Nihonto market in the US

[Peter Bleed]

Thank you all for an interesting discussion.

Once again Arnold has given us a rational discussion of the realities of collecting. I remember reading his contribution to the 1972 Dallas session and just not "getting it" 'til years later. As investments, swords are less than perfect. And if a bright sword collector worked hard on learning what Warren Buffet does, he would recognize that developing skill at kantei doesn't make economic sense.

I also agree with Chris' observation that "serious sword collecting" is so costly that ordinary people have a hard time joining in.

In principle those points of view are correct. BUT, for at least the next generation, I think that Japanese sword collecting will be approachable to a broad range of people - including those with modest means.

Across the US and other areas sword are still mildly chaotic so that under appreciated items are still to be found. AND, it is not simply the under-appreciated treasures. As they are being collected today, Japanese swords are "scalable". The great stuff may be out of reach. But Studying the good stuff (may occasionally pay off AND) can help low end collectors appreciated the mass of swords that will remain available to people who want to collect "Japanese swords." Look at how collecting of gunto has grown in the past generations. A lot of fellows who have no idea what a toku-ju might be, have gotten great satisfaction out of collecting swords that can't go back to Japan.

My point is that stepping on to the collecting escalator is likely to remains easy for some time to come. And once a guy has stepped on the escalator, met other collectors, bought some books, gone to some shows, collecting will move on upward.

Peter

[cabowen]

I agree wholeheartedly with Arnold about the non-financial returns to collecting and have often raised this point myself. Surely most true collectors are in it for the intangible returns.

 

I still believe though that the barriers to entry to this hobby, again, if you want to do it on anything more than the lowest rung, requiresignificant financial resources. Unless of course you are extremely knowledgeable- which rules out those starting out. Perhaps "significant" is relative...

 

Sure, you can collect showa-to and low end, $100 tsuba, or out of polish, mumei wakizashi, but even that costs real money if you want to put together 3-4 items a year, with books, perhaps attend a show or two a year, etc. Realistically speaking, you are talking maybe $4000-$5000 a year for shows, literature, and a several purchases a year. I would think that is a bare minimum. Maybe that isn't "real money" to many, but here in rural Wisconsin, and in much of the country, that is an insane amount of money to spend on a hobby. For someone in their 20's, they better be single and making very good salary to be able to toss that kind of money around. Especially with student loans, mortgage payments, car payments, insurance, -forget about children!, etc. And this is at the low end of the scale.

 

Now, try to collect a rung or two up where swords are $5000 or so, and a polish is close to that. Say you buy a sword or two a year, again, attend a show, maybe get a blade polished, etc. Now you are talking $15,000 to $20,000 a year. Now you better be making six figures a year. Chances are you are not in your 20's, maybe 30's.

 

Go up another rung to TH class and maybe a Juyo now and then, as well as a polish or two a year. Now, the air gets thin with an outlay pushing at least $50K a year. You are a lawyer, doctor, executive, or own a profitable company. You are not in your 20's or even 30's, most likely.

 

There is no doubt that there are many people out there into Japanese swords who can't afford to pay more than $500 or so for a blade. Every time I post some swords for sale, the cheaper they are, the more interest there is. A while back I put a few out of polish, project blades up for sale for a few hundred each. The response was overwhelming. The best sword of the bunch, a TH candidate, was $3500 and I still have it.

 

The burgeoning amateur polisher industry wouldn't exist if it weren't for people who won't spend the money for a professional polish.

 

Now, there is nothing wrong with collecting according to your means, and if those "means" have you collecting $500 swords, there is nothing wrong with that. But let's be honest, to collect even average swords, which I would say will cost $5000-$8000 or thereabouts, you are going to have to spend real money, and odds are you are not going to have the means to do this if you are young, unless you are quite well off...

[reeder]

You guys are nailing it post after post. I get great intangible benefit from collecting all sorts of things, including swords. To justify it to my wife and continue purchasing new pieces, I tell her its a great financial investment and have to show her to continue. There are certain things I buy and sell just to fund the things I want for myself. And when I buy something for myself, I won't buy it if I don't think I'll be able to dump it quick and at minimum get my money back out of it if need be. Mrs. Reeder would put her foot down on this so fast if I was loosing money, without any concern to intangible value. Not only does the financial gain justify my purchasing of the items to her, but it also makes her a little easier about the amount of time and money I spend researching, displaying, searching and buying, listing and selling, going to shows and shops, etc. I guess if I were single or made quite a but more I would be able to consider the intangible value and joy it brings me. I've been trying to clear out a lot of things recently to fund some higher end blades, not necessarily just swords, but a nice sword is one of them, for me a really nice sword is $2500 or less and that's stretching it. Selling quite a bit of things to try and get there.

