Exploding knife market?!

Ellis said:
...........(been at this since the mid 80's)
Lots of new collectors,lots of great makers.
Dave Ellis
http://www.exquisiteknives.com
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As a Maker, I often find myself being comforted when I reflect on something I heard a few years back. I did my ABS Intro course a while ago to basically get my "foot in the door" and to support the ABS. My Instructors were Bailey Bradshaw and Bruce Fuller.
At the beginning of the very first day's class period, Bailey gave a little talk on marketing. He mentioned that we may be concerned about the number of Makers in the knife world during those days, and gave us a scenario of imagining walking down a busy street and randomly asking passers-by if they knew where we could get a custom knife! I'm sure we can all agree that there would be COUNTLESS blank stares back in our direction!
How many persons would we need to ask that question before we could find one person who actually KNEW a custom Maker??!!
10? 50? 100? 1000?
A LOT, for sure.
Quite litterally, the Knife Market isn't even tapped yet!
There are big buyers, small buyers, collectors, users, enthusiasts, fans, etc., all Yet-To-Be, sitting in some Coffee Shop/Donuts-Are-Us right at this moment who will soon be right here on this forum in the weeks/years to come.
I find it a comfort, as a Proud American Knife Maker, that as long as this country is free, knives are legal, and I'm able to swing a hammer, that the fruits of my Trade will always have a home.
There's no end to this Market.
 
AV8R said:
you have a great collection. If you ever get tired of looking at your blade that Winkler accidentally poured all that copper into, let me know. I'll help you out.

Pete
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Thanks Pete. Karen really went all out on the sheath for that one too.
 
Being that I am a collector that doesn't sell his knives, I really don't know a whole lot about how good the market for knives is. It is great to see that things are going so well. I would imagine that it is a very small percentage of makers that is enjoying this boom, and that the majority are just trying to make a go of it.

I only purchase one or two knives a year, so I am not contributing much to the explosion that is being felt.
 
A "bubble" market in not good, long term, for the commodity. Why do you think the gvmnt shut down the Hunt brothers when they attempted to corner the silver market and drove prices up above $50? Turns a solid investment into a highly speculative one. Collectors who truly like custom knives are being replaced by a flood of short term "speculators" who don't give a damn about knives, but see a 25% return in 1 day. Riding the wave. Investors being replaced by speculators. It'll lose steam, but prices won't drop to a point where interest is as strong as it originally was. The "speculators" will move on. Things are going really well.

Pete
 
Some say this is a market cycle. It's actually a market cycle on steroids, a level of which has never been seen. There has never been as much easy money that has fallen into people's hands as there has over the past 17 to 20 years. Credit, the stock market, the housing market, Wall Street and gvmnt policy are the reasons for this. The U.S. economy is fueled by consumption and policy is to promote consumption. There is A LOT of money out there.

Pete
 
All those toys are being funded by a phantom economy. Because we're boys- knives and flashlights, cars and gadgets carry a huge fascination for us,and we're willing to pay anything for them as long as someone else is willing to pay more- otherwise almost anything can be hyped and over-valued. This phantom economy is about to take a hit in around fall2008/2009. It will be interesting to see what's worth what in May 2009.
 
I agree completely. It's unbelievable that some people say our economy is "good". Enormous national debt, huge budget deficit, huge trade deficit, out of control personal debt being backed up by falling real estate values. Yeah, the economy is great.


Pete
 
I've been in this business full time for over 16 years and it has been very good to me :) The "bubble markets" will come and go but the custom knife industry looks mighty strong from my point of view.
 
AV8R said:
Some say this is a market cycle. It's actually a market cycle on steroids, a level of which has never been seen. There has never been as much easy money that has fallen into people's hands as there has over the past 17 to 20 years. Credit, the stock market, the housing market, Wall Street and gvmnt policy are the reasons for this. The U.S. economy is fueled by consumption and policy is to promote consumption. There is A LOT of money out there.

Pete
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Hmmmmmm,

Well, Pete.....I grew up in New York, and the mid '80's Reagan times were crazy there, stockbrokers were making mad, mad money, while the poor were literally going broke simultaneously.

Portents of doom have been showing since the beginning of time. I'm sure in Biblical times, after the prouncement "....and it was good", some killjoy pronounced "...but it isn't going to stay that way".:D

Custom knives in the future will be looked at as "affordable" art in the same way that art glass is looked at now. Remember it does not need to be all about the best of the best, and the highest of the high. As long as there are values to be had, (depending upon an INDIVIDUAL definition of value), and the stupid laws that will be coming don't kick in too quickly, there will be an upward growth in knife collecting.

Best Regards,

STeven Garsson
 
What concerns me is when I hear people say things like "if you buy a Loveless, you're virtually guaranteed to make money on it" or "the price of a Moran will never go down."

