Buy High ; Sell Low !

[GARY WORTHAM]

I can't count how many times I see posts for swords for sell where the owner quotes the high price they paid, but now are selling at a loss !

 

I think, what has happened here ? Did they buy too high, or are they now selling to a market that is out for the bargains only.

 

The mind set of the purchase of these expensive and exclusive items marks  them to be in a territory that is not of many's concept of future ownership and purchase.

 

Why one buys at such high prices, and decides to loose such a value; is a mind blower. 

 

After 20+ years of being a student / collector; I maintain the constant focus to buy a treasure that I would never want or need to sell.

 

This releases me from the pressure that so many display in their stress to unload an item that they really should have never purchased.

[vajo]

Everyone want to buy a treasure for his collection. But the price what is paid for must not the price that other would pay or can pay.

I thik it is a little bit like trading stocks. I buy it and think wow that was cheap. When it's time to sell mostley the price is down.

[SwordGuyJoe]

As I am selling a couple swords for a loss I'll weigh in on my opinion, the majority of the issue comes down to timing and the area of collection. The two Horii blades that I am selling are at a loss and I'll not make much/any for other swords I'm currently listing. Shinsakuto swords are very tough to move I've found in comparison to gendaito. In some respect, I believe it comes down to the lack of collectors for that specialized of a market. They have beauty but lack age, nor are they utilitarian and made for iaido. They are art swords that lack the age and aura of the fact that they were carried by a samurai. It's far more of a niche market. That wouldn't bother me if I didn't need to sell them. I was expanding to the Horii's from my main collecting path and while the swords are nice and in some ways better than other swords I will not sell, I just prefer my other area of collecting - then a few swords and a polish popped up that I couldn't pass up. Now I need to liquidate to pay myself back. If the market was stronger, it likely wouldn't matter.

 

Another factor is how a person buys. If one gets swords from small dealers or collectors that are not "retail", you'll likely be able to get decent prices (much like what I am selling). That said, at most sword shows I've been to, much of what you see is out of polish and unpapered. If you buy "retail" you pay more, but the sword is usually in good polish and in many cases with papers. This is important to some - it is to me - so I tend to buy from retail sellers at a higher price. I am not "Aoi Art" or similar, so my ability to capture retail prices typically is just not there. I could go for eBay, but have been burned by reserve auctions that don't sell and charge me money or worse, non-reserve auctions where I damn near give a piece away. At the end of the day, I paid a price that I felt was fair at the time and other buyers do not value the same things I do, in the same ways, for the same swords. Such is life.

 

Someone could offer a Tokubetsu Juyo ichimonji for $75k, which could be over half of it's retail value, but I wouldn't even look twice. Sure, it's over my budget, but even if it weren't, it just isn't my cup of tea no matter what the price. It's just not worth to me what it would be to someone else.

 

I joke around about how I'm weird in only collecting more modern blades, but this experience has led me to believe that it may not be as large of a joke as I initially considered.

[Shugyosha]

Hi Joe,

 

I hope your sale goes well - I love your monster katana.

 

I've got a couple of swords up for sale at the moment and they are currently priced at a loss. 

 

The answer to Gary's question is obvious in that, if you buy at dealer prices like I did, without a significant shift upwards in the market, you must sell at a loss. If I buy a sword at one price and then take it back to the dealer the next week he will pay me less than he sold it to me for.

 

To some extent the sales section on NMB has undermined resale prices also (sorry Brian!!) because people often hold off on buying what are already reasonably priced items in the hope of a further reduction and this often follows and then sometimes another one. 

 

Should I have bought these swords? Based on purely monetary criteria, obviously not. However, I do enjoy owning them, I've learned things from having them and I'm selling them so I can put the money back into something that I can learn more from (hopefully in a pleasant way). If I can't sell them at a sensible price then they will go back in the box for a while and I'll think of another way to move them on.

[vajo]

True words John.

It's a passion we like. And a passion was almost expensive.

 

If i would look on this hobby as a trader i would not have fun.

[Brian]

Sometimes people HAVE to consider resale value in conjunction with their collecting interests. If you are stupid (like someone I know intimately   ) and haven't done very much for your retirement, they you may need to look around you and consider every purchase as a possible and important asset. That might not mean you can collect $50K swords...but even a $2000 sword would have to be purchased very carefully with the thought of whether it can be sold fast in your local market.
Yes, there are pages and pages that can be written about how Nihonto are bad investments, and how you should rather be doing xxx or yyy, but if your passion lies in something, and you are going to be collecting it anyways, then you might be forced to consider your items as more than just eye candy.
Knowing your market comes from experience, and the market in every country is different. Here, swords sell for more than the USA or UK because there are just fewer of them. Not the hardest thing to sell, but still not the best thing to put your money into. But our interests choose us, not always the other way round. Have I said anything relevant? Not sure. But the point remains I hope

[Ken-Hawaii]

You might also consider the possibility/probability that it's just "marketing talk." I know few people who won't say something like that if it will get them a sale, even if they bought it for $100 & are selling it for $1000.