 

wwii era gendaito may be the limits to my sword collecting for my lifetime, unless I win the lotto or get lucky on a piece here and there. One of the things I've been running into is that people think their showato swords are 600 year old national treasure blades worth $20k+ on a sword that at best may go for $1400 and there's no talking sense into them (I guess that's for another discussion). I do have an emura bare blade I got into decently that is out of polish. Was thinking of saving up for a polish, then realized for what they've been going for I could buy one in full polish already in mounts for quite a bit less than it would cost for a polish and shirasaya.

 

-brandon

[paulb]

I haven't joined in this discussion as the title specifically mentions collecting in the USA. Although my remaining swords were all bought from dealers in North America I have no direct experience of collecting there. However following up on Chris' point and based on direct experience. I think for any collector regardless of the field it is normal to start at the entry level, whether you are 20 or 50, it is rare for a complete beginner to splash out large amounts of cash on something they have no understanding of (I accept that it does happen and there are those with sufficient funds not to care if they get it wrong, but they are the minority)

For most of the start is modest. I bought my first sword in 1983 for £225. I had a mortgage two young children and was living hand to mouth like everyone else at that time. Such a large purchase was a cause of major guilt on my part, but the intangible benefit of starting on this field was immeasurable.

For many subsequent year I was limited to spending about £300 per year on the hobby, whether that was more mediocre swords, books or a part-x for something slightly better. Over the next 20 or so years it became a little easier to spend slightly more and also I had a number of pieces I could trade up.

I have now largely stopped although I might still be tempted if the right thing appeared. But the swords I have are as good as I am ever likely to be able to obtain.

This is not a result of being wealthy, I am not, nor have I made spectacular profits and what I have bought and sold. It is a matter of patience. In slowly building a collection and refining it. Making sure that each addition adds to the total (from a knowledge and aesthetic viewpoint rather than cash) and enjoying the journey.

Part of the problem today is that new collectors seek instant gratification. Greater availability of information increases expectation and people want to start at the top.When they cant they get turned off.

I still believe the market allows for the gradual and continual improvement of a collection and an increase in its monetary worth

It just takes time and dedication.

Sorry Sunday morning ramble after Australia thrashed the English in the first test match, oh yeah and its freezing here too!

[seattle1]

Hello:

The first time I remember encountering the word serendipity, for the lack of a better definition, stumbled upon good luck, was in something Peter Bleed had written, probably for the JSS/US Newsletter years ago, and that word alone has always reminded me of the ever present opportunity for every collector to find a treasure. Yes, the low hanging fruit has been picked and the gold paving stones long ago dug up, but no collector willing to acquire knowledge need entirely discount the opportunity to get lucky. Good swords are still out there waiting to be found. A friend of mine within the last two years found and bought for far less than its market value a signed Ko Bizen at a major mid west gun show when the dealers (the owner was not a sword dealer) were packing up. Dozens and dozens of other sword collectors were said to have passed it up as it was just tossed among uninteresting stuff on the table. I would be willing to bet that at every major US sword show that there is at least one mu mei koto, which if bought and properly polished would have a better than 50:50 chance of making Juyo Token.

I really agree with those that see a collecting future, if not in ageing Japan, than elsewhere in the world where interest in Japanese swords and culture, the latter being I suspect of equal importance, is thriving. For those of us who have been collecting for a while those folks need to be welcomed, encouraged and helped whenever possible.

Arnold F.

[Alex A]

One thing ive noticed all you guys have is a passion. Without that, anyone new to collecting will eventually give up.

[cabowen]

No doubt one can get lucky and find a treasure-we all have our own story or know of someone that has found something special. But how realistic is this for someone trying to break into this hobby?

 

I actually do all I can to discourage this kind of thinking because it is exactly what drives the treasure hunting on ebay among those who have more passion than cash and experience. We have seen it end poorly here time and again. There is nothing wrong with treasure hunting but it takes either a lot of experience (which few have to succeed regularly) or incredible amounts of dumb luck. Anyone that lucky should be buying lottery tickets.

