Knife collecting and the economy

[martinr]

Collecting is about many things, not always buying and selling, turning a profit etc. I'm in Milan Italy right now and spent the day at the Milan Show. I bought a knife from Salvatore Puddu, $8500 USD and I didn't have any cash (euros) to pay for it. An Italian collector I've never met or even seen before knew I wanted the knife and paid for it for me. He asked if I was going to the ECCKS in March and I said yes and he said just bring me the money then. Didn't even ask for my address or anything like that. He knows I'm good for it, he helped Salvatore sell a knife and he helped me buy the knife which by the way wasn't on the table for sale but in Salvatore's bag and he knew I admired his knives so showed it to me. I was also introduced to Pedersoli the engraver, I showed him a couple of knives I had purchased, he admired them and then told me anything I want just ask he'll take care of me no problem. I said thank you and told him when I have a knife worthy of his engraving I'll be in touch. I don't speak Italian and this was all done through the wife of another Italian collector and she was fluent in English. I could probably flip the knife I bought and make some money but that's not why I bought it. I like it. I'm not emotionally attached to it but so what. The experiences are sometimes worth more than the profit or loss and that's why I'm here. Of course there are dealers here looking to make a buck, even collectors and makers that put their name in a lottery drawing hoping to get picked and sell, nothing wrong with that in my opinion. I do it too. I think this hobby/passion is more about relationships, friendships, and a little bit of ego and the money aspect is secondary. I spend a lot of time on my small collection, if it was really about dollars my time would be better spent on my business. I'm opinionated, get annoyed easily and never think about what's good for the knife collecting community.

 

[RogerP]

This is an interesting subject to me. I can only speak with the way that I see the market.
First to me it is maker and design then material choice is soooo important. Same knife---- different materials---- and the knife will lose 40% on the second market or gain 40%. This holds up ever more in the ecomony we are in. Fresh picked is always best but a maker can do many things to help his second market hold up and to me it falls 95% upon the maker to work it so his second market does hold up.

A good case in point is during the time the interframe was booming, Buster, Schmidt and a few others was also working their classic designs. Demand for their works is stil growing after these years. The material choices they made is also evident.

Agree completely - and this is something that we discussed at length at Ashokan this year.

As to the collector / investor point - yes, there are generally aspects of both present in most custom knife enthusiats that I know. Few are pure investors indifferent to the product itself, and few active custom collectors are completely indifferent to the secondary market value of their knives. In that great in-between, some focus on the investment aspect more than others. For the spreadsheet collectors investment seems to be, if not the most important single aspect, at least tied for the top criterion with whatever else. The satisfaction gained from turning a profit on the knife seems to be a bigger rush than aquiring the knife in the first place and enjoying it for the period of ownership. And it is the balance sheet by which the success of a purchase is primarily measured. Not a thing wrong with that, of course.

Others place greater significance on the piece itself, on the relationship with the maker, and on other non-monetary factors - but would still rather make money or at least break even on the majority of knives they own in the event of re-sale. Of course, there's not a thing wrong with that, either.

As for the economy and it's impact on the market, I can't comment on $5k - $10k knives, because I don't play in that sand box. But as for the $300 to $3,000 zone - well, I've bought more this year than in any other single year before.

Roger

 

[martinr]

Speaking of Schmidt, there were about thirty Schmidt knives on display here, they were magnificent, Pachi has a book coming out and that's the reason for the display, they never get old.

 

[The Amazing Virginian]

There are collectors that get what they want and buy/sell very little after that(not good for the collecting market as a whole) and collectors that are "active" in securing and releasing inventory onto the market(which is good in terms of turnover, potential quality product, and bottom line for makers)

And there are collectors who buy what they want and do not sell (or maybe sell very little). They gather. They accumulate.

Someone might argue they are pure collectors.

col·lect 1 (k-lkt)
v. col·lect·ed, col·lect·ing, col·lects
v.tr.

1. To bring together in a group or mass; gather.
2. To accumulate as a hobby or for study.

Your idea of a collector would be skewed to the collectors that you know, your experience with the market and your own thoughts.

Exactly.




Back on the original topic, it might not have been obvious, so I want to be clear that I quoted Don Guild above because I agree with his statement based on my very limited perspective.