That's what people were saying about condos in Florida a year ago. It's what they said about internet stocks in early 2000. It's what they said about tulip bulbs in 1635 ;)

From a broader economic perspective, there's still ample liquidity out there. Until that changes, prices for a lot of assets - from office properties in midtown Manhattan to small-time collectibles - will remain elevated. There are signs that global liquidity is starting to recede a bit now, but these large, secular changes tend to play themselves out over years not days or weeks. One thing the custom knife market has going for it is that the buyers and investors are so diverse. They come from all walks of life and all over the world, and as such are less exposed to any one economic variable than, perhaps high-end art collectors or Florida real estate speculators. While there are certainly pockets of excess in the custom knife market today, the overall market remains quite healthy.
 
Hi STeve,

Custom knives in the future will be looked at as "affordable" art in the same way that art glass is looked at now. Remember it does not need to be all about the best of the best, and the highest of the high. As long as there are values to be had, (depending upon an INDIVIDUAL definition of value),
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Excellent point.

If you look at some of the knives that are being sold for very high premiums. Best of the Best is in no way, shape or form being considered.

How long will it take before the advertising of a "REAL" Bob Loveless starts to show up. I suspect the effect will be similar to what we saw with Lile Knives (Dot and No Dot).

If two or more strata appear in Loveless knives. How will this affect those makers who's knives get very high prices (in the after market) for similar work. What happens if the "Guest Maker" Loveless knives drop to the level of a similar knife. Will the consumer prefer a second strata Loveless for the same money as the next maker in the food chain?

If the price level stratas do not occur than the knives will continue to push the limit of what the market will bear.

Hi Wulf

From a broader economic perspective, there's still ample liquidity out there. Until that changes, prices for a lot of assets - from office properties in midtown Manhattan to small-time collectibles - will remain elevated.
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Excellent point as well.

Investment money will always follow anything that has the potential for a very good ROI.

With the Ebb and Flow of the supply prices will adjust accordingly. This will create market highs and lows. Investors will have to determine when is the time to get in and out to maximize their ROI. Market timing to this end is always difficult.

Along the lines of what you were saying your post. Remember at one time Salt was worth more than Gold!

WWG
 
"What concerns me is when I hear people say things like "if you buy a Loveless, you're virtually guaranteed to make money on it" or "the price of a Moran will never go down."

That's what people were saying about condos in Florida a year ago. It's what they said about internet stocks in early 2000. It's what they said about tulip bulbs in 1635"

I respectfully disagree. The key difference is the difference between artistic relevance and mere commodity.

Real estate property in an artificially hyped up locale- as in everything BUT the land is subject to arbitrary specularion. It boils down to supply / demand and perceived value which in many things- is manipulated.

Art however, may also be hyped but the difference is that once an artist or craftsperson is stamped with the imprimature of 'Top Gun'- the value of thier work has no limit. Indeed, this trend escalates once the said 'Top Gun' passes away. That is the power of luminaries in our history. Thier fingerprint on art in nearly indelible.
I don't need to illustrate this but almost anything man-made in limited quantities that elarges our Historical record in the long run, is likely to appreciate in value.

To be sure, handicapping the future 'greats' is an art in and of itself and THAT's where the big bucks are to be made. Figuring out the future Rembrants , Picassos, Leonardo daVincis and Michaelangelos of the knife world is the province of the few.
But beware! Tastes come and go- so you do want to be alive when your collection is at it's peak and you're in possession of some rare knifemaker's art. Otherwise, it may be your inheritors that get to cash in on the equity that you've built. Timing is everything!

There may be alot of knives and rising values now- but a lot of that is being driven by a combination of speculative manipulation and lots of loose change in people's pockets.
Wait till the economy turns down and everyone tries to pawn thier precious blades ALL AT ONCE ! Gasp!
That's when guys like me, will try to buy the cream!
 
My concern is what the user market for premium cutlery will do. It seems to me that it has gotten bigger, but more competitive. Many more people are buying relatively expensive knives, but much of this new market seems to have been created and exploited by the "mid tech" folks, a goodly number of whom started off a custom makers, and the factories using the designs of the custom guys. I would like to be able to sell the occasional knife and recoup my costs and maybe have a little bit left over. I think that my best hope may be to get good enough to where the guys who buy collectable ABS smith knives might consider buying a similar, but not as fancy knife from me to use and abuse. I know it won't be easy to compete unless i am willing to sell cheap, but I hope that, at a similar price point, I can get to the point where someone who isn't a full blown drooling knife knut might choose one of my blades over a pricey factory model because it is hand made and uses really good materials. Any comments?
 
Just looked at the market results today. TSX has crossed the 14000 point and is at 14003.82 at the end of another great week up 234 points on last week and for the year which began at 12477.97. Gain on the year is 1525.

The Dow closed today at 13,326.22 up for the week 62 points and for the year up from 12,398.01 for a gain of 928 points on the year.

Just past 4 months in. Now, lets assume one has a portfolio that generates $5000 for every one hundred points gained. 15 x $5K = $75K

Now multiply that by the big boys and they are doing millions quarterly so is it any wonder knives are selling for big $ and selling quickly?

