Knife Collecting as an Investment

[John T Wylie Jr.]

In the beginning of my knife hobby I though the makers treated everyone the same and gave everyone the same opportunity to get one of their knives. How naive I was. A lot of makers start out like that but once they catch on they don't want to deal with the average hobbyist and only with people who they think can help them. Not all makers are like that, but quite a few are. I avoid those makers and will never kiss their ass to get one of their knives or will I overpay for one on the secondary market.

I agree with that 100% , and feel the same exact way. 2thumbs

I placed an order for one over 7 years ago , after being told 3-6 months delivery time , still haven't seen it , and doubt I ever will , although others have received theirs. (and yes I was in constant contact with the maker , just after 3 years of broken promises , I pretty much gave up trying ).

 

[Kevin Jones]

Hi Clydetz,

Part of investing is to know when to sell. Long term is not always the best route to go...to many variables.

Everyone points to Loveless knives....they forget it wasn't until Loveless knives had been around for almost 40 years before they really took off.

Now, the slippage has begun in the after market...and will continue to do so except for those who have a knife actually made by Loveless.

This is why investing requires a different skill set than just collecting.

We seem to pretty much agree when it comes to investing in custom knives however not on your bolded statement above.

I have put A LOT of hours into studying the Loveless market over the last three years or so. One, because I've been interested in investing in a piece for my collection and two because the Loveless market has always fascinated me. Though having said the above I'm certainly no expert.

I have found and have been told by experts that the Loveless market is down by perhaps 15% over the last 18 months.
I don't see this as a continuing slippage as you suggest but rather a positive correction brought on by two large collections being liquidated (in similar fashion to how I addressed in an earlier post) and the poorest economy in recent history. Let's face it, a horrible economy is going to hurt the market for knives which typically sell in the access of $10,000. Actually, I'm quite amazed that the Loveless market has held up so well. Though some collectibles do fairly well in a down economy.

I've noticed models which were bringing around $11,000 just six months ago now moving in the $12,000-$12,500 range. The piece I purchased not quite 7 months ago would already bring a substantial profit.

Actually, I fine the people in the know on Loveless knives to be pretty upbeat as to their future investment potential regardless of who made them.

 

[The Tourist]

I ordered a handmade knife in December of 1996 and did not receive it until May of 2006. Just shy of ten years waiting.

 

[Kevin Jones]

I ordered a handmade knife in December of 1996 and did not receive it until May of 2006. Just shy of ten years waiting.

WoW!
That's got to be a record.

I waited 4 1/2 years for a knife, picked it up at a show and it was stolen the very next day.

 

[The Tourist]

I waited 4 1/2 years for a knife, picked it up at a show and it was stolen the very next day.

Gee, if you tell me what kind of a knife it was, perhaps mine is the same style! If that is the dumb luck here, perhaps you can find a knife, I can sell a knife--but more to the point, I don't have to look at it anymore!

 

[Kevin Jones]

Gee, if you tell me what kind of a knife it was, perhaps mine is the same style! If that is the dumb luck here, perhaps you can find a knife, I can sell a knife--but more to the point, I don't have to look at it anymore!

It was a Jay Hendrickson Hunter that was taken out of my luggage on my return home from the Reno ABS show.
Jay being the outstanding fellow he is immediately went to work making me another.
But instead of making me another hunter, he made me a Bowie so in the event the hunter was recovered I would have set rather than two of the same.
Plus Collectibles Insurance Services paid off at full value in 30 days to the day of my reporting the claim. http://www.collectinsure.com/cost.html If you have ever considered insuring your knife or gun collection they are good people. CIS also participates in the CKCA member discount program.

 

[The Tourist]

Kevin, strange as it may seem, I have little if any emotional attachment to this knife, which troubles me. I had wanted this knife so dearly, and during the wait it became a topic of derisive comments, anger and then finally the butt end of shaggie-dog stories.

If a client walked in with enough hundred dollar bills I'd hand him the knife like I was surrendering a shoehorn.

 

[Les Robertson]

Hi Kevin,

The Loveless market will continue to slide.

