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I have been thinking of this for some time, especially as I used to have a nice guitar that would have appreciated in value.
In 1982 I bought a new Gibson Es-175. The list price was $1399, though I recall paying quite a bit less than that, more like $8-900. Accounting for inflation, the list price today would be $3071. The current list price for the ES-175 is $3600, or 20% over 1982 list price in today's dollars.
Finding the market value of a used guitar is always an iffy proposition, but recent auctions on Ebay for a similar vintage guitar were $2200 to $2400 (I will use higher figure for comparisons).
Now, as the Dow was about 1000 at that time, if I had invested that $1400 in a market-indexed fund, I would have seen my investment increase by 1200%.
I have to conclude that if I had bought my guitar as an investment, it would not have kept up with inflation. It would have lost 22% of its value over that time period. It was also a very poor investment vehicle compared to other avenues like indexed stock funds.
I can't believe I spent that much for a guitar at age 21--I guess I didn't have to worry about house payments, alimony, etc., etc. However, I wish I still had it for reasons that have nothing to do with the money...Last edited by Doctor Jeff; 05-03-2010 at 08:15 PM.
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05-03-2010 04:39 PM
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Well- as a financial investment, buying a stock "good" guitar is not a wise choice. However-as an instrument-18 years use and only that much depreciation is excellent. If you'd bought a cheaper guitar it might have depreciated by 80% and have been falling to bits.
Jeff-it was a good buy. Compare it to another major investment you might make-a car. Is there any stock car that you could have bought then that would have only had that much depreciation and still have been servicible for it's original intent?
You bought it because it was a great guitar-it still is. For a guitar to be a good financial investment it has to be rare or custom-something out of the ordinary.
Don't sell it!!!
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Didn't you read my last sentence??
Originally Posted by billkath
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Nah!!! I always figure-Better days are just around the corner, and you'll own it for the right reasons soon.
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Yeah, but it's easier to avoid paying tax on gains with personal property. Guitar players don't issue 1099's.Now, as the Dow was about 1000 at that time, if I had invested that $1400 in a market-indexed fund, I would have seen my investment increase by 1200%.
I have to conclude that if I had bought my guitar as an investment, it would not have kept up with inflation. It would have lost 22% of its value over that time period. It was also a very poor investment vehicle compared to other avenues like indexed stock funds.
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05-03-2010, 11:13 PM #6TommyD Guest
What's that old saw about knowing the cost of everything and the value of nothing? I bought a low serial # Selmer Mark VI alto sax in 1972 for $600. today it's valued at about $6,000, BUT . . . I've enjoyed playing it for well over 30 years. How do you place a value on that?
My ES 165 cost me $1,800 new. today it's worth . . . .who cares! I love it! I play it every day, and think about it and my playing of it when I'm not.
And if I had to buy it today, I wouldn't hesitate a minute. What's money for?
Tommy/
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+1 on all that, Mr. D. Whoever said money can't buy you happiness is ignoring guitar purchases............. Originally Posted by TommyD
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I am a hobbyist guitar and amp collector. While I enjoyed your financial analysis of your 175, it begs the question of why you would think that a 1980's production guitar of any make would appreciate in value? There would be no factors that I could think of that would drive such a guitar up in value. As someone else pointed out to you, factor in that you had a musical instrument that you could enjoy for the time period that you owned it, and that you didn't LOSE as much money as you would have had you bought a car with the same money and a different picture arises. You can't hold a stock certificate in your hand and get any use out of it.
Certain guitars will continue to appreciate in value and investing in the "right" guitars have proven to be better investments than the stock market. Just like you can't compare any arbitrary stock to the stock market, neither can you compare any arbitrary guitar to it.
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Point taken. Actually, I didn't believe that my guitar would appreciate that much, but there are quite a lot of different opinions on how much certain guitars are worth, and I thought it would be interesting to analyze the price of a guitar over a long period.
While I agree there may be certain guitars that appreciate faster than the stock market as a whole, I still think this a risky investment strategy for the average person.
A few years ago I set out to make some money buying and selling antique hand planes (mainly Stanleys). After a good year-and-a-half of this, I found that I had made 15%. In my opinion this hardly justified the effort of going to local auctions, watching Ebay, trying to outsmart the less-educated bidders out there, fixing up old fixer-uppers to sell at a profit, shipping the things all over the country, etc., so after I had accumulated a good 20 or so "users" I stopped.
Of course, guitars have their own pleasures, as most of the enjoyment comes from playing them, not owning them or selling them. But that just reinforces what many people have said, that the value is more in the intangibles than the monetary value.
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I understand both your concerns and your personal experience with the hand planes (interesting idea by the way). Originally Posted by Doctor Jeff
Point taken. Actually, I didn't believe that my guitar would appreciate that much, but there are quite a lot of different opinions on how much certain guitars are worth, and I thought it would be interesting to analyze the price of a guitar over a long period.
