The Blade Show-A LOT of Overpriced Customs

Hi Wulf,

I love this: "A guy who pays $500 for a knife and sells it immediately thereafter for $1200 is an arbitrageur. He has not made an investment, per se,"

It is the "per se" part. Its like being pregnant, you can't be pregnant "per se".

What do you guys have against using custom knives as investments. Wulf has to come up with arbitrage (per se) (** Additional note: Arbitrage is actually the simultaneous purchase and sale of the same or similar "SECURITY" in order to profit. A security is a stock, bond, SPDR, EFT, etc. Not a custom knife).

Now you may know someone who may pay you double for a knife if you can get it. But this probably does not happen simulataneously. Sorry Wulf, Investment is : "The outlay of money for income or profit". You buy the Carson for $500 (outlay of money) you sell the Carson for $1100 (profit) you have by Mr. Webster's definition an INVESTMENT.

Item next:

If the collection was put together before the collector became a dealer: He is not "conveniently ignoring all the business earnings he has locked into that collection." Why? Because there were no business earnings during the time frame when he was a collector. Now you may want to build in travel expenses, shipping costs, phone calls, etc. Then again, the collector could have began a new "Sole Proprietorship" with the specific intention of utilizing the tax code to eliminate at least some of the "expenses" by showing a loss on his 1040, realizing that he could do this for three years with no consequenses. I realize that it would take a person of extremly high intellect to understand and utilize the US Tax Code to their advantage. Is there a word for a person who can expense a cost simulataneously? Sort of a business/tax code arbitrage? Just think, all of this before the MBA!


Item Last:

From Wulf: "The percentage of knifemakers whose work continues to increase in value years after they have sold their last knife is probably in the single digits." QUESTION: Why do you think this is so low?


From Wulf: "So a knife "investor" can feel pretty smart two years after buying a knife and seeing its value increase 50%, but ask him again how smart he is ten years after that maker has exited the market.

As I stated earlier the investor has done their homework. They are aware of the ebbs and flows of the market and have set pre-determined values as to when to divest themselves of their investment. This may be short term (as you stated 2 years) if in fact a 50% increas has occured it is up to the investor to determine if that investment has reached it's full potenital and sell it or hang on to it longer. Remember the saying on Wall Street "Bulls make money, Bears make money....but Pigs get slaughtered."

Wulf, additionally don't forget to throw the Time Value of Money into this equation (Joss knows what I am talking about). Perhaps it is better to sell sooner than later take a 35% ROI instead of a 50% ROI. As an opportunity may have presented itself to make an even greater ROI than 50%...if you have the money to invest right now. As you pointed out Wulf....TIMING!

Guys what I am suggesting with regards to custom knives is not easy, it is time consuming and requires an effort on your part.

WWG
 
I'm not interested in getting into the theoretical principles of investing.

However, as far as custom knives are concerned, one of the risks that I think needs to be addressed by any collector who is trying to long-term invest in knives is "what is the future value of a now popular knifemaker's knives going to be a year or two or three after he quits making knives or kicks the bucket?"

In other words, is his current popularity strong enough to keep his name alive and marketable in the knife industry after he stops making knives or dies?

Loveless and Lake are the obvious ones for me. I think they will hold their liquidity value, and I own none of either maker.:eek:

But, what about our favorite makers? Where will their names be in the market place and how easy is it going to be to liquidate their knives, say, two or three years after they die? (For those thinking of passing these "investments" down to kids or grandkids).
 
Guys,

RWS brings up an excellent point:

"However, as far as custom knives are concerned, one of the risks that I think needs to be addressed by any collector who is trying to long-term invest in knives is "what is the future value of a now popular knifemaker's knives going to be a year or two or three after he quits making knives or kicks the bucket?"

The future of a popular knife maker is completely determined by that maker. If they continue to do what made them popular, they will continue to add collectors.

If they stop doing shows, don't udate their web sites, don't advertise, etc. They will fade into obscurity.

Bill Moran in spite of his health problems, in spite of his wife dying, in spite of having numerous excuses. He continued to do shows, I had dinner with him 3 years ago at a show in NC. He was very active in the ABS. Without a doubt the best known ABS Master Smith in the WORLD and he continued to do shows and participate in ABS Functions...to include hosting a Hammer-In.

His knives continued to go up in value while he was alive and now will most certainly go up in value.

If you have makers who do not actively participate in custom knives, they will not be good long term investments.

WWG
 
RWS said:
But, what about our favorite makers? Where will their name be in the market place and how easy is it going to be to liquidate their knives, say, two or three years after they pass (For those thinking of passing these "investments" down to kids or grandkids).
Click to expand...

Take a look at what Harvey McBurnette knives are selling for.

Also, Frank Richtig(sp?) and Floyd Nichols. Most of you guys are scratching your heads at mention of these names, but Mr. Lombardo had better know who they are.

