"Boutique Instrument Bubble?"

[Swandoline]

Are we on the verge of a "Boutique Instrument Bubble?" Similar to the "realestate bubble", or the "dot-com bubble." Everybody kept buying realestate, and dot-com stocks, thinking the values just keep going up. Hey, I've heard "Things are worth what they are going for.", but are they really? Isn't this why these bubbles pop eventually, because the values were bloated? Let's get our popcorn ready.
:confused:


Tried to move to "General Mandolin Discussions".

[Mike Bunting]

I guess it's an issue if you see mandolins as an investment which I think is tacky. I bought my mandos to play music and that's my only consideration.

[JEStanek]

No. Most folks don't buy their mandolins as investments. Rather, they are bought to be played. Loars may be an exception. Also, I think rather than seeing prices escalate rapidly (even while mandolin player numbers seem to be increasing) there are many builders who are building more for the tighter market now. Specifically, I mean the increased number of independent builders who make econo, flat top, or primarily A style instruments.

I rather doubt you'll see a spike increase or precipitous drop in mandolin prices anytime soon.

Jamie

[sgarrity]

Two threads about expensive mandolins in one day. Hasn't this topic been beat to an unrecognizable bloody pulp already? Buy the best you can afford and play the heck out of it!

[delsbrother]

I am still waiting for my first issue of Mandolin Aficionado to arrive..

[Mike Bunting]

Two threads about expensive mandolins in one day. Hasn't this topic been beat to an unrecognizable bloody pulp already? Buy the best you can afford and play the heck out of it!



yup.

[peterleyenaar]

Two threads about expensive mandolins in one day. Hasn't this topic been beat to an unrecognizable bloody pulp already? Buy the best you can afford and play the heck out of it!

Mea Culpa Shaun, I started the other thread not being aware that this topic as you say" been beat to an unrecognizable bloody pulp already".

I started that topic out of shear interest, perhaps you could let us know which topics are not deemed appropriate

[peterleyenaar]

yup.

Another contribution

[MikeEdgerton]

This does come up from time to time in one form or another. Mandolins for the sake of investment are probably pretty rare. The majority of people that buy them buy them to play them. Some buy them to look at them as well. If you buy anything as an investment it has some risk associated with it. I see some builders offering less expensive models with less ornamentation to compete in a down market but I don't see anyone's prices taking a dive.

Some past threads that relate to this:

Thread 1 (http://www.mandolincafe.com/forum/showthread.php?60577-Is-a-7500-Mandolin-6500-better-then-a-1000-Mandolin&highlight=investment)
Thread 2 (http://www.mandolincafe.com/forum/showthread.php?33601-Crazy-prices&highlight=investment)
Thread 3 (http://www.mandolincafe.com/forum/showthread.php?57152-Is-a-Gil-really-worth-over-twice-an-Ellis-or-Altman&highlight=investment)

[Swandoline]

I second the Mandolin Afficianado! I love the guitar version. That magazine is probably responsible for a couple of my purchases. I don't see how viewing an instrument as a potential investment has to somehow diminish your love of playing it or music.?? Geuss you always have your self-righteous idealist.

[mandolirius]

I second the Mandolin Afficianado! I love the guitar version. That magazine is probably responsible for a couple of my purchases. I don't see how viewing an instrument as a potential investment has to somehow diminish your love of playing it or music.?? Geuss you always have your self-righteous idealist.

There's really no need for name-calling. This topic usually generates some heated discussion, which you well know as evidenced by your "popcorn" comment. Even the site owner has stated on several occasions that he doesn't see the value in starting these kinds of threads. You say you can't see how treating an instrument as a potential investment has to somehow diminish one's love of playing music. It doesn't "have to". Those are your words. But it can. I think you know that. Anyone who's seen a great instrument living in a glass case does. You seem to have a chip on your shoulder. You don't offer any reason whatsoever for why you're starting this thread, you advise folks to get their popcorn ready and then you get defensive and insulting when people don't want to play the game.

[mandroid]

16th century Violins and Cellos by prestigious makers are holding value ,
at a much higher level than even Precious Signed Loars.
YoYo Ma's Strad Cello is valued at a Mill+ as I recall..

[mrmando]

Yes, there is a collectible instrument bubble, by gum, and we are not on the verge of it, we are already in it. In the mandolin world, it's most evident in the soft market for Loars. Declines have been much more precipitous in some segments of the vintage/collectible guitar market ... because many more people collect guitars than mandolins, and I think the speculation/investment mindset is more common in the guitar market than the mandolin market.

But, barring worldwide financial catastrophe, I don't expect a sudden drop in the prices of new small-shop mandolins. The $399 Dudenbostel just ain't gonna happen.

Fretboard Journal will suffice as an aficionado publication, methinks.

[Swandoline]

Well, I started the thread because I spent alot of time searching for a last stop instrument and was amazed at the extreme prices. I bought a new instrument that msrp'd for $7200, and sells advertised for $6500, for $4200. That's alot of mark up in instruments. I believe there is 100% mark up these days, or retailer's cost is 50%, however you like to look at it. This has just led me to think we are on a bubble of sorts. Yes, I knew some would have passionate opinions. Some don't like to think for a second that they ever paid too much for anything. Sorry no "chip", too blessed and not stressed. Praise Jesus!