 

Perhaps Paul has hit on a potential route for new and aspiring collectors- start very slowly and build over time as your resources improve. The problem with this route, sound as it is, is very few have the patience to stick with it. Add to it the other barriers I have mentioned (learning curve, downward trend in prices) and again, you have a very tough sell. While it is a stereotype to blame impatience on the young, it is unfortunately true in many cases- we are all familiar with the "instant gratification" pushed in all the media. I note that Paul started in 1983- at this time sword prices were yet to experience the Japanese boom and subsequent bust, and there were still major differences in prices across markets. It was possible in 1983 to buy a very decent sword for much less than you would pay today as information and prices have equalized. In general, these opportunities are few today.

 

I hate to be a dark cloud, but I see little to be enthusiastic about when looking into the crystal ball and pondering the future of Japanese sword collecting. I have talked with many collectors and craftsman in Japan and the trend there is decidedly down. Membership in the sword societies has decreased, the average age is increasing. It has been a long time now since I attended sword meetings in Japan but I saw a steady decline in membership numbers and a dearth of new, young people joining. I attended sword shows in the US in the 1980's and again in the 00's. Big difference. Of course one can blame a great deal on the internet for the decline in attendance and the loss of many players to the breaking of the Japanese bubble. But look at the average age of the attendees and dealers- it sure appears to me to mimic what I have seen in Japan.

 

It has been mentioned that a great deal of interest is coming from eastern Europe and China currently. Without a doubt there is a lot of new money in those economies that has expressed itself in many collectible areas. Swords will go where the money is. We have seen them move back to Japan in great numbers when the Japanese economy was on fire. After the bubble there burst and things picked up in the US, we saw them moving again to the US. Now there is money sloshing around in another part of the globe and they will flow in that direction. The key, again, is "money".

 

It bears keeping in mind that all the swords that came to the US after the war, and make no mistake, it has been estimated at millions, and fueled the collecting bug for decades, came here essentially as rewards at zero financial cost to the new owners. It was an anomaly we will never see again. The fact that the "word" is now out, combined with our information age, has for the most part eliminated the windfall profits enjoyed for decades. Of course, every now and then some lucky soul finds that needle in the Ebay haystack or at the gunshow, and for some it is the treasure hunt that keeps them in the game more so than anything else. But again, it would serve most collectors, and those considering entering the hobby, to focus more on education and less on treasure hunting if they really want to build a quality collection in the end, regardless of the size of their financial resources.

[Pete Klein]

Chris is right.

[seattle1]

Hello:

The point of my last post was not to lead the neophyte to believe that he would stumble on a treasure by just being somewhere and grabbing a sword off a table. In both illustrations used the underlying point was that acquired knowledge is the necessary condition. For my friend, who is a collector, to pick that old sword up at the strategically right time and to know what he bought, took years of study and experience, and yes, a few bucks. It had been ignored by others who ought to have known. As for finding a Juyo at a major sword show, again it is knowledge and a roll of the dice. For the beginning collector, who is probably stepping on the bottom rung of the ladder, his newly gleaned knowledge will help separate the worthwhile initial purchase from a hopeless candidate for collection. Treasure can be a relative term, but at every level the buyer wants as much value for money as can be found. At all levels relative opportunities do come along. They are not the object of collection, merely an artifact of collecting anything.

What has happened to the sword market takes some careful analysis. It is not just a matter of sword buying and selling, which I believe is healthy given internationalization and new avenues of market behavior that the internet has brought about. To get the fuller picture one would also have to recognize the quite dramatic increase in tosogu interest, primarily in tsuba but in other objects as well. Many of those buyers started with an interest in swords alone, but post 9/11 difficulties of moving blades spatially, including the danger of baggage theft, has created obvious substitution effects. I can recall bringing swords into an airplane cabin; that is a thing of the past, but a few tsuba are likely to go unchallenged. Times change and so must the view of the market. If the tosogu market appreciates too much, the natural market consequence will be to direct more interest towards swords, armor, etc., as all samurai objects are ultimately complementary.

Arnold F.

[cabowen]

I think we both agree completely Arnold, that knowledge is a prerequisite. Perhaps we are simply addressing different facets of the sword collecting conundrum. My point has been that it is exactly this information requirement, along with the current costs of collecting, that is limiting the entry of a new and younger generation of collectors.

