Is it worth it?

[stenbar]

I'd be interested in hearing your thoughts on how prices are determined and the investment potential of nihonto. Has the market appreciated much over the last 5, 10, 15 years?

 

Are the majority of the members here collectors that occaisionally sell, or seller's that occaisionally collect?

 

Also, would $1400 be a fair price for this?

http://www.aoi-art.com/sword/wakizashi/08319.html

 

As always, we newbies appreciate all input.

[Bungo]

" the investment potential of nihonto "

 

there are better financial vehicles than nihonto if $ return is the main and only motive.

 

Or unless one manages to find nihonto in flea markets or sellers who don't know it's true worth, I know an old time collector who frequent the local garage sales, asked the woman if she had swords. Lo and behold she got one. Bought it at ridiculously low price after shaving 20 bucks off. It's the principle of the thing ( bargaining, i.e. ) according to him. :lol:

 

What's the chance of that happenbing on a regular basis ? I'd say very very remote.

 

By the way, someone on the list actually said he'll send some $ back to the seller if he turned a big profit on a bargain. Well............. . Just say personally I am not that saintly but hey, some people are nice .............some people do subscribe to the samurai code and believe in it.

 

milt

[Ford Hallam]

Hey Milt,

 

"proper" Samurai wouldn't have dirtied their hands with filthy money ...and the thought of actually making a profit would have been disgusting, particularly in relation the their swords :lol:

he he, this must be why I've never got any money...too much Bushido

 

...but in answer to the initial query; I'd say that Japanese swords in general make poor investments today. The market is probably a little slow/depressed at the moment, the last 5 ~ 7 years, particularly compared to the 80's. In addition to the cost of the blades we often need to factor in the restoration and papering costs, not to mention the time spent studying. In my view this is all a labour of love and I think we'll only fool ourselves if we try to "make believe" we're also being clever with this hobby because of some possible investment potential. The Compton collection sale was an obvious exception though, but the conditions under which it was collected are unlikely to occur again.

 

 

 

cheers, Ford

[Jean]

Economy crisis is no good for Japanese sword market.

 

It is a very narrow one, people buy low to medium stuff, so I would say it follows the trend offer/demand.

Low stuff see prices increasing, medium sword stay equal, good stuff has seen prices lowered (no buyers), just high end stuff (Juyo) could avoid loosing money but not all. Somme very good ones by very good smiths.

 

On Aoi Art, within 2 months, you had 2 juyo koto wakizashi (o suriage blades) one by niji Kunitoshi and the other one by Kagehide (this one having been discussed in Kantei quizz N°7).

They were sold in a twinkle of the eye and worth the investment.

And they will find new buyers if they are put to sale bu not sure a lot of bucks can be made out of this taking into account currency variation/Inflation.

 

If you have money, considering subprime crisis, the best will be to invest in Real Estates in the States, I have heard that prices are really cut down. Within 5 to ten tears you could make a lot of bucks

 

Conclusion :

 

Renoir, Dega, Van Gogh are better investments - (BTW, I love Goya)

 

If you want to make money, try getting swords at garage sale and resale them to make small bucks as was saying Milt. The secret is simple : keep on buying at low price, sell quickly making small profit and you will accumulate money. Never keep the stuff :quick Buy and resell

[Jacques D.]

Hi,

 

 

Jean,

 

Renoir, Dega, Van Gogh are better investments

 

You compare these artworks with low/medium items sold by Aoi-art, it is a little bit "osé" dared.

 

In fact, it exists a market for very high level swords and none of us (not me in all case) can afford to enter into it. Lately, was sold an Inoue Shinkai for the low price of yen 53 Millions,

 

I was told one of the best collection in the world is in Saoudi Arabia. This kind of person will always have enough money to afford what they want whatever the cost.

 

In conclusion, yes nihontô can be a good investment but only at the very high level.

[Jean]

Jacques wrote :

 

You compare these artworks with low/medium items sold by Aoi-art, it is a little bit "osé" dared

 

 

You are presuming my friend, I don't think that these juyo I was referring to on Aoi Art website were low to medium items.

