Collectors vs Investors

[drbvac]

As I was writing another topic where I learned from a dealer of the expectations of most newer buyers that the blades be both flawless and papered. I have one with papers although I know there are others that would but I can buy 3 unpapered for 2 papered of the same era, quality etc

 

It got me to thinking that perhaps many of the new folks on the market are certainly appreciative of Nihonto but have more money than knowledge. To at least cover themselves they buy only papered and then feel they can sell their acquisitions at some point and maybe turn a profit. Well papered or not I wish them well because other than a find - a real find - most blades less than 20 grand are not all of a sudden going to be worth 40. If you think the market is tough the only thing that could be a worse investment as far as I can tell is a car.

 

The other thing is many of these buyers may like to look and hold but probably have no appreciation of what they are looking at - like modern art - no clue on my part. So I guess I may be a little discouraged as what has happened with many collectables , something becomes popular and thousands of examples are bought up by wealthy folks with a sudden urge to own several examples and call it a collection. These may never be seen again and depending on the circumstances could end up in a relatives attic in 100 years.

 

I will admit I started collecting nihonto as the weapons they are or at least were intended to be - like the Kanemitsu - flawed - yeah it is but it is also still here on earth and 700 years old and - weapon - you sure as hell would not want to get hit anywhere with it. Art - it is in that an artisan made it - on my level with the suguha hamon - not fancy - it is folk art The hamon is utilitarian in that it is to harden that edge - as a weapon.

 

Anyway - 2 feet of snow came down and is blowing around and can't go anywhere so just musing on "one" of my hobbies - as long as it makes me happy till I die who cares.

[Dave R]

You took the words right out of my mouth.....

Dave R

[Loco Al]

"I have enough money to last me the rest of my life, unless I buy something." (Jackie Mason)

 

I am not sure that you are being fair to new ( still relatively naïve and insecure) collectors who have more than just a few pennies to rub together. I do agree that Nihonto are likely not a good investment, especially in the present climate (pun intended). I can't imagine that even the most novice collector would assume that a Nihonto is a monetary investment for the future. It's an investment for the sake of preservation and appreciation.

 

Alan

[Alex A]

New folk wont have knowledge, so if they have bought a sword with papers they have either been lucky or sensible. Im not sure how one might think he could turn a profit when he knows nothing at all about what hes buying. He might get away with one willy nilly purchase, but to go down this route several times without gaining further knowledge would be a stupid thing to do, rich or not. Hopefully the first purchase would satisfy the curiosity, if thats what it was, curiosity. Its only the educated that can take the risk on unpapered blades, this whole hobby being based on knowledge. It is a rich mans hobby, i wont be spending much more money on swords, think its unwise. Now i have started to get a little more knowledge i may look at cheaper swords without papers, or sell to move up a bit, theres only so much time i will drive round in a crappy old fiesta LOL.

[Clement]

The main reason why the new nihonto enthousiast take consideration of papers is they are aware of their lack of knowledge, papers are like an expert help to tell you if this sword is worthing preservation. It's the whole point with the NBTHK institution.

 

Not for sell, not for profit, not for any financial reasons... but hey, if you can buy 3 unpapered for 2 papered of the same era because you have knowledge, it's your right to think it is, well... good for you.

[Jim P]

Hi Brian, My thoughts are a lot of us are no longer looking for that find, like years ago, I strive to get as close to flawless and get papered blades why ? because don’t we all strive for the best examples? I like to collect koto and I understand that the level of knowledge required to Kantei o'suriage mumei swords I and 90% of the board does not have and like me probably will not have for a very long time but more likely never. I just do not have access to that experience and in some cases even the knowledgeable have problems have a look at Paul’s A Yamato Hosho Tanto are you going keep it unknown and have a ? or polished and get the best opinion you can? for me I would like to know what I have and as stated I do not have that expertise and let’s face it it’s the papered swords that are the reference’s and examples so in 2014 most strive for that level if they have the funds. I have a friend a long time collector who has one of the best Library’s in Australia who had a lot of swords in the 100’s but in the end only 10 or so were good enough to spend $ on when a well known polisher had a look at his collection and he has years of experience some like to hunt but a lot of the newer collectors are getting better advice don’t we say buy papered swords and look for the best examples in the end we all have different approaches and it's what works for you . :D