A couple of reasons.

More and more people are finding out that Loveless has not made his knives for the last 25 years. Yes, you would be amazed at how many people don't know that.

Most people in "the know" previous to my posts letting people know that Loveless doesn't make his knives....were not forthcoming with that little tidbit of information.

The economic down turn hit the majority of the custom knife markets...specifically the after market. It isn't just Loveless knives that have been sliding it is most custom knives in general...that hard large Premiums attached to them.

Consequently, collectors for the next several years are not going to be too keen on paying high premiums for a knife.

The next big "secret" to come out on Loveless knives is how many are being re-handled. Both with Stag and Ivory. The majority of Loveless knives were built with micarta.

But then again if the people in the "know" don't care if Loveless built the knife or not...they won't care if yet another person not named Loveless worked on the knife.

Those in the "know" who are telling you that the Loveless Market is OK. Are the same people who have Tens of Thousands of Dollars tied up in Loveless knives...do you really think they would tell you if things were bad?

As you said previously...they would sell off their Loveless knives before people even knew they were gone.

When Bob dies (which is what those in the "know" are now waiting for), the market will be flooded with Loveless knives. Yes the rare and unusual Loveless's will command a hefty premium.

But the simple hunter in Stag or Micarta....the price will drop. Why? Because everyone and their mother will be trying to cash in with their Loveless.

Remember someone has been making Loveless knives for over 55 years!

What if they bring in someone to replace Jim and they continue to make Loveless knives? This is not outside the realm of possibility.

Within 18 months of his death people are going to want some kind of provenance (receipt, letter, etc.) along with the knife to get the really big money.

As with Jimmy Lile knives....his knives sold very well until the general knife buying public found out what the "Dot" over the "I" represented. The Lile Knife company went out of business.

News of this initiated a spurt in Lile sales. But like everyone else after 18 months things slowed down.

knives with a dot over the "i"...couldn't get out of them what you paid. Hollow Handle knives did and continue to do well (especially the Rambo Serial Numbered ones...then again there are only 200 of those in the world).

Right now you can go to shows and see "dealers' with 50 or more Lile's for sale...same ones that they have had for several years.

The fact that you got your Loveless at a good price should be an indication to you that the market for Loveless knives is not what people in the "know" pro port it to be. If it was...why would you have gotten a "good price" on it.
In a very strong market...the price is the price!

As for it being worth more today than when you bought it...only one way to find out...that would be to sell it. But with the slippage...........

Best to wait for that 12 -18 month period after he dies.

 

[Larry B.]

After that read it just amplifies my distrust of the big players in this hobby. Thx Les for that bit of info, I would of never guessed.
Knife investing is definitely not a place for the novice, that's for sure.

 

[The Tourist]

I believe this 'slide' is in cutlery across the board, except for imported Japanese kitchen knives--and even that statement has some mighty big holes in it.

I spoke to Mike Crenshaw (he is "hso" on THR), and he felt that 'collectibles' in general have lost their value by 50% on average.

Speaking as a former credit manager, the inflated price was simply "paper profits" and most people have actually gained some real value.

For example, let's say I buy a knife from a custom cutler here for 100 bucks, for easy figuring. The next day he becomes nationally famous and that same knife skyrockets to 1,000 dollars. The third day the Stock Market crashes and now his knives are sold for 500 dollars.

I know lots of folks who lament that their investment has lost half of its value. In truth by this scenario, I have made 400 real dollars.

This really happened to me. I have an Emerson for which I paid 450 dollars. Just about the time of 9/11 I saw prices for this knife crescendo to almost $2K to a serious collector. If that price fell by half, I'm still up 550 to the black.

There's a expression, "the wisdom of the markets." In other words, don't panic. And never let a panic bear market dictate the true value of a product you want or need. "Money" is not "wealth."

 

[Kevin Jones]

Hi Kevin,

The Loveless market will continue to slide.

A couple of reasons.

More and more people are finding out that Loveless has not made his knives for the last 25 years. Yes, you would be amazed at how many people don't know that.