[Mike Bunting]

The $399 Dudenbostel just ain't gonna happen.
.
Maybe we'll see a $399 THE Dudenbostel. :)

[MikeEdgerton]

Well, I started the thread because...

Take a few minutes and review the posting guidelines. They are here (http://www.mandolincafe.com/forum/faq.php).

[allenhopkins]

Definition of a "bubble" is when there's such widespread, unbridled demand for a particular good, that prices inflate well beyond any reasonable market value for the good, as determined by its utility. This creates even further demand, as buyers predict that the prices will continue to rise, thus making that good suitable as an investment. Within a fairly brief period, potential buyers begin to realize that the prices are unreasonable; demand slackens, market prices decline, and those who bought when prices were most inflated, are facing major losses if they wish to sell.

I believe one of the earliest modern "bubbles" centered around tulip bulbs in 18th-century Holland. To call five-figure prices for hand-crafted "boutique" (not my term of choice) mandolins a "bubble" is to create a mountain from a molehill. In terms of the cost of materials and the price of labor in the construction of a hand-made mandolin, few current prices would be called unreasonable. There are always those willing to pay a premium for a specialty product. Mark Deprez, who plays in my band Innisfree, is a gifted woodworker who makes a living mostly by crafting custom rifle and shotgun stocks. Every long gun comes with a stock already installed, but some avid shooters want one custom-fitted to their shoulder, or made from a particular attractive wood, or adorned with carving.

I'm satisfied to go into a dealer's and buy a mandolin off the wall, if I like it. Others want someone to build them a "one-of" with unique features. But how many such mandolins are made each year -- maybe a couple thousand, tops? How many luthiers are getting rich feeding an insatiable demand for "boutique" mandolins as investments?

I do think some prices for vintage instruments are screwy. Quarter million for a '59 Les Paul sunburst -- I can't see it. Nor can I understand $100K for a '56 Strat, or $165K for a refinished '40 D-45. Loar prices intimidate me, despite the veneration in which they're held. But there's a limited supply, and a constant demand from collectors and affluent musicians.

And 100% markups on new musical instruments -- list price vs. dealer cost -- are nothing new. How do you think those on-line and mail-order dealers make money offering "41% discounts"? They can sell a $1K list instrument for $600 and still make a 20% profit, which ain't bad if you don't need to maintain a real store, do set-ups, trade-ins and repairs, or dress nice to meet customers.

So: "bubble," no. Interesting, and sometimes weird and frustrating, market, yes.

[pdb]

I believe Allen is correct in one sense. Bubble is probably the wrong term. I don't see it as a bubble. What I do see as a concern is the global economy. How the euro and dollar holds up, how we may go into a global double dip recession, how we may shed more jobs where unemployment or underemployment goes much higher while taxes go higher globally. If this happens, supply and demand will certainly play a factor and the demand will be less than the supply causing prices to either be adjusted accordingly or less luthiers in the business of making mandolins or other non essential goods (professional mandolin players excluded from this as theirs is an essential tool). I don't know about most of you, but I don't use essential income for my mandolin purchases, I use discretionary income. If discretionary income or job stability goes down, most of us will put off our luxury or non-essential purchases, not just mandolins. This could/should bring prices down. I certainly don't want to see this happen and I hope it is only pure speculation on my part. One would have to be an ostrich with their head in the sand not to notice what is going on around us globally. To say with absolute authority prices won't go down and prices of mandolins will hold up is quite naive imho. Loar prices being "soft" could very well be only the beginning. The market will tell us for sure.

[Chuck Naill]

There is no argument that the escalation in prices has been brought on by the older baby boomers. I have observed this in both vintage and custom instruments. Occasionally I will hear of a wealthy younger consumer getting caught up in the craze, but it's rare.

The fact is is that there are only so many of these consumers around and it stands to reason that a significant correction has come or is coming.

[Dfyngravity]

Mandolins seem to be a little bit like cars. Which ever one you buy, they all do the same thing. Some may require a bit more fine tuning while some don't require it at all. They all need regular maintenance to keep them in good playing condition. And they are all made to be played. At the end of the day, one may be worth more than the other and even increase in value depending on the demand and or stardom of the builder. Yes, you can even buy them to collect them and keep them in a glass case in mint condition.

All that being said, I don't think their really is a bubble, much like cars. It just depends on if someone really wants one and is willing to pay the money for it.