While I agree there may be certain guitars that appreciate faster than the stock market as a whole, I still think this a risky investment strategy for the average person.
A few years ago I set out to make some money buying and selling antique hand planes (mainly Stanleys). After a good year-and-a-half of this, I found that I had made 15%. In my opinion this hardly justified the effort of going to local auctions, watching Ebay, trying to outsmart the less-educated bidders out there, fixing up old fixer-uppers to sell at a profit, shipping the things all over the country, etc., so after I had accumulated a good 20 or so "users" I stopped.
Of course, guitars have their own pleasures, as most of the enjoyment comes from playing them, not owning them or selling them. But that just reinforces what many people have said, that the value is more in the intangibles than the monetary value.
If we think about this logically, though, it is easier to understand the guitar market. Let's take your 1980's 175 as a case in point. First, as far as I know, the 1980's were not particularly noted for superiority in guitar-making. Possibly even the contrary. Second, there is no event associated with that era or the guitar in that era (ie. the 'invention' of rock n roll, Woodstock, folk music, hippies, flower-children). The chances are great that ES-175s made today are at least as good, if not made better, than ones from the 1980s. Third, those guitars are all corporate-built and are not associated with a singular name (ie. Leo Fender, McCarthy, Les Paul) in their building or designing. Other than the fact that one could argue that the 30 years that have past may have broken the guitar in or melded the woods and glues a little more than a new one, there is nothing about that guitar that would make players/buyers/collectors pay MORE for it than a new one.
The vintage guitar market is arguably based mainly on perception and little else of substance, granted (intangibles, as you called them). So is the stock market, by the way. Unless you invest conservatively by buying across the board (as say an indexed mutual fund does for you), the risks are probably the same as the guitar market. If you invest in Apple stock alone today, you'll be paying a high price for it. If they continue to come up with iPhones and iPads, you'll do very well. But, as soon as they introduce one hyped product that fails, well, you know.
You want to invest in the guitar market (after all, it is much more fun than stocks)? Here's a "tip" for which I take no responsibility. There is one particular sector which has continuously gone up, has never had a 'bubble', and is not likely to 'burst'. Listen carefully because I'm only going to whisper this once...come closer...
...the vintage acoustic guitar sector. While it has never seen the huge gains of the electrics, they have never fallen down either, and they are starting to move up faster now as more people move away from the crazy electric market and into the acoustic market. So, if you have the bucks, buy a couple of VG or better condition 1930's Martins (6 figures btw). Being a little more realistic (and by a wide margin financially), grab a 1940's acoustic Martin or Gibson or two. Getting into the '50's or '60's Martins/Gibsons will probably pay off, it will take a lot less money, but will take a little longer to realize gains. Flattops will probably pay off a lot more than F-hole jazz boxes in the long run, though I suppose there can be exceptions to that too. The mid-'60's and beyond start to bring some of the same concerns that amps suffer from: large corporate takeovers and a move away from hand-built quality to mass production techniques become an issue to collectors. There's a huge difference in the perceived value of a 1967 Fender amp than in a 1968 of the same model, not to the players, but to the collectors. And then to the players by 1969-70, just as a 1964 Strat has a much greater value than a 1966 Strat ('65's are a grey area).
The thing about the early acoustic guitars is that they probably WERE made better. And with woods that are now unattainable. And all by hand- no CNC machines, and often start to finsih by a single builder. They may likely be compared to the Stradivarius as a violin.
Just some stuff to think about.
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When did a new ES-175 cost $3600????? I always thought it was around $2400. They bumped it up 50% at some point!!! Did they get wind of how the Sadowsky's and Benedetto's price their laminants?
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The MSRP is $5,087: Gibson - Gibson Guitar: Electric, Acoustic and Bass Guitars, Baldwin Pianos
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That guitar is from the Custom Shop. Originally Posted by BigDaddyLoveHandles
The price I quoted was for a standard 175 on Amazon. List price is also $3599 at Dave' Guitars locally for a Gibson Memphis ES-175 Reissue.Last edited by Doctor Jeff; 05-10-2010 at 04:52 PM.
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I see. The Gibson web site seems to have the categories "Gibson Custom" and "Gibson USA". But I can't find the regular ES-175 on their web site (besides the Epiphone ES-175). Does this mean they are not currently making ES-175s?
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Your 1980's Es-175 cost 1300 in 1980 based on production costs plus profit...the 2010 es-175 is based on....production cost plus profit. It simply reflects pricing inflation but no accretion in value.
I know nothing about planes, but a 15% return in a year and a half is a great return on investment...the stock market has returned 8% annaully since 1900...I would love a 10% annual return with no taxes..
As a matter of fact, the collectable guitar market has returned 12-15% annually...better then T-Bills, Bonds, stocks and has now surpassed real estate in average return on investment over a long investment period....much like artwork. They had a great segment on the Wealth Channel on collectable guitars that I happen to watch.