Most people in "the know" previous to my posts letting people know that Loveless doesn't make his knives....were not forthcoming with that little tidbit of information.

The economic down turn hit the majority of the custom knife markets...specifically the after market. It isn't just Loveless knives that have been sliding it is most custom knives in general...that hard large Premiums attached to them.

Consequently, collectors for the next several years are not going to be too keen on paying high premiums for a knife.

The next big "secret" to come out on Loveless knives is how many are being re-handled. Both with Stag and Ivory. The majority of Loveless knives were built with micarta.

But then again if the people in the "know" don't care if Loveless built the knife or not...they won't care if yet another person not named Loveless worked on the knife.

Those in the "know" who are telling you that the Loveless Market is OK. Are the same people who have Tens of Thousands of Dollars tied up in Loveless knives...do you really think they would tell you if things were bad?

As you said previously...they would sell off their Loveless knives before people even knew they were gone.

When Bob dies (which is what those in the "know" are now waiting for), the market will be flooded with Loveless knives. Yes the rare and unusual Loveless's will command a hefty premium.

But the simple hunter in Stag or Micarta....the price will drop. Why? Because everyone and their mother will be trying to cash in with their Loveless.

Remember someone has been making Loveless knives for over 55 years!

What if they bring in someone to replace Jim and they continue to make Loveless knives? This is not outside the realm of possibility.

Within 18 months of his death people are going to want some kind of provenance (receipt, letter, etc.) along with the knife to get the really big money.

As with Jimmy Lile knives....his knives sold very well until the general knife buying public found out what the "Dot" over the "I" represented. The Lile Knife company went out of business.

News of this initiated a spurt in Lile sales. But like everyone else after 18 months things slowed down.

knives with a dot over the "i"...couldn't get out of them what you paid. Hollow Handle knives did and continue to do well (especially the Rambo Serial Numbered ones...then again there are only 200 of those in the world).

Right now you can go to shows and see "dealers' with 50 or more Lile's for sale...same ones that they have had for several years.

The fact that you got your Loveless at a good price should be an indication to you that the market for Loveless knives is not what people in the "know" pro port it to be. If it was...why would you have gotten a "good price" on it.
In a very strong market...the price is the price!

As for it being worth more today than when you bought it...only one way to find out...that would be to sell it. But with the slippage...........

Best to wait for that 12 -18 month period after he dies.

Les, I was going to shoot down your points one by one, however I think I would be waisting my time here in doing so.

I will just say that there's NO BIG SECRET that Jim has been making knives in the Loveless shop for years and Steve Johnson did before him. You act as though you broke some big story like you are Geraldo Rivera or something.

The people who are involved in the market have known for years and don't care.
Your Buddy, who just purchased a nice Dixon Fighter last week is typical of whose buying Loveless knives these days (the collector/investor whose been around, knows the players and knows his knives).

Get over it man. And no matter how much you talk about and wish for a Loveless demise, it's not going to happen.

In regard to my "Loveless New Orleans Special" Boot Knife, I could have already cashed-in, but will keep it for now.

 

[Larry B.]

I could never understand what made those Loveless knives cost so much in the first place. What am I missing?

 

[Kevin Jones]

I could never understand what made those Loveless knives cost so much in the first place. What am I missing?

I'm sure you're not alone Larry. I don't disagree that a maker should create the knives which bare his name. There's this mystique surrounding Loveless knives and I don't see it disappearing.

We need some die-hard Loveless collectors to enter into the discussion.

