The Blade Show-A LOT of Overpriced Customs

[Kohai999]

All this investment talk is wearing me out! Too much like work!

The main problem with making the leap from hobby to investment, is that the wife may get the idea that YOUR knife investments should be "redeployed" into new kitchen appliances or jewelry. No thanks.

Peter,

I think you are seriously fooling yourself if you don't think you "invest" in knives. It is work, that is fun, and you spend about 1/2 to 1/3 of almost everyday "working", in addition to having more than a pittance tied up into it.

Coop,

I have a friend who commissioned the King Tut Dagger. He likes Egyptian stuff, and somehow convinced Buster Warenski to make the thing for him. He had Kruggerands, and this got turned into the knife. He had this thing made because it had never been done before, and he felt compelled to do it. If he did not realize a substantial profit on it, that was not really the point.

I predict that this piece would bring somewhere in the realm of $200,000+/-, if sold at auction. This is an educated guess, but just a guess.

Somewhere in the deep South, some guy is probably sitting on $100,000 worth of Case knives handed down by his grandpappy.

No one ever exactly knows when garbage becomes gold, but it does. I would say if you like Pearce Hill knives, more power to you, and I hope someone else wants to buy them from you, for at least what you have into them, when it comes time to send your little one to college, buy a new house, or when you are very old, and no longer have use for them.

As far as supporting the craft, I'm not sure I agree. It is important not to let the "people person" part of someone's sales ability obscure that they may be making a knife of "questionable" quality( ie. poor fit/finish, bad blade-to-handle ratio, wavy grinds....). I would say support the RIGHT people in the craft. You and I disagree strongly about D.R., for example. Maybe you are right, but I highly doubt that one.

Best Regards,

STeven Garsson

 

[ptgdvc]

Peter,

I think you are seriously fooling yourself if you don't think you "invest" in knives. It is work, that is fun, and you spend about 1/2 to 1/3 of almost everyday "working", in addition to having more than a pittance tied up into it.

Best Regards,

STeven Garsson

You Sir, are of course correct, but please permit me my illusions and delusions.

Best,

Peter

 

[Megalobyte]

Well, even though I never seem to make anybody's list, I'll respond anyway. :thumbup:

Ultimately, I am attracted to the quality and beauty of the knife, and by that I mean the workmanship, design, and materials used, value is nice, but, if it means I have to sacrifice even a little quality to get a "deal", I would rather save my money for what I believe is the higher quality knife. Not to say there aren't very good makers offering good value, Bailey comes to mind, Jason Knight, Burt Foster, as do several others, however, take the work of another Don, Don Hanson, his bowies (and forged folders) just do it for me like few if any others, his bowies embody everything that I love about knives, and while they aren't inexpensive compared to some, in my view, and to me, they are well worth it, and when I really think about it, they are therefore a good value, just because a knife may cost more than others, and isn't instantly flippable for an 800% ROI, does not neccessarily mean it's not a good value, and for me, here's why.

As primarily a collector, a great knife that I truly cherish, that I am fairly sure I can get my money back out of if necessary at some later point, is a very good value, because the way it makes me feel is priceless. I will pay more for exceptional quality and an exceptional knife, but I won't lower my standards and expectations to get a great deal, the trick is I suppose to find knives of exceptional quality that are also cheap, but they so rarely are, and I'm Ok with that, the really good things in life are generally difficult to get.

I'm not in this hobby to make money, if I was, I couldn't afford this hobby , like others, I try to buy what I think is a very high quality knife, at a fair price, and so far, I have not lost any money as I have bought, sold and traded my way into my current collection, which I'm pretty pleased with, [burning resentment HTML] though I obviously have a ways to go to make the "lists". [/burning resentment HTML]

As for Don Fogg, his work remains at the top of my list for future purchases. And again, yes, his knives are not cheap, but I still want them, and I'm fairly certain if and when the time comes to sell them, I won't lose any money, and that's fine with me, I'm just a collector, not an investor or dealer. Do I hope to find a Picasso at a garage sale, of course, who doesn't, but it doesn't make me anything more than a knife collector and enthusiast. Seems to me, you sort of need to make a decision whether you are in it for money, or the knives, I think the more you move in one direction, you move away from the other. Very tough for a crack addict to successfully sell crack for a living.

Oh, just to qualify myself, I don't have a masters degree, and I don't even know which companies are in the Fortune 500, I do like fortune cookies though, in fact, just the other day at a chinese buffet, I got one that told me to buy more TnT's...