 

You can say (& be) anything on the Internet!

 

Ken

 

[SwordGuyJoe]

I wish in my case it was just marketing talk...

[GARY WORTHAM]

Interesting comments and ideolgys. To enjoy ones purchase at the expense of a loss or the lack of sale ability, is a dark force that is at the root of where there are but a few new serious collectors emerging to replace the fallen.

 

Collection as a passion; is far over shadowed by the shear expense to the new or finacially limited; not with standing the brutal learning curve with years to invest.

 

When one hears that they took a beating but learned things; well it is best to study the multitude of examples from every show in the USA and even the Dai Token Ichi.

 

I see at the shows, the younger new generation, buying the junk, the worn & tired; as well as a focus on cutting or polishing up there new find.

 

I feel that I am fortunate to have a somewhat learned low level of study after 20+ years, and a honest gut desire to collect, share, and advance the fully mounted swords that I have narrowed done as my field of interest. Never bought a sword that I would not be happy to keep forever, or as a concept of sale.

 

Anyway, I do my best out there to grow the study, share what I have &  know, and truly enjoy the unique, eccentric, & gifted folks that have dedicated themselves.

[Shugyosha]

Hi Gary,

 

I hope I'm not being rude but I feel that you I have to come back on some of the points that you have made. Yours is an interesting take on collecting that doesn't seem to account for the growth and changes in taste of the individual, the acquisition of knowledge or the idea that one can improve one's collection incrementally by selling from the bottom to acquire better items. 

 

Here's where I am at:

 

My finances are never going to be such that I can own a bunch of swords worth in excess of $10,000 - even if I could I would struggle to justify spending that much on a hobby.

 

My collecting doesn't have a particular focus, so how do I justify doing anything at all? Well for me it's about educating myself and I don't mind paying some "school fees" in order to do so - I don't regard this as taking a beating, though obviously existing in more rarified climes where every purchase turns a profit would be preferable. 

 

I guess there are a number of other ways that I could go about educating myself, one of which is to visit sword shows, but I'm on the other side of the pond to you and there aren't anything like the quantity or quality of sword shows in the UK that there are Stateside - in fact the only Japanese swords one can hope to see regularly are at millitaria fairs and these tend to be low quality. Furthermore, I have a wife who enjoys travel, but I have to take account of her when planning holidays etc and she isn't really interested in swords so my options are limited in terms of getting to Japan or USA for sword-related purposes.

 

Also, I don't buy things I don't like nor would not be happy to keep but do feel that continuing to develop is an important and there's no point in having a house full of stuff for its own sake - so some gets moved on. 

 

When the desire to develop stops so will my interest and I'll just sell everything and ride off into the sunset.

 

Kind regards,

John

[GARY WORTHAM]

Greeting to John

 

Well the great solution for both you and your wife would be to make your travel vacation to the San Francisco area and tour the beautiful city, enjoy it's history, and explore the unmatched coast.

 

While there, you could come to the biggest sword show in the USA, and bring your wife there. There are many with their wives there, they are great people, and enjoy the entire concept of the show.

 

I believe she would be supprised at how interesting and relaxing the set up of the show is, as well as meet other wives to see their reasons of interest.  

 

There is a lot to do in San Francisco as well as a show with over 140 tables; you both would have a wonderful time.

[b.hennick]

Hi John:

 

Years ago, at a sword show, there was a display of Masamune and his students. I fell in love with a sword by a certain smith. I thought it to be the best of the group. I then set a target of buying a blade by him. It took several years. I had to sell a lot of things - some at loss, to finally get my sword by that smith. 

 

Perhaps you need to set the goal for a $10k sword - polished, papered (tokubetsu hozon) +/- koshirae. Reach that goal and see where it takes you. 

 

10 $100 tsuba could get you one good $1000 tsuba. 

[Shugyosha]

Hi Gary: a trip to San Francisco would indeed make sense - I don't think I'd have to try too hard to get approval for that...and maybe a run on to Hawaii...I have a desire to visit the Arizona memorial.