 

[tomwatson]

Man, is this a good and long thread. I feel like as a maker of knives for 32 years I should have some input here but I do not know exactly how to say what I am thinking. I think some makers try to put it to the buyers and then there are some makers who bend over backwards to give the buyer his best deal. My full time knifemaking career got derailed after being hit with a disease that is not going away and will just get worse. I still go to the shop everyday and try to turn out the best knife I can for the people who are willing to wait while I fight my demon to get it made. Sometimes I can only make one knife a month. But it will be the best knife I can make and hopefully it will be as perfect as it can be. And I still sell them at a bargain price for the craftmanship that is in the knife. I can build a linerlock for $425 that I have seen other makers sell for $1500. I used to think that I would be at the top one day and be very collectable. But this is no longer my desire. I do not build anything but very simple designs and this is most likely why I will never be collectable except by buyers who are looking for a heck of a EDC for a good price. I would rather sell my knives to dealers like Les, Phillip, and Lawrence than I had to some pain in the rear buyers that I have dealt with in the past. These guys will tell you if your work will sell or not and they are honest about it. They are only trying to help you get where you need to be. I owe knives to these guys right now, but they understand how my situation is. There are a few of my past customers who are loyal to me still and I appreciate that. From the collectors view you feel like you are in a wrestling match with the makers trying to get an honest and fair price for a good knife. From the makers view we are just trying to get an honest and fair price for a good knife. The debate goes on.

 

[James Terrio]

But then again if the people in the "know" don't care if Loveless built the knife or not...they won't care if yet another person not named Loveless worked on the knife.

If the collectible knife world is anything like the collectible guitar world, that situation will change... in a few years, maybe a couple decades. "Original" will count for much more in the long run. PRS guitars coming off the assembly line right now are arguably "better" than the ones Paul Reed Smith built himself back in the 70's, but they'll never appreciate to the same degree.

I was not aware that original Loveless knives are being re-handled with fancier materials... frankly, that boggles my mind and can only mean the people doing it are trying to cash in quick, in the short term. The people buying such knives today better get rid of them quick, because the inflated value won't last. On the other hand, by doing so, they're increasing the long-term value of un-retouched original Loveless pieces.

*sigh* all this is too complicated for a simple man like me. I don't mean to cast aspersions on anyone, but there is a seedy undercurrent to this stuff, when we start talking about things like "remodeling" original pieces and makers kicking buyers to the top of their production list depending on how many pieces they order and why they're buying them.

 

[James Terrio]

Man, my brain is still reeling from this idea of original Loveless knives being re-handled. Can you document that? I'm not doubting you, it just seems so bizzare I can't wrap my head around it. That would be like me taking a '57 Les Paul and putting new locking tuners or a Floyd Rose bridge on it... that's just... crazy!

 

[Larry B.]

Man, my brain is still reeling from this idea of original Loveless knives being re-handled. Can you document that? I'm not doubting you, it just seems so bizzare I can't wrap my head around it. That would be like me taking a '57 Les Paul and putting new locking tuners or a Floyd Rose bridge on it... that's just... crazy!

What is more shocking is that the people buying them don't seem to care.

 

[James Terrio]

It seems they'd only "not care" if they figure they can dump it off for a profit before anyone figures out how incredibly stupid the whole idea is. And yeah, I agree, that's part of what boggles me.

Heck if I was that crooked I'd just get a job on Wall Street and make even more money

edit: sorry... that wasn't really very funny

 

[Kevin Jones]

Wait a minute guys.
Our discussion quickly went from my stating many Loveless collectors didn't care if Bob actually made his knives, to Loveless collectors not caring if someone else re-handled Loveless knives from micarta to ivory and stag.

Though I've heard this myth/rumor of Loveless knives being re-handled, I've never heard anyone state it as fact. So I'm with you James, I would love for Les to document his claim.

Les, I don't understand why you constantly try to discredit the Loveless shop.

To my knowledge, the Loveless shop or anyone else (for that matter) has ever tried to hide the fact that those other than Bob Loveless are making Loveless knives.

 

[James Terrio]

Agreed, Kevin, I'd have to have a lot more info before I'd begin to accept such a thing was happening on any kind of large scale. It's just too crazy-stupid to believe without proof (that doesn't mean it couldn't happen now and again, though).

I still stand by my general point that knives actually made by Loveless, or Bo Randall for that matter, will in the long run be more valuable than the ones made in their shops/with their permission by others.

I could be wrong of course, but that would fly directly in the face of every other collectable item from furniture to guitars. Watching one episode of "Antiques Roadshow" will make that pretty clear