 

[Kohai999]

And there are collectors who buy what they want and do not sell (or maybe sell very little). They gather. They accumulate.

Someone might argue they are pure collectors.

col·lect 1 (k-lkt)
v. col·lect·ed, col·lect·ing, col·lects
v.tr.

I didn't use to sell much, but ran out of room....forget about displaying, I don't have much room left for storing.

Keep accumulating you Pure Collectors.....let us know what you do if you run out of room for your collection.

I like Don Guild, but there is a great deal that he does not know about knives and knife collecting.

Virtually every maker that produces drop point hunters does well during hunting season....that might be news to knife collectors, but it isn't to hunters.

Go to a gun show sometime, Ken....maybe the Tulsa Wanenmacher's show....it'll change and possibly blow your mind, if you agree with what Don says on the subject.

I make my statement's about the economy and collectors as someone who has probably worked in and explored most facets of the subject. We had a knife shop in Seattle in the '90's, I actively collect and now, I am working for a production cutlery distributor. The economy is down, sure, but that has not seemed to hurt the knife business very much, not in the broad scheme.

Best Regards,

STeven Garsson

 

[Kevin Jones]

And there are collectors who buy what they want and do not sell (or maybe sell very little). They gather. They accumulate.

Someone might argue they are pure collectors.

And some may argue there's no pure, un-pure, good or bad way to collect, only the method that brings the individual collector the most enjoyment and/or satisfaction.

 

[jdm61]

STeven, I know a number of guys who have gone to those monster shows in Tulsa purely for entertainment, and I have been told that they are still like the gun shows of old and not a gathering place for guys selling mall ninja accesories, cheap WW2 memorabilia and 25 kinds of jerky. Is that a place where a maker could actually move some product if he was smart about when he went and what he took?

I didn't use to sell much, but ran out of room....forget about displaying, I don't have much room left for storing.

Keep accumulating you Pure Collectors.....let us know what you do if you run out of room for your collection.

I like Don Guild, but there is a great deal that he does not know about knives and knife collecting.

Virtually every maker that produces drop point hunters does well during hunting season....that might be news to knife collectors, but it isn't to hunters.

Go to a gun show sometime, Ken....maybe the Tulsa Wanenmacher's show....it'll change and possibly blow your mind, if you agree with what Don says on the subject.

I make my statement's about the economy and collectors as someone who has probably worked in and explored most facets of the subject. We had a knife shop in Seattle in the '90's, I actively collect and now, I am working for a production cutlery distributor. The economy is down, sure, but that has not seemed to hurt the knife business very much, not in the broad scheme.

Best Regards,

STeven Garsson

 

[jdm61]

And some may argue there's no pure, un-pure, good or bad way to collect, only the method that brings the individual collector the most enjoyment and/or satisfaction.

Kevin, I think that the speculative aspect has been a factor for a while, but today, it really seems like the 400 pound gorilla in the room in a lot of instances.

 

[Wulf]

I love Martinr's post above. His anecdotes and commentary really captured one truly irreplaceable aspect of custom knife collecting which is the many wonderful people that comprise this community.

But I want to speak briefly to the investment aspect of this discussion. As some of you know I'm a professional investor so I give this topic a lot of thought.

Just the other day I read an article in the Financial Times about a contemporary art auction at Sotheby's in New York. Some $375 million was spent - a record amount for Sotheby's - and a number of other records for individual artists were shattered as well with many pieces selling for multiples of their highest estimates. The next night Christie's held a contemporary art auction and raised over $400 million, another record. That's over three quarters of a billion dollars spent in just two nights in New York. Not bad.

Why was demand so great in such a sluggish economy? Because where else are people going to invest their money?

Stocks? PEs aren't exactly compellingly cheap at our current rate of earnings growth, and the outlook for next year remains extremely murky given ongoing problems in Europe and imminent fiscal drag here at home. Not to mention the fact that capital gains and dividend taxes are about to go up too...
Real estate? Well if you didn't get burned in the last go-round you've still got plenty of time to pick your entry considering all the shadow inventory that's still out there...
Bonds? Interest rates are lower than the current rate of inflation so you're actually guaranteeing yourself losses in real (inflation-adjusted) terms by investing in bonds right now. But if that's not enough to deter you, consider the fact that per capita debt in this country now exceeds that of Spain, Italy, and yes, even Greece, and that if we don't fix our fiscal situation very quickly the government will most likely default on its debt and totally screw the bondholders...
Precious metals? The rationale for owning them is good but they produce no income and have already run up quite a bit...