 

Also Chicago might be an option as the Missus is into researching her family tree and has a wayward ancestor who went coal mining in Illinois in the 1880s and she'd love to do some digging around to see if she could find out anything about him and I could leave her to do that and take in the show.

 

Hi Barry: thanks for the reply - yes you are absolutely right. Perhaps the lack of focus is the problem and I should stop tinkering and get serious. Out of interest, which smith's work did you fall in love with?

 

Kind regards,

John

[paulb]

HiJohn,

The problem with visiting the San Franscico show is timing. The show runs right at peak holiday time so flights from the UK are extortionate. Last time I was quoted in excess of £2k. That makes the DTI a much more affordable option

 interestingly today Aer Lingus are offering flights for less than £250!

I would love to go to the SF show at least once but to make it worthwhile would need to tie it in to a much longer trip.

[Gakusee]

Actually, in the UK if you know where to look there are some good opportunities to view quality swords. Those sources include the meetings of the To-Ken of GB and Northern ToKen, some museums which allow studying of their blades through reputable societies as the aforementioned, events linked to NBTHK and other such organisations etc. And of course - fellow collectors. The depth and breadth are nowhere near the US but there are solid opportunities. And for those who can afford to travel and are NBTHK members, the Bonn and Munich sessions of the NBTHK European branch in Germany are superb. On top, in ToKen GB we are trying to broaden the events a little (e.g. the Ashmolean museum event a couple of months ago, the Chiddingstone event a couple of years ago, some other forthcoming museum meetings etc)

Michael

[Kronos]

When I first started visiting this forum long before registering around 2007 the goal was simple, a nice Shinto katana in polish with mounts around the £2k mark as I'd seen on the internet. At that point in my life £2k was a lot of money (and still is by and large) but as I learnt more my desire grew well beyond my means and I put it on the back burner for a while. Several years later I was in a slightly better position and started to read about nihonto almost obsessively and decided to write a list of what I truly want while still being slightly realistic (no Masamune's). 

 

I then had a choice which imho I think are the only 2 choices for those of us with small means; either save for maybe years for one or two solid items that you'll own forever or take a risk and try to flip items while studying them and turn a profit to build up to what you really want. I chose the latter and it's been an exciting ride although it remains to be seen whether I took the correct path (this months shinsa results will give me a better idea). Doing the latter requires knowing more than everyone else in the room which is where the OCD studying comes in but then there's E-bay where the room is the entire planet and you'll almost certainly lose. I just have 1 rule really, only buy items I like and would be happy to keep then you can never be too disappointed.

 

The third option which I never considered being a renowned cheapskate was what I hear often in that a small loss is worth the price of admission into this hobby and to study. There's enough shows and clubs for most that I feel it's not worth the price and your paying money to simply tread water rather than improve your collection.

 

For any option the most important thing is to have focus, a plan and set goals otherwise you're stumbling around (no offense intended to anyone).

 

Just my 2 cents.

[Alex A]

 

 

I think, what has happened here ? Did they buy too high, or are they now selling to a market that is out for the bargains only.

 

 

 

Gary, everyone wants a BARGAIN, nail on head, too much talk of great deals and bargains, I'm beginning to think its having an effect on the market

 

The only time I recouped all the money back on a sword from a dealer is when the dealer was offering it at a BARGAIN

 

Sensible buys are the BARGAINS like you see in the sales section, likely to get your money back.

 

If you buy from a dealer at "full" dealer price, then place an advert in the sales section a year later for the same price, your unlikely to see any comment such as BARGAIN, in which case it will hang around until you drop the price. When you drop the price someone might chime in with BARGAIN, and you might sell it, at a loss. (providing its not over $1800, that's when folk start to look for BARGAINS)

 

As for buying "forever" swords, well, that's ok for a lot of people, but people like me get bored easily, and sell to move on. Sometimes I think if I had a Masamune or whatever, id probably have it a year before the novelty wears off.

 

The majority of people in this game wont spend a lot on swords, there are those that will. Remember that those who can afford to buy fairly expensive swords can afford to take a loss, hence, probably not to bothered about a loss when the time comes.

[Markus]

Reading through the thread I'm not sure if I missed it but there is also the thing that you started collecting but then you are facing personal changes and you need cash right now and what goes first is hobby/passion, i.e. swords or fitting which you don't really want to have to part with for less than you bought them for but where you are ok with to make at least some cash at that time. So you just swallow the loss for the moment but that does not mean that you are out of collecting or out of the subject for good.