And I'm sorry, but I just have to ask the question, has anybody seen WWG and Clark Kent in the same place at the same time?

 

[Kohai999]

Ok example. I had a client who got drawn for an Onion ($800) and two Boguszewski's (2,000) at the Art Knife Invitational. He sold all three before he left the room for $7,800. The next day he got drawn for another Onion ($800) sold it for $3,200. His purchase price was $3,600 and he sold those knives for $11,000. A profit of $7400 in less than 24 hours. A total ROI of about 250%.

WWG

PLEASE, a correction! This is not the Art Knife invitational, which is held in San Diego every two years, and promoted by Phil Lobred, featuring 25 highly regarded ART KNIFE makers.

This was the Tactical Knife Invitational held EVERY year in Las Vegas, by Ed Wormser(of the Chicago Knife Show) and Dave Ellis(of Exquisite Knives) and features about 9-10 highly regarded TACTICAL knifemakers.

About as opposite of the knife spectrum as you can have. Think Bentley vs. Range Rover.

Best Regards,

STeven Garson

 

[Les Robertson]

Hi Megalobyte:

Quote: "And I'm sorry, but I just have to ask the question, has anybody seen WWG and Clark Kent in the same place at the same time?"


You just made the "list"

WWG
No Longer Investing in Custom Knives:thumbdn:

 

[Les Robertson]

Hi STeven,

YOu are of course correct. It appears I got my Invitationals confused. It was Ed and Dave's show in Las Vegas earlier this year.

WWG
No Longer recommending any custom knife as an investment. :thumbdn:

 

[Megalobyte]

Hi Megalobyte:

Quote: "And I'm sorry, but I just have to ask the question, has anybody seen WWG and Clark Kent in the same place at the same time?"


You just made the "list"

WWG
No Longer Investing in Custom Knives:thumbdn:

Hmmmm, I have a feeling it's not the list I was after...

 

[Joss]

WWG
No Longer recommending any custom knife as an investment. :thumbdn:

Is that tongue in cheek? If not, could you expound?

 

[Megalobyte]

Is that tongue in cheek? If not, could you expound?

My guess is that WWG feels as if he is banging his head against the wall at this point, tiring of the argument, and his statement is both a reflection of this and sarcasm. I would be very surprised if his feelings on this subject have changed.

 

[Wulf]

I had a client who got drawn for an Onion ($800) and two Boguszewski's (2,000) at the Art Knife Invitational. He sold all three before he left the room for $7,800. The next day he got drawn for another Onion ($800) sold it for $3,200. His purchase price was $3,600 and he sold those knives for $11,000. A profit of $7400 in less than 24 hours. A total ROI of about 250%.

Again, this is just a guy exploiting market inefficiencies. Classic arbitrage. Too bad he literally had to win the lottery to pull it off. That's not to say he didn't make good money doing it, but that sure takes a lot of the fun out of it. He got to own, handle, and admire a few really great knives for all of five minutes.

See, some people look at a maker and his work and all they see is dollar signs. I guess you call these people investors. Nothing wrong with that, and they play an important role in the world of handmade knives, but let's at least be honest about it.

Now others - the patrons, if you will - they look at a maker and his work and they see a craftsman and his art. The return on their investment - their ROI - is measured not only by the increase in monetary value of their collection, but by the genuine satisfaction they receive by owning the knives, sharing their enthusiasm with others, and supporting the makers and artists that make it possible.

The Stag handled Skinner you bought for $350 would today be selling for around $1,500. Your ROI would be right at 325% (over 10 years) you would have had a average annual ROI for 32.5%. Even adjusting for inflation you would have seen a return over 26%.

Just a minor point of clarification here - you ignored the effect of compounding (could've sworn they teach that in those fancy MBA programs ) - your actual annualized ROI is 15.7%. A great return, for sure, but not quite 32.5% either.

Just thought I'd clear that up.

Now which example of a US Treasury are you going to show me will give you 26% return.

If you bought a 30yr Treasury on June 30, 2004, you'd have paid 101-7/32. If you sold it a year later, after interest rates fell and it was trading at 118-15/32, you'd have made 22% (including interest). You could have done it with $100 million if you wanted, you wouldn't have had to win any lotteries, and you wouldn't have had to worry about the creditworthiness of a certain knife dealer. Speaking of the creditworthiness of sole proprietors, junk bonds - publicly traded debt regulated by the SEC and rated by nationally recognized rating agencies - pay much higher interest than Treasuries.

That's investing.