 

Your point about the move into kodogu is an interesting one and does indeed add a different spin. I do not follow the kodogu market to any real extent; do you find the kodogu collector community aging or are new, younger collectors emerging with regularity to keep that end of the hobby vital? Certainly prices for decent tsuba seem to have come down and they are perhaps within the reach of younger collectors...

[seattle1]

Hello:

Agreed Chris. The market we speak of has so many features as in part it depends on which part of the elephant the blindfolded story tellers have ahold of.

As for the tosogu market I know of several old line collectors in Europe who have very massive collections and as I understand at least one it of the highest quality and very comprehensive, but they have been collecting for many years. I do have the impression that plenty of younger people are collecting tosogu, particularly tsuba, and Bob Haynes says there have always been lots collectors who have no interest in swords. I can think of several big sword collectors who seem to have gone over to tosogu almost entirely if not entirely. I have the impression that a lot of tosogu changes hands, as it always did, other than at the shows we usually attend, at lest in the US. Auctions have always been important in that regard and they continue to be. The arrival of Bonhams as an active seller over here recently is interesting.

You mention that tsuba seem to be getting more realistic in price, I suppose after something of a run up, and I agree. I think that is a function of more careful buying in the last couple years and that is only natural when some pricey stuff, particularly iron, has met the reality of both study and the realization that there is a lot of good stuff out there and it is coming to market regularly. Evidence for learning and interest both is reflected in what seems to be an increase, both absolute and proportionate, in submission of tosogu at shinsa, at least in the US. You probably know much more about that than I do. An iron tsuba used to be pretty much just an iron tsuba, but people now realize that at least in the Japanese market eye, there are really substantial differences in assessment, relative scarcity and market value. The same sort of sorting out and rank ordering happened years ago here in the sword market.

Arnold F.

[Pete Klein]

I've lifted this from Barry's pictures from the DTI. It is an interesting reference point in the discussion above I believe:

 

 

---------- ~$6,000-------------- ~$12,000

[Surfson]

Education has been mentioned by several as one of the challenges of a neophyte coming in to collect nihonto. When I began to collect in the '80s, it was necessary to find a couple of individuals or a group of collectors, and hope that one would take you under their wing (rather than viewing you as a dumping ground for their mistakes!).

 

Nowadays, we have the NMB, which is truly amazing as a source of collective knowledge. I wonder if there are similar websites/message boards in Japan? In any case, a new collector can learn an great deal from the NMB, without investing a penny. Brian and his predecessors on the NMB (am I recalling correctly that you are not the first host, Brian?) deserve tremendous credit for this.

 

Brian, can you tell us how membership in the NMB has changed over the last five or ten years? Has it leveled, shrunk, grown? Do you have information as to the nationalities or geographic locations of NMB members? If it has grown a lot, it would be a good indicator for our hobby.

[Brian]

Definitely not the founder. It went from Rich S, to Rich T....to myself (the opposite of rich )

I do have specs on countries and demographics. As for members, a lot have come and gone. Some good guys couldn't adapt to the online thing, and some clashed with others. This hobby is a very political one, and I see a lot of divisions.

But the hardest to keep around are the more advanced collectors. Maybe because they have the least to gain from the online thing..and many aren't comfortable constantly educating. Lots of reasons, but we do have a core of stalwarts that stick around. Maybe for the social aspect more than anything.

The members do fluctuate. Some read only, and some disappear for a year or 2 and then re-appear.

There seems to be at least 1000 dedicated readers and viewers. With a few more thousand who only pop in for info or a quick read.

I can't say it has grown or shrunk. If anything...I would guess the hobby guys with one sword have grown, and the serious guys really looking to collect have decreased.

Where I have seen growth is access coming from places like China and Russia.

Other than that, US has been fairly constant, and in Europe...Germany seems particularly strong.

 

Brian

[christianmalterre]

it´s funny you do show this picture here,Pete

me had same sentiments seeing this....

actually it´s but quite logic-Not?

This late Yagyu is boaring-such 6k(which is much to overpriced for actual market-situation)

The Kanayama is good-still but lacks significantly for what one "serious" collector would jump...overpriced equally despite the seller does have an really good argumentation point...(?)