[drbvac]

Of course you are all right when getting into the disease state of Nihinto collecting or appreciation and you folks on the board are a good example of what any novice should do - 30 years ago many many blades were not papered and now it seems to gave gone to the point where it is a make money project for many. Again - nothing wrong with that any more than being assured what you bought is what you have,

 

The folks I am speaking of are not on this board and may never be - they like the idea of samauri and the look of their swords - they are buying papered blades cause they have no other choice for what they want them for. Anyone can buy a very fast car -- not many can actually build one. The people that are buying these as an "investment" and require perfection and papers are either going to be surprised or upset in a couple of decades. At the same time they pull up the prices for joe average who collects for the sake of collecting and not for an investment. Collecting - hard to find what you want and the dealers will mark it up 50% and when you want to sell they will give you 50% of what you bought it for. It will take years if ever for the market to go to the point where there are any sizeable returns especially in high end papered blades.

 

Back to cars - Muscle Cars from the 70's that I bought and drove for $5000.00 are now selling for over a million. Damn few ever get to drive them any more.

 

Too bad when the prices are through the roof and a new collector has trouble affording a blade not worth the cost of a polish.

[Alex A]

Muscle cars, my brother sold a 68 Dodge charger RT 10 years ago for £8000......now would be at least £35000 , an interest topic one day.

[Robert Janssen]

Speaking a bit from personal experience I think most new (young?) collectors get their interest from movies etc. They like the sword for the look and the "myth" surrounding samurai swords. their first stop will probably be in the Paul Chen category, maybe learning more and going to the "real deal" forge folded Paul Chen swords coughing up 1500USD plus for those...

Although I skipped the Paul Chen phase, in the beginning Nihonto seemed unobtainable, overexpensive and "out of my league" so to say...

 

The ones that dig deeper realise they've been hussled by Paul Chen If they get over that disappointment and continue will most likely buy papered swords, so as not to get hussled again. This is a safe buy for them that covers their investment and in their mind return a profit in the future. The ones that can't afford papered Nihonto will try to find unpapered cheap ones, and probably again get hussled on Ebay with a Chinese fake

 

The problem new collectors face IMO is that the amount of knowledge is too low for them to make a good call, and probably buy papered if they have the cash. The ones that do are the lucky ones, they have a good piece to start learning more. The others face a difficult route, and waiting and learning BEFORE buying is pretty rare nowadays.

 

Anyway new collectors probably all THINK their purchase will keep it's value. the ones that buy papered might be lucky and not loose money, the rest will probably learn the hard way when they try to resell their item.

 

my 2 cents...

[cabowen]

The people that are buying these as an "investment" and require perfection and papers are either going to be surprised or upset in a couple of decades. At the same time they pull up the prices for joe average who collects for the sake of collecting and not for an investment. Collecting - hard to find what you want and the dealers will mark it up 50% and when you want to sell they will give you 50% of what you bought it for. It will take years if ever for the market to go to the point where there are any sizeable returns especially in high end papered blades.

 

I think that it is unfortunate that many were in the bubble period of Japanese sword collecting in the early 1980's. During that period, Japanese dealers were attending US shows and buying quite literally, mountains of swords to take back to Japan. They paid multiples in most cases of what anyone thought they had any right to think they were worth (most had no idea they were getting rich doing this because at the time Japan was awash in cash and these dealers were selling them for multiples of what they were paying for them in the US). As a result, swords prices in the US jumped dramatically, making most think this was a great investment, or a great way to make money. Like most investments, timing is everything. The Compton auction is a case in point. Soon after that sale, the bottom fell out of the Japanese market and really hasn't recovered since. As a result, sword prices have not continued to go up and those who assembled their collections late in the bubble and held, are now sitting on paper losses waiting for things to turn around. They may be waiting a long long time...I doubt we will ever see the kind of appreciation witnessed during those go-go years. People buying now don't stand to lose as much, but it is doubtful they will make much, if anything, either. Buying swords is, to beat the horse, not a good investment for most.