So that leaves Art and other high-end collectibles. And indeed that's exactly where a lot of the smart money is going right now. It's a simple asset-allocation decision based on the macro-economic environment and a relative value assessment regarding the investment options available.

So in a perverse sort of way, the crappy economy and disaster of a fiscal situation here in the U.S. could actually be said to be helping the high end custom knife market.

Besides, when everything really does go to pieces and the government collapses under the burden of too much debt, knives are the only investment you'll be able to actually stab people with when they come to steal your food.

 

[Kohai999]

STeven, I know a number of guys who have gone to those monster shows in Tulsa purely for entertainment, and I have been told that they are still like the gun shows of old and not a gathering place for guys selling mall ninja accesories, cheap WW2 memorabilia and 25 kinds of jerky. Is that a place where a maker could actually move some product if he was smart about when he went and what he took?

Recognizing that a gun show is every bit a competitive environment that any place where people are trying to get maximum return and trying to extract the capital that is in the room, yes....new makers could do well. I have a customer known for stocking higher end US made automatic knives, and he KILLS at that show....you gotta know your target market....It's probably worth checking out as a spectator the first time.

Best Regards,

STeven Garsson

 

[jdm61]

Recognizing that a gun show is every bit a competitive environment that any place where people are trying to get maximum return and trying to extract the capital that is in the room, yes....new makers could do well. I have a customer known for stocking higher end US made automatic knives, and he KILLS at that show....you gotta know your target market....It's probably worth checking out as a spectator the first time.

Best Regards,

STeven Garsson

Thanks, man. The funny part is that with what they charge for tables, it might by almost as cheap to wing it the first time an exhibitor as in the spectator role. Probably not as easy to observe.

 

[marcangel]

First let me address martinr comment, the knife is a one off Osborne, that was built to my spec. 6 years ago I paid $750 for the knife directly from Warren. The engraver was Tim George who admittedly underbid the job for $2500. So I have $3250 in it. It has been in Blade and Knives Annual. I have turned down $7000, simply because it means more than that to me. I have sold little of my collection over the past decade. So I am a collector, not a speculator or a flipper. Try and find a well engraved knife with that much coverage for $6K or less today.

I have collected almost all folders Sawby, Osborne, Kious, Harumi, Espisito, H.H. Frank, Hoel and all the usuals. My point is that unless I start selling, I am hard pressed to add to my collection. My point is that with less disposable income these days, it is much harder to justify buying anything that is "better" than what I already own. I am glad the market has,recovered to so extent, I think, kinda...well maybe not.

 

[marcangel]

I just read Wulfs post, I guess I am pissed that I did well in the "golden age" of knife collecting!! I bought an Osborne coke bottle years ago on ebay for $800. A run of the mill double oval inlay, except the inlays are black jade and austrailian opal, you cannot buy the opal for less than $3K today, and there are few makers that would work with it just because of the risk involved in ruining the material. Can anyone offer up a mosaic inlaid Espisito for $6K? Would anyone?

 

[Kohai999]

I just read Wulfs post, I guess I am pissed that I did well in the "golden age" of knife collecting!! I bought an Osborne coke bottle years ago on ebay for $800. A run of the mill double oval inlay, except the inlays are black jade and austrailian opal, you cannot buy the opal for less than $3K today, and there are few makers that would work with it just because of the risk involved in ruining the material. Can anyone offer up a mosaic inlaid Espisito for $6K? Would anyone?

You did well for yourself.....the makers do much better for themselves these days, and that is generally a good thing.

A piece like you are talking about from Warren might sell for many more dollars than that AT THE TIME, and the seller probably did not know wtf they had...which is likely.

That isn't the golden age, that is market ignorance....many, many collectors are more ignorant than they might think. You should always know what you have is worth, if for nothing else, insurance purposes.