There is short term, as we recognize the term, and long term as we are accepting in here, but there is true long term, ie, 10 years + that can give you an idea of where a maker is in the schema.

It all goes back to overpriced/QPR/value. I for one can't fathom the prices that antique bowies are bringing in, let alone Scagel knives, I leave that to those far more educated/well heeled than I am. Does anyone remember the BARBEQUE FORK that Nordic had by Scagel for like $3,000? That blew my mind.

Best Regards,

STeven Garsson
 
im not the sharpest knife in the drawer so what i have to say may be wrong and if it is please be kind as you inform me of my mistakes.
i believe if you buy any item to keep you should like that item a lot . you are swapping a hard earned item ( money) for it. while you fondle it, look at it, sleep with it, chop with it , brag about it, be happy and when you become tired or outgrow it try and sell it for your money back or a little profit. now my point is i spent a lot of years buying and selling items for resale. there is noting sadder than a auction of loved items unless it is being asked by a spouse to buy his/her mates treasured items and watching there eyes as you tell them what they have is not worth what there loved one told them it was.somtimes it is worth more but most times a lot less.save your loved ones this if you can.list what you gave for an item and do not tell your loved one it is worth 3 times that amt. now, because when you are gone it may be worth a lot less.

you want to call what you do investing or collecting or just plain ole horse trading , the end results are the same in any item , you are putting your knowledge, judgement and reasoning ability against others and backing your skills with money.
my .02 worth.
david
 
WWG,
I did not mean to offend your sensibilities, but meant only to make a distinction between exploiting market inefficiencies and realizing gains on the market value of one's knives. They are two distinctly unique means of earning profits on transactions. And yes, it is indeed arbitrage when a person buys a knife from a maker for $500 and five minutes later sells it to a dealer two rows down for $1200. Arbitrage is indeed an investment strategy, but certainly not a long-term one. And if someone wants to arb the knife market all day long, he runs the risk of having some anonymous dealer on a knife forum accuse him of being a dealer himself ;)

Also, perhaps I misinterpreted your previous comments, where you said:
"I bought four or five knives from a paticular maker. Sold 4 off at opportune times making enough money on the 4 to cover the cost of all 5. Consequently, I could give the 5th knife away and still have made money on it...Imagine having a collection valued at over $50,000 and having less than $5,000 invested in it."

In those calculations cited above, I assumed (wrongly, it seems), that the $5,000 figure was net of gains realized on prior transactions. If, on the other hand, you earned profits on your prior transactions and independently made an additional 900% profit on the other $5,000 you invested, then my hat's off to you, sir.
 
David - what you say is true and interesting, but it would be much easier to read if you followed the usual rules of capitalization, punctuation, and spacing. I for one find those posts disrespectful of the reader.
 
Kieth-- It is too bad that you interpreted my last post as an insult to Don. The people who are lucky enough to know Don Fogg personally also know what he has been going through the last few years. My point to wwg was that he does not know Don because wwg does not see development of this relationship to be profitable. I asked for an apology for those who consider him friend, mentor, and master of this craft. To compare it with the Aids crisis in Africa just further explains WWG's ignorance.

Joss-- maybe you are correct WWG was not trying to insust Don, the insult was directly aimed at you. BTW; Does anyone remember when Don received the lifetime achievement award by Krause at last years blade show? Well he was there and drove home immediatly afterwards.

Dirty
 
WWG cannot insult me, and more to the point I don't think he was trying to.
 
Sanchez,

If you going to continue to post how about Naming names of the Dealers I asked you about previously. If not please refrain from posting until you can resolve your hypocrisy.

My comments regarding Don and/or Joss were not insulting nor were they written with that tone. Joss is what is known in the the book the "Tipping Point" a "Connector". He is viewed as an expert on Don Fogg's knives by those on this forum. As such what Joss says is taken at face value by those who read his comments. Regardless if they are thinking of purchasing a Don Fogg knife.

In the book the Anatomy of the Buzz it lists one of the reasons that we talk is to reduce risk, cost and uncertainty. This thread obviously fits that bill. So we have forumites reading this and are taking everything Joss has to say about Don to heart.

This is why I posed the questions (with stricly an investment slant) what if Joss stopped talking about Don? What would happen if Joss started selling off Don's work? As he is veiwed as an expert on Don's work this would have at least a short term impact on Don's work. Possibly long term.

It was not a slap or negative comment at Don or Joss. Just showing variables that would have to be considered by an INVESTOR.

I realize that my use of capitals and other gramatical erros offend some. Guys, get over it. I write the way I do to draw your eye (if not your brain) to what I have written. I borrow some of my stylized writing from Tom Peters (Joss Im sure you know who that is).

