate etc. rise as many investors seek tangables to invest in.

And as far as the volatility and risk involved; it's possible to be wiped out or gutted in an afternoon in today's stock market. It can be like a war at times even with a diversified portfolio. :eek: :D

However seriously, how much are you going to lose in a short period on your customs knives? Yes, by making bad decisions over a period of time you will have to sell at a lost.
My point is that investing/collecting in customs can be enjoyable but still profitable.
The stock market is work IMO.....

Joss, IMO investments should never bet looked at in terms of "right now", but mid to long term. Profits made real fast, will more than likely be lost just as fast.
Good discussion:)
 
Hi Joss,

My take is that the market is not going through the roof. The market has been gaining strength for the last several years. Currently there is some artificial inflation of a couple of markets. This will level out then like all things that go up....

The interframe craze lasted about 5 years. Then....nothing. All the big money guys took a huge beating and never returned. It cost Paul Basch his position in the market and he could never recover (remember at that time Paul was the "Man".

Of course out of that came the tactical folder market. Which saved custom knives and breathed life into the almost extinct factory market. My opinion that the many of the members of the Knifemakers Guild felt so threatened by this sector of the market, they banned those makers bringing knives to the Guild Show that were not produced 100% in their shop. How did this work out for the Guild....Not too good.

That aside as those who are getting a favorable ROI with their knives tout the salad days. There are hundreds of makers who are consistently taking knives home from shows.

invest in the sectors that are hot now. But be prepared to pull the trigger the instance there is a "slip" in that market. Those who do no will be left with knives that will only bring a loss when they are sold.

The higher the prices go on a market sector the fewer buyers there are. Those with the discretionary income to invest in multi-thousand dollar knives are the same people who have the financial stability to sell off their knives at a loss if necessary. Imagine someone dumping 50 - 100 knives of a very sought after maker onto the market at well below market price. This is the very volatility that can impact the custom knife market. The market may not be in the position to absorbe that many knives. That will also signal to others invested in that market to move quickly to liquidate their knives. Putting even more of those knives into circulation.

Couple this with the fact that these knives moved out of the price range of the majority of the custom knife buyers. That they moved into other market sectors to find places to spend their money.

The last two paragraphs are exactly the scenario that happened to interfame folders in 1991. The Japanese with the power of the Yen were buying the majority of these knives. When the Japanese Market crashed these knives were dumped on the US market.

For a little history lesson google Barrett and Smythe. They were purveyors of some of the most exceptional custom folders the world has ever seen. The operative word being "were".

For all you newbies who have only been into custom knives for 10 or 15 years.
Jump in and feel the excitement. In todays market, it is even more important to do you homework. Know the makers position in the market. Know when the maker has hit a plateau and even more importantly understand if or when the end comes, when to get out.

WWG
 
Hi Kevin,

And as far as the volatility and risk involved; it's possible to be wiped out or gutted in an afternoon in today's stock market. It can be like a war at times even with a diversified portfolio.
Click to expand...

Most high end custom knife buyers have a position in the stock market. If they were wiped out in an afternoon, how long do you think it would take for the high end collectibles markets to be wiped out. Remember Interframes in 1991.

You are correct that more people follow the stock market than cars and knives. Coins are a pretty hot commodity and todays numismatist is very cognizant of the coin market. With regards to gold and silver coins their buy/sell price can change hourly. This can result in a change (either up or down) of thousands of dollars depending on the Mint State and rarity of the coin. This volatility is of course generated by what the markets do.

All that being said, I am having a killer year. So I hope all of you guys are right!!!!

WWG
Professional Prognosticator!!!
 
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