[nihonto1001]

This reminds me of the Collector vs Dealer debate from a while ago. We are all Collectors, Investors and Dealers to some degree. We are all in it for the love of the subject. I think more people would be involved if they knew they could collect/invest in real Samurai swords. Most people think this stuff is locked up in museums.

[Loco Al]

Of course you are all right when getting into the disease state of Nihinto collecting or appreciation and you folks on the board are a good example of what any novice should do - 30 years ago many many blades were not papered and now it seems to gave gone to the point where it is a make money project for many. Again - nothing wrong with that any more than being assured what you bought is what you have,

 

The folks I am speaking of are not on this board and may never be - they like the idea of samauri and the look of their swords - they are buying papered blades cause they have no other choice for what they want them for. Anyone can buy a very fast car -- not many can actually build one. The people that are buying these as an "investment" and require perfection and papers are either going to be surprised or upset in a couple of decades. At the same time they pull up the prices for joe average who collects for the sake of collecting and not for an investment. Collecting - hard to find what you want and the dealers will mark it up 50% and when you want to sell they will give you 50% of what you bought it for. It will take years if ever for the market to go to the point where there are any sizeable returns especially in high end papered blades.

 

Back to cars - Muscle Cars from the 70's that I bought and drove for $5000.00 are now selling for over a million. Damn few ever get to drive them any more.

 

Too bad when the prices are through the roof and a new collector has trouble affording a blade not worth the cost of a polish.

 

Brian, you may have sparked an interesting debate.

 

What I would like to know is: Where does this notion come from that there are people buying, or "investing" in, nihonto who are solely interested in making a profit (other than sword dealers, of course)?

I suspect that you may be generalizing, and that there are very few who would actually consider a nihonto purchase purely motivated by profit. Who are these people? Can you give examples?

 

Please forgive what follows, because I am going to take the mick out of you. I suspect that you may just be suffering from cabin fever and really should deserve more compassion. Anyway, your opening post sounds like the self-pitying ramblings of an old man (snowbound and nursing a bottle of single malt) who has an attic full of ho-hum un-papered old blades and has finally come to the realization that he may never be able to sell them. If he can sell them, he will have to take a loss because the well-informed moneyed buyers are looking for papered blades (preferably something unique or rare) in excellent condition as a hedge against taking a future loss themselves. Also because those blades may bring greater satisfaction.

 

I certainly see no evidence that prices are being pushed up by a wave of new collectors looking for only the best. If anything prices have gone down and there are some "bargains" to be had, if you haven't already spent all your money on speculative un-papered blades.

 

Of course everyone buys their first blade out of curiosity. You said: It got me to thinking that perhaps many of the new folks on the market are certainly appreciative of Nihonto but have more money than knowledge. I am sure that could be said of almost everyone who buys their first blade, no matter how cheap. If they get hooked, then they decided to start studying and learning (hopefully). If they are lucky and they had some guidance, then their first blade might be a good one. If not, then they chalk it up to experience and write off the loss.

 

As I said before, I think the notion that someone would buy a nihonto as an investment is ridiculous. If they were really considering art as an investment, then they would be looking at something more mainstream like paintings by Canadian masters (if they live in Canada) for example. Nihonto collectors are a niche market, and I fear that we are considered to be somewhat peculiar by most mainstream art investors. Until this perception changes and more people become interested in acquiring Nihonto, then you may be stuck with those old swords. There are too few interested.