 

Concerning low to medium items, I was referring to what is often found on the web, e-bay, in garage sales and BTW by quite a lot of Japanese dealers (not an Aoi Art exclusivity).

 

In fact, it exists a market for very high level swords and none of us (not me in all case) can afford to enter into it. Lately, was sold an Inoue Shinkai for the low price of yen 53 Millions,

 

You read in diagonal and too fast :

 

I wrote :j

ust high end stuff (Juyo) could avoid loosing money but not all. Some very good ones by very good smiths.

 

 

 

In conclusion, yes nihontô can be a good investment but only at the very high level.

 

You give the Shinkai example (a sword), I give several ones which were the last auctions held in England. I let you check in the post how many Juyo, Tokubetsu juyo remained unsold :

 

viewtopic.php?f=6&t=3085&st=0&sk=t&sd=a

 

So much for the thriving high end sword market.

 

Now talking of money and investment I am not an expert but I let NMB members decide for themselves what they would prefer :

 

getting at a garage sale :

 

either a Van Gogh, Dega, Renoir

or,

a Go Yoshiro

 

My choice is done, I get the van Gogh, sell it an buy tenth of Tokuju swords.

 

This is a question of offer and demand, and above all of market - Japanese swords market is so small/narrow that you'll never get the return on investment you can get with paintings

[Ford Hallam]

I think we need to be clear by what we mean when we say " a good investment". I took that to mean a way of putting your money into something ( in this case a sword ) for a period of time and watching the market value of that object increase ahead of inflation. Simply finding things to buy at a relatively cheap price and reselling for a small profit is merely being a merchant.

 

Dealers, on the other hand, buy swords at reasonable prices and resell them to us for a wildly inflated profit

[Brian]

Hi A Stenbar (a first name would be nice )

Just to answer your one question about the price of that Aoi wakizashi..

$1400 for a wakizashi with koshirae from a reasonably respected dealer with a return policy and no real condition concerns seems like a fair price to me. I see it is on hold for someone.

Although gimei (and assuming you just want a fair price and not a huge investment potential) I would say it isn't a bad deal for someone just wanting a sword to own. It isn't high grade, but a heck of a lot better than a project wakizashi and can be enjoyed as is.

I don't think you will find a dealer selling something vastly better at that price. Just my opinion.

 

Brian

[Jacques D.]

Hi,

 

Jean you speak about present conjoncture (2008 sale), investment in art is not speculation, on a long time the value increase (how much was a Kunihiro worth in the fifties?)

 

Recently was sold a saber owned by Bonaparte price € 4 000 000, if a meibutsu like the Dojigiri or the Mikasuki were for sale, it's a safe bet that it would worth a Van Gogh.

 

You are presuming my friend, I don't think that these juyo I was referring to on Aoi Art website were low to medium items.

 

There is good and less good juyo, some are attributed on a name more than the blade itself.

[Ford Hallam]

Hi Jacques,

 

investment in art is not speculation, on a long time the value increase

 

This statement of yours isn't always true at all...the history of art collecting is full of examples of dramatic falls in value of, once, highly regarded art. In any case comparing meibutsu to a "van Gogh" doesn't really prove anything because these are such extreme examples. To make the point you need to use more generally applicable examples not the exceptional ones.

[stenbar]

Thanks all. Maybe I need to refine the question a bit.

 

If you (personally) have purchased and sold a sword, I'll assume that you sold it for a higher amount. Percentage wise, what was the increase, and how long did you own it? Has anyone ever seen any metrics on the nihonto market over a given period?

 

Instead of having the "Van Gogh vs. Nihonto" discussion, we should combine the two. Witness the birth of a new art form "Van Gonto" (see attachment) - he did slice off his own ear with something & I'm betting it was with a katana. The first $2 million bid walks away with this lovely piece of history.

 

I'm already investing in real estate, stocks, and wine. I've always been interested in nihonto and am curious about valuations. I'm also curious about the "food chain" of the market. Where do the dealers get their blades? Directly from the public, or are there wholesale vendors for the dealers?

 

By the way, I went ahead and bought the waki.

[Carlo Giuseppe Tacchini]

I'm already investing in real estate, stocks, and wine.

...OMISSIS...

By the way, I went ahead and bought the waki.

