Once a vintage guitar becomes a commodity, what's the point?

Jack_

So another thread on here got me searching into the vintage market, and I saw an article about how all the really sought after expensive stuff basically becomes investment pieces, they're bought by someone to sit on for a few years, and then sell on, presumably to another person that sits on it for a few years and sells it on, and so on and so on.

I understand this is how stocks and trading works, but with a guitar, you have this situation where people keeping buying this same guitar over and over with the hypothetical idea that eventually it'll be sold to someone who actually wants the guitar for the guitar, but that may never happen because the guitar becomes too valuable to just write off, hence the guitar effectively becomes meaningless, it's just a stock, despite also having so much meaning that made it so desirable in the first place.

It's quite a strange paradox, and at the end what's the point of it all? Theoretically this guitar can keep being sold from person to person who doesn't even care about it and just puts it in storage, and it's price can keep going up, despite no one with an actual interest in the guitar itself, wanting to buy it.

Discuss.

roberty

It's history, isn't it.  Like anything in a museum.  You wouldn't go hunting with a neolithic arrowhead.

carlos

I understand this is how stocks and trading works

Stocks go up and down depending on company performance or expected performance. It's not just speculation like the price on a vintage item. There's also dividends in some cases.

It's quite a strange paradox, and at the end what's the point of it all?  

The point is having something you can drop your money into where it might grow in a somewhat risk-free and reliable way. Same as paintings - nobody's hanging their Monet in their living room. For the latter you can lend them to museums and then the museums pay the insurance and storage of it. Isn't it great being rich?

CMW335

Not all vintage pieces will end up solely as investments. These guitars are sought after by some for superior workmanship, build quality and materials which are no longer permitted for use when making guitars as well as being steeped in history etc like the previous poster said. Some will be bought solely for playing, some for investments and others like mine are both. 

There are plenty of guitars lying around unused all over the world be it vintage, modern, cheap, expensive etc. Those with severe GAS end up with more guitars than they have time to play for example.

SteveRobinson

Luckily there are lots of modern guitars, better made than vintage ones, that we can play instead.

JezWynd

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

carlos

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

https://en.wikipedia.org/wiki/Tulip_mania

Gassage

As a point of order, the non vintage market is far more commiditised than the vintage one.

The definition of a commodity market is one where the buyer rather than the seller defines the price.

Moe_Zambeek

SteveRobinson said:

Luckily there are lots of modern guitars, better made than vintage ones, that we can play instead.

Absolutely agreed.

guitars4you

CMW335 said:

Not all vintage pieces will end up solely as investments. These guitars are sought after by some for superior workmanship, build quality and materials which are no longer permitted for use when making guitars as well as being steeped in history etc like the previous poster said. Some will be bought solely for playing, some for investments and others like mine are both. 

There are plenty of guitars lying around unused all over the world be it vintage, modern, cheap, expensive etc. Those with severe GAS end up with more guitars than they have time to play for example.

without going in to a long essay - that is about right

JezWynd

carlos said:

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

https://en.wikipedia.org/wiki/Tulip_mania

I don't think the tulip market is really comparable. Guitars are tools at the end of the day, no matter how much some people choose to fetishise them. Tulips?... Their value was more ephemeral, more analogous to gold, only not as permanent, so not as much value in the long run. They did serve as a signifier of wealth I suppose, much like guitars in some quarters.

Sporky

Guitars aren't tools to everyone. 

designerseye88

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

I've often thought about this. When i was at the GH auction the other month i looked around and without being rude noticed most were 50+. Im 29 and their were very few of my age in there. I do think the vintage market is mainly older buyers so i do wonder in 20-30yrs how this market can be sustained. I guess it is similar to the vintage car market, although cars are more accessible as most people can drive. I'm not sure of the figures but it appears beginner guitar payers could be on the decline so this could impact future prices. Like any market prices are linked o supply and demand. Dealers tend to be quote clever in holding guitars. Norm Harris seems particularly smart with this. He has a lockup full of vintage and rare stuff and will collect as many as possible so he has a monopoly on the market. (without sounding too mean and morbid) when these dealers die off their families will have no use for the instruments and will most likely sell them off. I personally think prices will come down or at least bottom out int he future just difficult to know when. 