 

This might prompt me to spin off a whole new topic, perhaps deserving of it's own thread: The liquidity conundrum. How much is too much to spend on a sword, lest the market is not there when you decide to sell it one day. Again, relatively too few buyers in the rarified atmosphere of Juyo and above. Those who can afford have an abundance of choice, and can afford to be very picky.

 

Alan

in Canada

[drbvac]

Alan:

 

I will have no problem selling any of my blades for what I paid for them - at least unlike Nortel they are not through the floor :lol:

 

My most costly acquisition was about 5G , many in the 2G range and I know seeing papered blades that if I wanted to go through the process they would paper as attributed - and I would make some money but again - not my focus - appreciate - collect - buy&sell - have fun.

 

My comments regarding investments of which I will assuredly agree they are not, it was related to a demand for perfect, papered blades without any questions and paying what they are now charging 0 it seems the act of a smart neophyte or someone not wanting to take a risk and lose money.

 

My tachi will certainly get me my investment back BUT - if one wants to explain to those interested how a muromachi tachi gets shortened and looks like a shinto Katana - cut 8" off mine -- blade that is. And about museums - I have seriously never seen another outside a museum - mnd you I am in the middle of nowhere in terms of Nihonto

 

No my observation was as much a question as a bit of gospel but I do know people are looking for alternative investments and it got me to thinking - In any event my Picasso and Matisse prints are doing fine :D

[cabowen]

To hell with the prints, we want to hear more about the women, liquor, and german cars, and yes, in that order

[Loco Al]

Can I interest anyone in a couple of paintings? Need money to buy a Go Yoshihiro.

 

Alan

[drbvac]

Single Malt = Cardhu - Highland Park - Oban

Wife - 1

German cars - many - too many - Motorcycles - Japanese sports cars etc etc

Here is 3 older ones:

 

-

 

AND the current one - BMW M Coupe - 1 of 38 Red in 2006 - ESS Supercharger - 435 HP - scary // So who has 5 cents to spend on blades :D

 

[cabowen]

it always comes down to a person's priorities.....thanks for sharing...The BMW looks like a trail of speeding tickets waiting to happen.

[Loco Al]

 

AND the current one - BMW M Coupe - 1 of 38 Red in 2006 - ESS Supercharger - 435 HP - scary // So who has 5 cents to spend on blades :D

 

 

Ah yes, that explains it!

 

I think that I finally got that sports car thing out of my system a while ago. Sold my last great german sports car a year ago. Now I just drive a truck. Makes me sick to think how much money I wasted flipping cars over the last two decades.

I have only two nice Nihonto. I hope that they will at least hold their value, and maybe even increase in value over the next ten to twenty years. That would be a bonus, but I won't count on it.

 

Since you say that most of your swords are in the 2G range, then at least it won't hurt so bad if you have to take a bit of a loss one day. Wouldn't be so devastating as taking a big hit on a pricey Juyo sword. But as long as one stays within one's budget and has fun, that's the most important thing. That's how I rationalized the depreciation of my former sports cars.

 

Hope I didn't ruffle your feathers with my first reply.

 

Alan

[drbvac]

You weren't here when Rheinhard was on the board = thats nothin. :D :D

[Marius]

Sorry for the OT, but what happened to Reinhard and Milt the Ronin?

[Rich S]

In short, collectors do it for love of Nihonto; to he$$ with the value. Investors are just delusional :-)

 

Rich S

[Brian]

Reinhard spectates occasionally, and Milt's Nihonto interest seems to be a little dormant nowdays. He can be found on eBay. A little older and a lot wiser...I think the military was good for him

 

Brian

[Marius]

Thanks Brian

[drbvac]

I sort of miss them - another is Guiseppe tach something from Italy and DOCLISS From the isles off Britain - good Tsuba source

[John A Stuart]

Carlo is busy as all get out and J. Lissenden participates quite often, lately in the Namban thread. John