But I digress... The point is, you can make money off knives, and if you make profits a high priority in your collecting, do a lot of "homework," flip a lot of knives and maybe get a little lucky once in a while, you can make some decent profits on a fairly regular basis. That said, don't be a knucklehead and put all your retirement savings into collectibles unless you're comfortable with the possibility of having to live off social security in your final years.

 

[Les Robertson]

Hi Wulf,

Back with the arbitrage again. LOL Perhaps you missed the definition by Mr. Webster of what an investment is.

What did you "compound" to come up with ROI?

Ok Wulf, so investing is only an investment if a short period of time passes. Exactly what is the time frame for an arbitrage to an investment? Please be specific with your time table.

Some guys just don't want to make money.

WWG
Formerly purchased custom knives for investment purposes. But now will only purchase knives I can arbitrage. But using the definition from Webster an arbitrage is an investment. Never mind...Don't buy custom knives.:thumbdn:

 

[Les Robertson]

Hi Meglobyte,

You made the Knowledgeable Collector List. As with Kohai I apologize for this error of leaving you off the list.

WWG
Formerly an investigator now an arbitrager (sp?). No longer investing in any custom knife I can't arbitrage. Wait, sorry an arbitrage is not an investment. Even though in the Webster dictionary.....never mind. Don't invest or arbitrage in any custom knife. :thumbdn:

 

[Kohai999]

But I digress... The point is, you can make money off knives, and if you make profits a high priority in your collecting, do a lot of "homework," flip a lot of knives and maybe get a little lucky once in a while, you can make some decent profits on a fairly regular basis. That said, don't be a knucklehead and put all your retirement savings into collectibles unless you're comfortable with the possibility of having to live off social security in your final years.

I would say that is a very, very valid statement, just about summing up the "investment" element of knife collecting.

It has always been important for "investors" to have a fairly widespread and diverse portfolio. Stocks, bonds, mutual funds....these all have their place in the portfolio. Gold has recently shown to be a good investment, AFAIK. Real estate in SoCal was a good investment, I am not sure that it still is.

Collecting knives is fun, and you can make money at it, if you know what you are doing. If you turn out to be a miserable failure at it, you can use your "investment" to slit your own wrists, thusly ending your misery. With stocks and bonds, you just wind up with paper cuts, ouch!

Best Regards,

STeven Garsson

 

[Les Robertson]

Hi Wulf,

Just re-read your last post. It is good to know that I am not a knucklehead. As I have several different investments. My point is that if you are going to buy custom knives you might as well buy ones that have a chance of holding their value or even going up.

I have never suggested that investing in custom knives should replace a good IRA/401K/other "Real" investment vehichles.

WWG
Selling off his custom knives to invest in T-Bills and I-Bonds. Do not buy custom knives for investment purposes, no one ever has made any money on the knives they sell. :thumbdn:

 

[Les Robertson]

Hi STeven,

Quote:

"Collecting knives is fun, and you can make money at it, if you know what you are doing. If you turn out to be a miserable failure at it, you can use your "investment" to slit your own wrists, thusly ending your misery. With stocks and bonds, you just wind up with paper cuts, ouch!"

Excellent!

WWG
Now viewing his formerly lucrative custom knife collection as a "Final Solution".
Don't buy custom knives. Don't let makers and dealers steal your childrens college education!:thumbdn:

 

[RWS]

Don't let makers and dealers steal your childrens college education!:thumbdn:

Too late!

College is way overrated anyway!

 

[RogerP]

... My point is that if you are going to buy custom knives you might as well buy ones that have a chance of holding their value or even going up....

Can I get an "Amen!" for that one? I don't care what label you want to hang on it, this just makes sense.

Roger

 

[samhell]

Originally Posted by WoodWorkGhost
... My point is that if you are going to buy custom knives you might as well buy ones that have a chance of holding their value or even going up....

Can I get an "Amen!" for that one? I don't care what label you want to hang on it, this just makes sense.

Roger

Totally agree! I'm not planning on retiring on my knives but I don't really care to lose money on the deal.

 

[J A Martin]

I can see WWG points. Does this humor also apply to makers? Why make knives at all as there are better jobs out there that pay more money with better benefits.

 

[Bladeandbarrel]

Why make knives at all as there are better jobs out there that pay more money with better benefits.

Thats a great point, even if it was in jest. I don't think the present market can honestly support the number of "full time" knifemakers currently out there. Maybe the economy has spurred an increase in folks who were laid off, pissed off or whatever and decided to try their hand in the knife business. I am just not sure.