guitars4you

designerseye88 said:

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

I've often thought about this. When i was at the GH auction the other month i looked around and without being rude noticed most were 50+. Im 29 and their were very few of my age in there. I do think the vintage market is mainly older buyers so i do wonder in 20-30yrs how this market can be sustained. I guess it is similar to the vintage car market, although cars are more accessible as most people can drive. I'm not sure of the figures but it appears beginner guitar payers could be on the decline so this could impact future prices. Like any market prices are linked o supply and demand. Dealers tend to be quote clever in holding guitars. Norm Harris seems particularly smart with this. He has a lockup full of vintage and rare stuff and will collect as many as possible so he has a monopoly on the market. (without sounding too mean and morbid) when these dealers die off their families will have no use for the instruments and will most likely sell them off. I personally think prices will come down or at least bottom out int he future just difficult to know when. 

This question has been asked many many times over the years - I don't disagree with your thought pattern at all - But all the time this thought pattern has gone on, prices have generally risen, with only a few odd blips in between - I can easily recall a good refin 62 Strat selling for 4K with original parts (so only negative was the refin - no other issues) and I'm talking about within the last 10-15 years - As it happens I can recall the same guitar for under £400 but that was 40 years ago

Yet equally in the last few weeks, I've sold an early 60's Epi Olympic and an early 60's Gibson 330, granted both 'molestered' so players grade, but both went to players in their 20's and both purchased them to play

One thing I can guarantee is that the supply of vintage guitars is not increasing - No one is making any more of these genuine vintage pieces  (Excluding fakes of course)

blobb

Classic sports cars got there first. Would you drive this? - a genuine Group B rally car that was never used. Some dilemma, if you could afford it.

Branshen

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

I'm 26. I can't wait for all of you oldies to die and then I'll scoop up all the custom shop guitars for cheap. 

crunchman

Branshen said:

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

I'm 26. I can't wait for all of you oldies to die and then I'll scoop up all the custom shop guitars for cheap. 

By then you'll have kids so you won't have the money. Buy guitars now while you can.

usedtobe

Branshen said:

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

I'm 26. I can't wait for all of you oldies to die and then I'll scoop up all the custom shop guitars for cheap. 

Not if we kill you first!

Bigsby

designerseye88 said:

JezWynd said:

Guitars are looking like risky investments these days. With all the fakery, relicing, plus the core buyer base aging and dying. Surely there'll come a point when the bottom will fall out of the market for all but a few iconic pieces.

I've often thought about this. When i was at the GH auction the other month i looked around and without being rude noticed most were 50+. Im 29 and their were very few of my age in there. I do think the vintage market is mainly older buyers so i do wonder in 20-30yrs how this market can be sustained. I guess it is similar to the vintage car market, although cars are more accessible as most people can drive. I'm not sure of the figures but it appears beginner guitar payers could be on the decline so this could impact future prices. 

And also, younger players are not so caught up in the nostalgia of 50s/60s/70s instruments. Currently, there is a bulge in the market of people who value instruments from those eras. As collectors, they're proving the old economics rule of 'bad money drives out good', i.e. they're holding onto the 'best' vintage instruments, whilst circulating the 'less good' ones. But when their collections come onto the market (their kids won't want 50+ guitars), the demand and supply ratio will change... At this point, only the instruments that have truly passed into investment-only territory will have a chance of sustaining their prices. 

The broad 'vintage' market may still offer good investment potential for a decade or so, (assuming global economic stability), but beyond that, I think it's pretty risky.

Bridgehouse

Young people will grow old. 

As they do, some nostalgia will kick in, but they will discover older music, gain disposable income, and a share will get into vintage.

I doubt today’s antiques nuts we’re into antiques when they were 18.

richardhomer

I’m not sure I buy the ‘once the old guys are gone, no one will care about vintage guitars and prices will plummet’ argument. There are plenty of collectables  (cars, watches, art for example) where buyers weren’t around when the things were made.

That said, I’m about to sell a vintage guitar, so it’s understandable that I’d marshal an argument in favour of price maintenance....