Best Regards,

STeven Garsson

 

[not2sharp]

I think that the micro-economics count far more than the macro-economics. If you wait until your doctor tells you to get your things in order, and then decide that your large collection has to go in 90 days or less, it will cost you. It is far better to sell the items slowly without haste, and to do it directly rather then through a third party. What's the rush? It is the buyer who needs to be motivated to capture an interesting addition to their collection, the seller has already made the investment in cash and labor and controls the inventory. Knives have a pretty long shelf life and require relatively little overhead. If the family is in such a trot to cash you out then they deserve to get 10 cents on the dollar.

My message to the family would be to:
1) take your time
2) learn about the product you are selling
3) consider the tax ramifications
4) develop a network
5) enjoy yourselves

n2s

 

[Jakester]

My idea of a collector is someone who collects items because they like them.
And intends to keep them as a part of a collection.

I know many collectors and all go through what I like to call "eclectic purification". They fall in love with new things and often sell to purify their collection, striving to retain the best. Every collector I know, including myself, has what I refer to as our "pyramid pieces". I will own this at death and plan to be buried with it!

 

[The Amazing Virginian]

I didn't use to sell much, but ran out of room....forget about displaying, I don't have much room left for storing.

Keep accumulating you Pure Collectors.....let us know what you do if you run out of room for your collection.

Knives are small. I am thinking I would need way more than 1000 before I ran out of room. Then time to buy a bigger house.

Go to a gun show sometime, Ken....maybe the Tulsa Wanenmacher's show....it'll change and possibly blow your mind, if you agree with what Don says on the subject.

I go to quite a few local gun shows. Maybe (probably) shows like the Nations Gun Show are not the kind of gun show you mean, or maybe the gun market here is different than Tulsa. What sells around here are functional guns rather than collectibles such as flintlocks, engraved wonders, and 1st generation Colt SAAs. I see the same old dudes at show after show with their tables full of high priced history pieces . . . I see a lot of the same old guns show after show and I have never actually witnessed a sale of any of that stuff. But every show I personally see dozens of brand new factory guns sold (and every so often I buy one myself). I am on the mailing list for some antigue gun auctions like Rock Island, but I don't collect guns (I own "functional" guns), so I don't keep up on that market.

I am active in other collectible markets - coins, paper money, and Americana for example. What it seems to me has happened in those markets is what Don Guild suggests is the case in the collectible knife market. A flight to quality. The choicest, rarest and higest end paper notes, coins, and Americana are in as strong demand as I can recall and the prices continue to escalate through the economic depression as the buyers of these items are folks with very very large disposable incomes and those foiks have been affected comparatively less by the economic depression. In contrast, more common and lower priced pieces . . . have lost value and there appear to be fewer buyers with disposable money for those items.

I am not sure what particular lessons I am supposed to draw from gun shows about the knife collecting market that would contradict what Don Guild said. Maybe the gun market is different than these other collectible markets and closer to the collectible knife market and maybe indeed, it is not the high end of the gun market that is hot, but rather the lower end of the collectible market and that turns out to be teh same thing for knives. I don't know about that, but welcome any insight that you or others are willing to share about that.

I am the first to admit that my perspective is limited. But what I see from that limited perspective are a lot of lower priced and more commonplace knives on purveyor sites for what seems like forever, and I see a lot of lower priced knives being offered by makers here and elsewhere . . . that do not appear to move, or if they do, it is slow. I also see a few super-rare pieces pop up and disappear as soon as they show up. I cannot remember the last time I saw anyone offering to sell a Steinau knife. It seems to me that few Loerchners or Walkers are offered and the prices on those have seemingly gone through the roof. Quality Steigerwalt knives . . . hard for me to find, especially at prices that are not significantly more than just a few years ago. Maybe easier for you. I certainly do not see prices on desirable Moran, Loveless and Warenski knives declining. Do you think the values of Jim Schmidt's knives are declining?

As always, I would love to improve the quality of my perspective based on factual observations from those with better views.

And some may argue there's no pure, un-pure, good or bad way to collect, only the method that brings the individual collector the most enjoyment and/or satisfaction.

It was a linguistic comment - "pure" linguistically.

I do not see a definitional meaning for "collect" that involves "purvey," "speculate," "invest," or "flip." It seems that when one's activities mix in those elements together with "gathering"/"accumulating" then one creates an admixture of "collect" in a similar way that one adding copper and/or silver to .999 fine gold creates 14K gold. 14K gold is certainly less pure than 0.999 fine gold. Of course that does not mean that 14K gold is "good" or "bad" (to use your words). It is just less pure gold than .999 fine gold.