Croth is 100% right...if you are going to buy a guitar, buy some thing that at least has a chance of being or is collectable.
Personally, I have come to the conclusion that I would rather put the instant gratification in check and instead of paying 1500 for an Eastman, save up a more and buy an older Epiphone or Gibson from the 1960's or even a never hand made US archtop..I am sure they will be worth more in 10 years than the Eastman....and just as fun to play!
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I think all Gibson archtops and semi hollows have been "custom shop" products for a couple of years now, and this includes the ES-175. Whether this reflects the reality of production is only marketing trick, I have no idea... but I'm skeptical: the ES-339 would then be a $2,000 Custom Shop Gibson. Originally Posted by BigDaddyLoveHandles
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there are other "missing" guitars there too.
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nice post. i can't imagine a laminate guitar appreciating at all, as a matter of fact. why would it? Originally Posted by croth
in 1980 i had a chance to buy Mundell Lowe's beautiful, sparkling "new", violinburst D'Aquisto for $3,500. the year is now 2010.
ahem.
buy carved instruments, and the right ones. buy a Benedetto "from
Bob's workbench" or a Monteleone, NOW while the economy is in the shitter.
http://www.benedettoguitars.com/bb-cremona-18.php
oooohhh man.Last edited by fumblefingers; 05-10-2010 at 11:42 PM.
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Last edited by kawa; 05-10-2010 at 11:51 PM.
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05-10-2010, 11:49 PM #20TommyD GuestYou sound like my nephew, Adam! He's so into it he writes a column for a woodworking magazine. Originally Posted by Doctor Jeff
Point taken. Actually, I didn't believe that my guitar would appreciate that much, but there are quite a lot of different opinions on how much certain guitars are worth, and I thought it would be interesting to analyze the price of a guitar over a long period.
While I agree there may be certain guitars that appreciate faster than the stock market as a whole, I still think this a risky investment strategy for the average person.
A few years ago I set out to make some money buying and selling antique hand planes (mainly Stanleys). After a good year-and-a-half of this, I found that I had made 15%. In my opinion this hardly justified the effort of going to local auctions, watching Ebay, trying to outsmart the less-educated bidders out there, fixing up old fixer-uppers to sell at a profit, shipping the things all over the country, etc., so after I had accumulated a good 20 or so "users" I stopped.. . . . . . .
tommy/
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Obviously I agree with the "carved wood" opinion, although an observation about laminated instruments might be appropriate: the resin in ALL wood product eventually solidifies with age, even in laminated woods. Originally Posted by fumblefingers
Older instruments sweeten in tone, becoming lighter and more resonant. (The presumption is that internal details have been properly attended to and the adhesives and construction techniques are tried and proven.)
Observation clearly indicates that certain laminated instruments always appreciate in value.
This is a good subject.
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i'm stumped. which ones Randy? (not PAF armed 335s from 1960 i hope) Originally Posted by randyc
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LOL, actually mine was a slightly later vintage than that and was sold for $300 in 1975 to a wiser man than me. It also had the factory-installed Bigsby (which I thought cool at the time). Semi-hollows obviously do not "improve" their tone with age - at least not to me, some would probably dispute that statement.
Although the ES-330 isn't a good example of appreciation (because they were discontinued they continue to gain in value) it IS a good example of how even a thin guitar can improve accoustically with age. The ubiquitous ES-175 appreciates (except for very modern ones) and that guitar also improves tonally as it acquires some years.
Incidentally, in the referenced links above (appreciation of American guitars), I did not use any of the "collector's" references to obtain values. I went to gbase.com and averaged the values that I found there to obtain the 2009 "standard" value.
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My take on the whole thing is that buying high-quality guitars is always a good idea, but don't expect a standard off-the-shelf guitar to maintain its value relative to inflation. It won't depreciate as fast as a cheaper copy, obviously.
Collecting is near and dear to my heart, but it is a slippery slope and a tricky business. The problem is that with Ebay and the internet, it is very hard to get an advantage over other collectors. The days of making awesome "flea market finds" is for the most part over, because all those old guys at the flea market stand or corner antique shop have access to tons of information and millions of buyers thanks to the internet. The guitar market, like the tool market, is mature, and so you have to work hard to make a little money.
I would also point out that it is very hard to predict what will be worth a ton of money in 20-30 years. Price is often based on rarity or uniqueness, which may not necessarily be a point in favor for someone who wants to actually use a product.Last edited by Doctor Jeff; 05-11-2010 at 10:27 AM.
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Fashion is a significant factor in resale value. I got peanuts for a very playable pre-CBS Jaguar - before all the grunge bands made them desirable! Originally Posted by Doctor Jeff
High-quality "luthier" guitars can also be a resale gamble unless your luthier's guitars happen to be "desirable" when you come to sell. And as for partscasters - well, you can build a great guitar but there is very little resale value there in my experience ...
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