 

 

quote from the "First time buyers Dojo Kun"...

 

9) Be prepared to lose money. Don’t put money into NihonTo thinking they are an investment unless you really know what you’re doing or you really roll into the money. Better if both requirements occur together.

 

...unquote (sorry Brian, couldn't resist).

 

I like the idea of investing in wine.

Have to ask Jean to suggest me a good "Cote xxx" or a "Chateau yyy".

[Bob M.]

Collectors tend to use a number of different justifications for making a nihonto 'investment'.

 

' As soon as I saw it , I knew it was destiny ' - to oneself.

 

' I am protecting it for future generations ' - to ease a guilty consience .

 

' If you want that new handbag/dress/bathroom then it's only fair that I have a tsuba/tanto/juyo ' - to the boss .

 

' If I hadn't spent the money on this , then it would have been wasted on something with no residual value ' - like that car that desperately needs replacing .

 

We all know realistically that there is not much chance as a collector of making money from nihonto - where the heart rules the head , there seldom is. If the head rules ,then where is the passion ? You are then in big danger of being the person who :

 

' Knows the cost of everything , but the value of nothing '

[Bungo]

The few times I sold sword, I actually lost a few hundreds each.

 

oh well..........

 

milt

[Baka Gaijin]

Good Morning all.

 

The Art Newspaper has collated World Fine Art auction prices realised for over 20 years and every year publishes the previous year results together with a retrospective.

 

http://www.theartnewspaper.com/

 

I regard Nihonto as Fine Art BTW

 

 

Malcolm

[Brian]

I think that many, if not most, collectors are dealers to a small extent. This is only because as we upgrade our collections, sometimes we are forced to part with something we like, to purchase something we love. Unless you are rolling in cash (and to be honest, if we were, would we be on an internet forum or just travelling to Japan each month?) you sometimes have to bite the bullet and part with something to get something better. Sometimes we don't purchase a sword with the intention of selling it, but it becomes necessary. However fulltime dealers are in a different league and I wonder how easy it is to part with so many swords without too much emotion, and continually "flip" them over and put the money into the next batch.

It isn't easy to make money off swords. How many (Western) dealers are there that do that full time and are able to survive off the business? Most of the internet dealers have other jobs or have folded.

This is especially true of dealers and collectors in countries like the USA, UK, Australia etc. In these countries, there are thousands of swords for a buyer to chose from due to the number of servicemen that were in Japan during WW2 and swords continue to come out of the woodwork.

In countries where there are fewer swords (SA, some of Europe etc) swords fetch higher prices due to the fact that there is a demand and yet fewer swords available. As an example, in SA if 2 swords come up for sale locally a year, that is a lot. Prices are higher than in the USA and I have made some money off selling lower end swords when I am upgrading. But it only takes one bad purchase to wipe out all the accumulated profit, so it is a huge risk.

All the main collectors here agree that it is a bad idea to try and collect purely for profit. There are indeed safer options. Most are happy if they put their money into something and a few years later are able to recover their money.

Yes, the very top end swords fetch high prices, but there really isn't a huge shortage of top end swords. If you had $500K to spend, no doubt you would have a choice of quite a few swords in Japan. That is a lot of money to put into something that is handled though...something which can rust, scratch, break or experience a downturn in the market. And to vaue it, you would have to be a seriously advanced collector that can appreciate it yourself...and not just take the view of the seller. In other words, when you play at the top end to make money, you need the knowledge and experience to back that up.

 

As mentioned, in the common markets such a eBay, you are more likely to make money off low end swords. Mid class swords barely sell, and top end only sell if they are a bargain. So unless you have the ability to travel to Japan or sell on high end auctions, you aren't going to make money.

 

Luckily, most of us have given up the idea of making money off our collections, and just collect for the enjoyment of Nihonto. Yes, we all want to know that when we sell we can at least recover our money. That is natural and nothing wrong with that. You don't put half your life savings into something that is a financial loss. But profit? Hmm...