But I guess folks are free to use words any way they want, right?

 

[Kohai999]

Knives are small. I am thinking I would need way more than 1000 before I ran out of room. Then time to buy a bigger house.

I'm close to that, and don't need a bigger house, but all of the knives get stored in Bill's Custom Cases, and that is what takes up room.

I am not sure what particular lessons I am supposed to draw from gun shows about the knife collecting market that would contradict what Don Guild said. Maybe the gun market is different than these other collectible markets and closer to the collectible knife market and maybe indeed, it is not the high end of the gun market that is hot, but rather the lower end of the collectible market and that turns out to be teh same thing for knives. I don't know about that, but welcome any insight that you or others are willing to share about that.

I am the first to admit that my perspective is limited. But what I see from that limited perspective are a lot of lower priced and more commonplace knives on purveyor sites for what seems like forever, and I see a lot of lower priced knives being offered by makers here and elsewhere . . . that do not appear to move, or if they do, it is slow. I also see a few super-rare pieces pop up and disappear as soon as they show up. I cannot remember the last time I saw anyone offering to sell a Steinau knife. It seems to me that few Loerchners or Walkers are offered and the prices on those have seemingly gone through the roof. Quality Steigerwalt knives . . . hard for me to find, especially at prices that are not significantly more than just a few years ago. Maybe easier for you. I certainly do not see prices on desirable Moran, Loveless and Warenski knives declining. Do you think the values of Jim Schmidt's knives are declining?

My point is that as far as "low end" custom knives go....they move, and they move quickly.....and as ALWAYS it is piece, maker, price....I have been to one gun show this year, and the one true custom knifemaker there(Barry Dawson) was killing it, and these are quite moderately priced pieces. At the two shows that I have attended this year(The Gathering, and Plaza Custom)...ALL of the knives were moving pretty well, but the emphasis was on low to medium priced points. The purveyors there were not killing it, save for EDC Knives which seemed to be having a great show. I see more of a paradigm shift with the weight going to the tactical market, and everything that I have seen bears that out.

It is the aftermarket where things do get muddy....and that I will admit, but it may be a balancing of inventory and distribution channel shifts(makers go direct with e-mails, have lotteries, mini-shows....) that may squeeze some purveyors out of readily moving product.

Best Regards,

STeven Garsson

 

[jdm61]

STeven, might it be accurate to say that in the real "low end" of customs involving new/unknown makers, it can sometimes be piece, PRICE, maker and then the maker and price factors swap places once price gets to a certain level?

 

[The Amazing Virginian]

I'm close to that, and don't need a bigger house, but all of the knives get stored in Bill's Custom Cases, and that is what takes up room.


My point is that as far as "low end" custom knives go....they move, and they move quickly.....and as ALWAYS it is piece, maker, price....I have been to one gun show this year, and the one true custom knifemaker there(Barry Dawson) was killing it, and these are quite moderately priced pieces. At the two shows that I have attended this year(The Gathering, and Plaza Custom)...ALL of the knives were moving pretty well, but the emphasis was on low to medium priced points. The purveyors there were not killing it, save for EDC Knives which seemed to be having a great show. I see more of a paradigm shift with the weight going to the tactical market, and everything that I have seen bears that out.

It is the aftermarket where things do get muddy....and that I will admit, but it may be a balancing of inventory and distribution channel shifts(makers go direct with e-mails, have lotteries, mini-shows....) that may squeeze some purveyors out of readily moving product.

Best Regards,

STeven Garsson

Thanks for your informative and thoughtful post.

I think you might be onto something about high end gun shows. It might benefit more makers to consider attending these shows IF they bring the right knives for that market.

As far as the market shift to tactical knives, I'm sure you are better than me at distinguishing long-term market shifts from changes in "what's hot," because we can all scan through this thread and see the warnings about buying "what's hot." Regardless, tactical knives generally bore me to tears and I have absolutely zero interest in collecting them. So I guess I probably don't even factor those knives into these kinds of discussions, which is wrong. I don't even look at those knives, so i guess they could be selling gangbusters and I might not realize it.

Anyway, I wish I could believe that more money chasing tactical knives would mean less money chasing the kinds of knives I seek to collect . . . but I am thinking it probably does not work that way.