Lastly, if you read my post completely you would see that I gave Don all kinds of credit for being a top Master Smith. One more thing. Sanchez I was buying Don Fogg knives starting in 1991 (15 years ago) were you even making knives then? Did you even know who Don Fogg was then? As you are a JS the answer to both is probably no. THen again perhaps you did.

WWG
 
Wulf said:
Also, perhaps I misinterpreted your previous comments, where you said:
"I bought four or five knives from a paticular maker. Sold 4 off at opportune times making enough money on the 4 to cover the cost of all 5. Consequently, I could give the 5th knife away and still have made money on it...Imagine having a collection valued at over $50,000 and having less than $5,000 invested in it."

In those calculations cited above, I assumed (wrongly, it seems), that the $5,000 figure was net of gains realized on prior transactions. If, on the other hand, you earned profits on your prior transactions and independently made an additional 900% profit on the other $5,000 you invested, then my hat's off to you, sir.
Click to expand...

i also am curious about this. les suggests that he has achieved a $50k collection with an investment of $5k. by the way he phrased the statement he suggests that he has made a "profit" of $45k. he does not say over what time period that was achieved though

i always look at long term track records before i invest...and i am curious to see if les will provide real evidence to back up his claims. i like to look at 5 or 10 year track records

i would really like to know if les has ever had a client make $45k off of a knife deal..or even $25k.

if that can not be done , i would even like to know if he has any clients who have made at least $10k/yr for the last 5 years off of their knife investments. by $10k profits... i mean they sold their knife investments with a net gain of $10k cash.
 
Not sure I qualify as a tipping point. On those boards, maybe, but most serious collectors of Don's work are not here.

In fact his older pieces hardly ever surface, probably because they're held by collectors who don't care about the ROI (because if they did, now is the best time to sell in years - and I'm not only saying that because I'd be lining up to buy).
 
Sanchez,

Man you have difficulty grasping concepts.

First, I have no idea what is going on with Don. Neither you, nor Bobby or Joss have given any hints. Although you do seem to want to keep bringing it up.

My comparison with the aids problem in Africa was not about the Aids problem in Africa. My point was that most of us think we have problems. That is until you think about someone who really does have problem. Which was my comment about a 3 year old in Africa with Aids. Ok, here is another one, how about a 1 day old American baby who is born a crack addict.

Point is that none of these problems were because of something they did. Could you imagine starting life like this? Most of us who are adults and have problems are at least mature enough and intelligent enough to understand what is going on. As well we can comprehend the options and make intelligent informed decisions.

The fact that Don could drive over to the Blade Show last year to receive his well deserved award. Showed that he had things under control for at least those few hours. He also showed that he was very appreciative of the Honor from the Blade Show.

WWG
 
Sanchez said:
Kieth-- It is too bad that you interpreted my last post as an insult to Don.
Click to expand...

I did not interpret your comment as an insult to Don. What I gathered from your post was that you thought WWG had insulted Don.
 
Keep it coming guys. As long as we limit personal sniping our beloved moderators will keep it open. I see at least 10 new threads popping up from this one.

If you check this thread frequently, check the names out that are reading the thread. Some of the names will blow your mind. I wonder who some of the anonymous ones are?
 
HI Bandaid,

The collection I was writing about was put together over 5 years. As it is a collection it has not been sold. However, pieces could be liqudated virtually overnight at a substantial profit. Fortunately, the collector does not need to liquidate. However, shortly after he started putting the collection together "investment" and ROI did become a concern with regards to purchasing.

Regarding others who have bought and liquidated their invesments at a substantial profit that would be between them and their broker.

Bandaid, there are no easy answers, there are no investment trends to track. If you pay attention to this thread there are few if any who believe custom knives can actually be considered an investment, with the length of the term being of no concern.

It seems that most here want the easy way out and want a guarantee.

Bandaid, do you know of any investment vehicles prospectus that offers any kind of guaranteed ROI on their products. If you do let me know.

Les Robertson offers a guaranteed 10% return on your investment in custom knives. There it is. No more research, no more wondering and a guarantee.

You want a guaranteed ROI you now know where to go.

WWG
 
Hi Joss,

Of course you are part of the tipping point for some. That comes with being regarded as an expert.

On this forum the same holds true for:

Randy Morgan
Peter Gill
Stephen Foster
Anthony Lombardo
Roger Pinnock
Dan Unger

Yours and their opinons matter to those who come to these forums. Remember what it says in Anatomy of Buzz "we talk to reduce risk, cost and undertainty"

With over 11,000 views somebody is curious as to the information that is being discussed here.

FWIW I am not trying to "snip" at Joss or any one else here. Ok maybe Sanchez (just a little) :D

WWG
 
WoodWorkGhost said:
Les Robertson offers a guaranteed 10% return on your investment in custom knives. There it is. No more research, no more wondering and a guarantee.

WWG
Click to expand...

If that's an after tax return, where do I sign up? :D
 
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