 

Carlo quoted an excellent point. What it comes down to is that you can always expect and hope to recover your money/break even, but if you are looking to make serious money, Nihonto isn't the right avenue unless you already have the money and knowledge to play in the top league and even that is a huge risk. Rather buy gold or platinum for the long haul (many years)

 

Jacques wrote: "investment in art is not speculation, on a long time the value increase (how much was a Kunihiro worth in the fifties?) "

That is very true, but what is the buying power and actual value of that money nowdays? If you paid $5K back them, and it is $30K now...what is the value of that money nowdays? Anyone in finance will probably tell you that it is worth a similar value now as it was then relatively speaking. The only exception is the days when tsuba were sold by the barrel full and swords were worthless. But that is past now, and isn't going to happen again.

 

At any rate, I expect the original question wasn't about investing in the very top end of the sword market. Low end to mid level swords (we are talking about these, right?) are unpredictable and risky. To realise full value, they need to be in perfect polish and papered. That costs money and could expose flaws etc. It's a real rollercoaster.

 

As for your question about dealers. The ones in Japan get their swords from the public and lower end dealers. The ones in the West either put their full effort into advertising to the public, or have dealers in Japan they sell excess stock for. That relationship takes years to build. Every year more swords come out of estate sales and disappear into collections. Those are the "good deals" but once in a collection and researched, they usually don't go back to being "sleepers" and as the veterans pass away, there are fewer and fewer of these. The number certainly isn't going to increase over the upcoming years.

 

A long and rambling post. basically what I am saying is that be a collector who sells to upgrade. Being a pure dealer is almost impossible unless you have huge money and contacts, and preferably a side business.

 

Brian

[Jean]

Brian wrote :

what is the buying power and actual value of that money nowdays? If you paid $5K back them, and it is $30K now.

 

Very Easy to know for real estate, in my case, i baught my flat exactly 88 333 Euros in 1983, I sold it last April for 310 000 Euros. I have taken the tables to see what is worth a Euro nowadays compare with one 25 years ago (of course I converted Francs in Euros for the year 1983), if I remember correctly, my net profit value is of 7,8% over 25 years .....

[Carlo Giuseppe Tacchini]

Brian wrote :

what is the buying power and actual value of that money nowdays? If you paid $5K back them, and it is $30K now.

 

Very Easy to know for real estate, in my case, i baught my flat exactly 88 333 Euros in 1983, I sold it last April for 310 000 Euros. I have taken the tables to see what is worth a Euro nowadays compare with one 25 years ago (of course I converted Francs in Euros for the year 1983), if I remember correctly, my net profit value is of 7,8% over 25 years .....

 

Real estates prices bubble explosed in Italy a couple year ago, dramatically dropping the value.

We're always late in everything...

 

This recalls a lot (IMHO) good NihonTo prices too, in a much lesser scale as far as numbers goes.

"Up and down, up and down, the market dance is always that..." (translated doesn't sound as well as in italian).

[Bungo]

quoting " The graduate ". Mr. Robinson said......" plastic ".

 

Little silly me thought he meant plastic, the material .Little did i know he meant " credit card ".

 

 

Did I get it wrong ?

 

I lost money mostly in sword ( so far ), that's because I was selling swords that I spent $ on polishing and cannot " recover " the restoration expenses.

Why did I sell them ? That's because the swords were not exactly the type I like After polish.

Sort of like marrying the old fashion way when one did not get to see the bride till after the vow had been exchanged..........sucks if she turned out to be an old cow with a personality to match.

So.......the lesson I gained regarding sword is to buy /collect what you like and what you can see from day one ( polished, in good condition ). So if divorce ever comes, it won't be nasty.

 

Fittings are easier, in my opinion, usually no restoration fee. I made some $ ( but not much, Froggie ) and no hassle in shipping or any sort of weapon regulation.

p.s. as Brian ,the Despot whose power has been usurped by " diplomacy " , conluded...... this sword selling is not for the faint of heart and making $ is tough.

Buying retail and selling wholesale ( sometimes ).......arrhhh

 

milt

[micko]

g'day

i have a collection of over 30 of mixed nihonto after 25 years of collecting, all lower to medium in grades i think in profit i have doubled my money. but to pick a sword from your collection to admire and enjoy that has been part of your posessions for 20's years give or take,this is the true profit for me.there are a lot better options if profit is the goal.