[Alex A]

Good point Markus, often avoided banks and looked at sideboard for a speedy loan

[Dave R]

Reading through the thread I'm not sure if I missed it but there is also the thing that you started collecting but then you are facing personal changes and you need cash right now and what goes first is hobby/passion, i.e. swords or fitting which you don't really want to have to part with for less than you bought them for but where you are ok with to make at least some cash at that time. So you just swallow the loss for the moment but that does not mean that you are out of collecting or out of the subject for good.

 Been there, done that. Now getting back in.

[drbvac]

It always seems that there is roughly a 50% difference between the purchase price and sale price at a dealer. IF you buy a blade without any reduction and bring it back a year later you would be lucky to get 1/2 what you paid.

This is a very large percentage to make

up over time as an investment. If one buys a sword from a non-dealer and gets it for a good price you may be able to mark it up 30-40% and

sell it for that profit but there is damn little money to be made as an individual in nihonto = especially if you are going to get it restored and\or papered.

 

The difference between what you pay and what you sell for if a profit is a bonus = if you sell for less than you paid - that is the rent you paid to

have the blade for the time you did. I believe the chances of buying a treasure for little and selling it for a lot is like winning a lottery - one in

several million.

 

Collectors and dealers are different - I am a collector that once in a while sells something for what I can get and if not will hold on it for a long time.

[IJASWORDS]

Reading through all the posts, I guess you could summarise the situation as "is it a hobby or investment". I think the two are NOT compatible, unless may be with the passing of time, the market price slowly rises.

You pay what you need to, or can afford to, to obtain some thing that you want. I have passed on many pieces because the price was out of my budget, I have paid some high prices on some because I really wanted them. However never with the thought of "how much could I sell this for".

If you ever have to move a piece on, you must accept the going market price, and this is NOT related to the price you originally paid.

You make a value judgement when you buy it, you must accept that a buyer will do that when and if you sell it. Neil.     

[Rich S]

I must have been doing something right - I've been buying high and selling low most of my life in cutlery collecting :-)  Of course, I collect for my own enjoyment and don't ever count on making money of resale.

 

Rich

[IJASWORDS]

Hi Dr Rich, been using your reference material for years!!! Just a thank you note for the invaluable help it has afforded me. Neil.

[Ken-Hawaii]

 

Of course, I collect for my own enjoyment and don't ever count on making money of resale.

Like Rich, I buy for my own enjoyment, with the very long-term intent of selling my collection intact. Although I winnow through as I build towards my ultimate goal, I'm not interested in selling piecemeal, but rather to another collector who has the good sense (& money) to appreciate what I've collected, & why. Of course, that may mean that I can't find a buyer, but I'm very lucky to have a wife who also swings swords, & is quite a bit younger than I, so it may devolve on her. None of our kids or grandkids seem to be interested, which is strange, because my daughter-in-law is Japanese, & I was sure that her son could carry on...nope.

 

But as far as collecting with the intent to make a profit, I really think that this would be very similar to "timing the stock market," something that almost always loses money. I much prefer to sit at the table, reference books in front of me, & a Nihonto in my hand, so I can study & enjoy the exquisite qualities that a tosho did his best to imbue in it 700 years before I was born. Understanding the historical connection of why the smith made the blade, be it for battle or a daimyo, why an ikubi-kissaki instead of o-kissaki, nioi instead of nie, what advantage utsuri gave, choji versus midare versus suguba...those are the types of questions that run through my mind as I try to understand, to the point where I can almost connect with the tosho's mindset.

 

And if you can't enjoy your blades like that, I strongly suggest that you find another hobby, & get your Nihonto to someone who can!

 

Ken

 

[Jamie]

I can't quote everything in this thread I have comments on but I'll add a couple of my thoughts nonetheless.

 

Anyone lacking focus, in my opinion should as previously stated attend a show. There are just so many nice polished blades. So many that out of all of price ranges. Join the NBTHK and go to the meetings at the shows. The tanto display a couple years ago was incredible. And the last one displaying koshirae through the ages. In my opinion some of the best money you can spend on education is going to the shows. There are so many phenomenal blades at every show I can't begin to list them. Listen to more experienced collectors also and learn from their mistakes, not just your own. At the show I mentioned we got to hold and inspect a Kiyomaro tanto. May older collectors told me they had only seen one through glass in Japan. There were a bunch of other blades also. One that is one my very favorite blades I've ever seen. I'm not mentioning it for courtesy to the owner. I just can't stress the shows enough.

 

 

I have a tanto for sale now. It's priced lower than the price I paid and the papers cost together. This statement isn't marketing, it's true. And I'm sure it's true from many others here too. It's ok though it will sell or I will keep it. I liked it when bought and still do. It has a couple flaws but it's strong points far outweigh its flaws.