If I tried to only buy knives that I thought were going to go up in value and they were an investment, I'd have either a collection that was small, one I may not like or both. I'm more than happy to let my investment advisor make me $ and live with the markets which are doing nicely now but will turn down. Just have to get a big enough cushion to withstand the fall. If one is planning to live from knives and not a dealer such as Les it likely won't work and too many collectors will be selling low and buying high.

Collect what you like within your means and hold back when $ are tight and enjoy when they are loose. If you family inherits nicely valued knives and you have educated them as to their value, then that is just another part of your legacy for your family.
 
There are a few danglers out there that I would like to address.

WWG,

Personally, I don't think like you and Coop seem to about the "REAL" Loveless knives. I think that they are all "REAL", and Jim Merritt is making them about as good as they have ever been right now. Lovett makes knives very close, but they are not the "same". Only ONE shop has produced the REAL Loveless knives, and that they are continuing to do. Food for thought.

My feeling is that it would be healthy to identify the sole authorship or, mostly, sole authorship pieces, and divide all the work into those categories, "mostly" sole authorship, and pieces made within a partnership. IF previous examples hold true, then those identified as "sole authorship" will bring top dollar. It does stand to reason that eventually there will be a downturn in pricing on Loveless knives, but I certainly would not venture a timeline. Who saw the rise in San Francisco/California knives, or Scagel knives coming? Not me, not in a million years.

My feeling is that drop points will go low, but I have educated collector friends that think it is the big stuff that will drop. I play low stakes poker, and tend to do the same with knives.;)

To use the art glass analogy again, Dale Chihuly is the king of the glassworld, like Loveless is for knives, and his work to this day, commands top dollar. Chihuly lost an eye in a car accident a number years ago, so he "directs" his teams to make what he wants. Everyone knows it, and still the prices are astronimical. I just checked e-bay and a small vase from 1984 is $3,000, a larger piece from 1991 is $18,000. The man signs the work, and looks it over, that is about it. Loveless does more than that to each knife, AFAIK.

I agree with Moodino that handicapping is key to making money, that is why WWG is still in the business. He is very good at the handicapping aspect of it.

I also agree with Murray White about buying what you like. It is of supreme importance, but it should be balanced with a desire to at least break even, come selling time. Otherwise, at the end of the day, you are stuck with a bunch of unsellable knives, which might not bother you, but might bother your estate quite a bit.

Joe Mandt, there should always be a market for a quality knife. Users best be in the $300.00 to $500.00 range, much less and I doubt the maker can continue, or has a very low cost of living, much higher and it becomes a keeper, not a user. Anthony Lombardo just wrote an article in Blade on low-cost forged users. It was on the money!

Best Regards,

STeven Garsson
 
$300-500 would be great, Steven:D I don't think that those prices will be justifiable for my users until I have the letters "J" and "S" behind my name or at least until I am prepping for the judging. I will never try to make a living at this, but it sure would be nice for it to work kind of like a part time job as far as the money goes.
 
Hi STeven,

Understand I have no dog in this fight. I don't own a Loveless, made by him or out of his shop by someone else.

My point was and is that I think eventually it will become an issue. Do you want a piece from the master or someone using his name out of his shop. As with the Lile knives, they were obviously being made by those employees who Jimmy trained personally and were gifted knife makers. They could copy Jimmy's standard models to a "T". Same with Jim working out of Loveless's shop.

Do you really think if those employees had put their own name on their Lile copies that they would have received equal compensation for their work?

Again, I don't buy and sell Loveless knives so what happens with that particular sector of the market will have no affect on my business one way or the other. I like so many others are just sitting on the sidelines wondering what will happen.

WWG
 
WoodWorkGhost said:
Do you really think if those employees had put their own name on their Lile copies that they would have received equal compensation for their work?

WWG
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WWG,

I know that you have no dog in the fight, and we just have a difference of opinion, is all.

Big difference between Lile's work, and Loveless's. Lot easier to make a Lile look like a Lile than a Loveless look like a Loveless, otherwise, everyone and their mother would be doing it.

The collectors of the work know the fine points of the differences too, up to and including, spotting fakes. I don't have any Loveless knives myself, they elude my tax bracket, just as they always have. I make more money, think I can finally get one, and the price goes up.:grumpy:

As long as Bob has had a hand in marking the knives, I think that they are worth the price, and so do many, many others.

Best Regards,

STeven Garsson
 
STeven -- over the years I have sold a lot of knives. I think in total I have sold on the minus side maybe a total of -$300 but I would have to calculate my + total. I have made $300 on an exchange within half an hour much like many have.

I look at an estate this way. Insurance, home, investments = kids with a lot of $. Collectibles = work to get a lot of $. Their choice re the collectibles. The other will be determined by the government and how much tax/fees they grab.

I'm sure some of the knives will be kept even by Phyllis if I predecease. The kids will likely keep some and those others?? -- hopefully I did not raise fools and they will take some time and redeem the coupons for a decent $ so to speak.

In the meantime, if I like it and it is decently or low priced, it will get displayed and I'll photograph it and show all of you for everyones enjoyment.

With that keep all eyes open for a couple new acquisitions to be posted soon.
 
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