 

in sum-good Tosogu is getting rare i think(to see out of personal connection)

 

Christian

[LakeBum]

I agree with what you guys are saying too. I got into the hobby about 2 months ago but I have always been into Japanese culture. Took 5 or 6 Japanese history classes when I was in college. I'm a 30 year old teacher with all my student loans paid off but I just married a speech path with almost none of hers paid off lol. I've dropped money on books so far and I am starting to get an idea of what I might want. Just because I might know what I want, I certainly do not know what it would be worth. For me this will be a slow buy in as I go to shows and catch a few guys willing to talk shop. Basically I am going to read until Feb and go to the show of shows to look at some gendaito (prob more my price range). If I dont see what I think is a deal then will keep reading and wait for the show up in Chicago in April. The 5k nice swords are just out of the question right now unless they start serving vodka at blade shows (prob not a good idea). Hopefully I will land a principals job within the next year or 2 and then my play money will go up a bit, but until then I am happy to just be reading.

[Fred Geyer]

[[To get the fuller picture one would also have to recognize the quite dramatic increase in tosogu interest, primarily in tsuba but in other objects as well. Many of those buyers started with an interest in swords alone, but post 9/11 difficulties of moving blades spatially, including the danger of baggage theft, has created obvious substitution effects. I can recall bringing swords into an airplane cabin; that is a thing of the past, but a few tsuba are likely to go unchallenged. Times change and so must the view of the market. If the tosogu market appreciates too much, the natural market consequence will be to direct more interest towards swords, armor, etc., as all samurai objects are ultimately complementary.)}}

Arnold F.

 

Arnold hits the nail here, the market has really moved into Tosogu the high end stuff has almost doubled in price in the last 10 years and is hard to get because of a world market for them. Try to find a great Jingo, Higo or Tanaka tsuba! Or a early koshirea get out the check book and then wait for some one to offer one which could be years!! But you want a Juyo sword the web is full of them for sale.

I think a lot of it has to do with the problems of moving around swords but mostly the time it takes to understanding what you are looking at, as today we live in instant gratification world. Order your food drive up 20 feet and there it is ready for you.

Take 2 months to understand a Bizen to a Mino blade...not going to happen or be able to read the most simple kanji WOW you have to be joking! But have a fully mounted in polish and papered blade at a fair price and it is sold. Why, because nothing to understand just need money and I have a wall hanger to show off!

 

Fred

[BMarkhasin]

I am almost exclusively an early period collector, and have been focused on pre-Edo for ~20 years. I distinctly recall in 1994 being aghast at paying $500 for a good set of ko-kinko menuki, then in 2002 being horrified at paying $3000 for an old iron tsuba and having buyers regret for months. By 2007, I was paying $6000+ for the equivalent tsuba, and feeling fortunate for the opportunity to buy it at all. Good early koshirae are practically unicorns, and I am now experiencing a whole new level of sticker shock when I do find them... The point being that at least for good early tosogu, the market has been steadily rising for the last 20 years, and I would say in the last 8 years, that curve has changed from arithmetic to exponential. In 2006 I paid what I felt was an insane price for a sword, and in 2011 I was thanking the kami for allowing me to breakeven on it when the market had slumped by 25%. Today I would wager I'd be able to pick up an equivalent sword for 30-40% less than what I originally paid for it. It seems that the sword market has gone reverse course to tosogu. As Fred and others mentioned, the market is awash with Juyo blades. Part of that tosogu price rise I mentioned has been due (I think) to a significant number of sword collectors being frustrated by over a decade of insanely inflated prices followed by the inevitable cataclysmic crash, and switching to the tosogu market in frustration. Over-printed on this trend was the drop in value of the U.S. Dollar relative to other world currencies. All this uncertainty, primarily in the US markets, resulted in an abrupt drop in consumer motivation and spending.

 

European collectors caught-on to these trends immediately, and for the last 5+ years have been buying up a lot of tosogu, swords and armor from the US and Japan. US collectors however have stagnated, and unfortunately reverted to selling-off their collections at a loss, or piddling around looking for bargains. As a dealer trying to make a profitable business during that period, it was tough to see the historically robust US market fall so fast. Over the last 5 years, we were selling >90% of our good inventory to the Europeans (France, Belgium, Switzerland and Germany) or back into the Japanese markets.

 

From an economic perspective, I think that the market is re-aligning itself, whereby buyer and seller expectation curves are starting to converge again, but at the bottom of the sine-curve. I predict we will see an increase in market confidence in the coming 2 years, but with prices remaining generally on the low-side. The only exception (as always) are high-end items, which are less susceptible to market jitters.

 

my 2 yen....

 

Best Regards,

Boris.