[red7flag]

I am one of those boomers. I love playing mandolin, but I also love buying them. I am in the process of selling four and buying one. The main reason, as was noted above is that musical instruments are meant to be played. I went on a buying craze, then found that a number were not being played. An instrument not being played, to me, is an abomination. When I was a banjo player, a book came out with a Japanese collector that had all these wonderful instruments in a hermetic environment not being played. It just seemed wrong to me. I have reached a bit of a peak. I bought an Ellis new and realized that I spent way more than my playing is worth. While I have improved substantially in my playing, I am no where near the value of that instrument. I love it and will keep it and will keep playing it and that is it's value to me no matter what it eventually sells for. By the way, one month after I bought that lovely Ellis, the dealer I bought it from dropped the price by about 1k and that is where it is now. This occured right after the first stock sell off. Bad timing on my part, oh well. I have a lovely instrument. Even at 1k less, it would be more than my playing is worth. The next level for me would be the DMM, MM, Dude, Monty level. At this point, I just don't have the drive to go there. And I would need a lot of drive to justify, for myself (I am single), going to that level. I am not saying it won't happen, but that at this point I am not inspired to.

[Big Joe]

Mandolin prices were escalating fairly rapidly through the 90's and 2000's until the economy crashed a couple years ago. There was a sharp drop in the price of instruments of all kinds, including mandolins. Prices were 25-35 per cent less than they had been just months before. This lasted for about 18 months and then the prices began to rise again. They have not risen quite as fast as before, but they are on the rise. As the economy continues to improve it is likely to see a similar increase in the prices of the better instruments.

On a related issue, the prices may have been escalating, but the market is still a bit slow on the mid price range mandolins. The expensive ones seem to be moving if they are the right product and the lower price continue to move well. It is the mid range (3000-6000) that are still moving slowly unless they have a certain name on the headstock. Those move very well. I think this is largely related to those who can afford the upper priced mandolins are continuing to purchase those. The economy has not been as much an effect on them and they are beginning to purchase what they want again. On the lower end, the beginner to intermediate player are getting into the mandolin (or guitar) and need an instrument coupled with the increase in quality amongst the products in that price range. The mid range will improve as those who have MAS continue to see their economic recovery become a reality. The desire is still there, but often the comfort with spending that amount is not quite even with the funds available. As the economy continues to improve and those unemployed return to work, the market will continue to improve just as it always has. Just my view of the situation from the inside.

[AlanN]

No. Most folks don't buy their mandolins as investments. Rather, they are bought to be played. Loars may be an exception.

Agreed.

I do know of one fellow (LL owner) who, when Gilchrists were in the 5-8K range, ordered 2 from the builder. I asked him why. He said 'Purely as an investment'. Smart boy.

[MikeEdgerton]

If a Gilchrist was in the same price range today there probably still wouldn't be a whole lot of people that would jump like that.

[Dan Johnson]

Unlike real estate and a lot of other markets (as if I know anything about that stuff) the mandolin market is way too small for what you'd call a bubble... Everyone in this subculture knows everyone else... Or they know someone who does. Besides, the value is based on qualities that are too readily apparent. Even a six-figure Loar has qualities, historical and acoustic, that even a tenderfoot like myself can appreciate... I wouldn't worry too much about it anyways... That Gibson Goldrush isn't going to suddenly lose much value... Besides, most mandolins aren't worth enough to interest much serious speculation.

[Steve L]

Maybe we'll see a $399 THE Dudenbostel. :)

Dude-iphone

[JeffD]

What I do see as a concern is the global economy. How the euro and dollar holds up, how we may go into a global double dip recession, how we may shed more jobs where unemployment or underemployment goes much higher while taxes go higher globally. .

At which point the price of a mandolin is the very least of my concerns.

[Swandoline]

Allen, pdb, Chuck, Ben, red7flag, Big Joe, Alan N, and Dan. Thank you for some intelligent conversation and insight. That is exactly what I was expecting from the gentleman on this forum. I agree with alot of what was said. I do believe bubbles are caused by "perceived" supply being shorter than demand, hence why the bubble eventually pops. I guess bubble may not have been the best term. I know prices have dropped with the recent economy, but not on the scale I think they may. Do I think you'll trade your 24 Loar for a bowl of soup? Not short of another Holocaust. But do I see boutiques and high-ends dropping by 35-40%, especially with their current mark-up, yes.

Now, if this happened would it diminish my love of the sound of a mandolin in any form or fashion? Absolutely not. When Adam Steffey comes rolling in a beautiful mando line into a Dan Tyminski song, I don't know or care if it's on a $200 Kentucky made in China or Monroe's Loar. I just love the sound of that mando! I love Dan Tyminski's 46 Martin D-28, but I couldn't really tell you if he's playing that or the Beourgious he endorses. Don't care either.

Makes me wonder if people really buy expensive instruments for the actual better sound, or the ideas of them and their idols that play them. I'll admit to doing the latter at times. I will also admit that quality of sound comes at a higher price also. The question is how much of the higher prices are quality, and how much is idealism? I'll quit rambling and go play now! 8-)
:mandosmiley:

[JEStanek]

Here's an idea. Does a well cooked meal taste better off of bone china and sterling silver than Corell and stainless steel? People put money into things they value. Perhaps the greater value affects the experience of the moment? If you really value the mandolin and what it does for you and what you do with it, you might be more willing to spend much more even if you are the only one who can notice the differences. This isn't a matter of logical choice or investment economics. With my playing skill I should be happy and well suited with much more modest instrument. Instead I have, due to good fortune, several very nice instruments (still modest by some appraisals). To probably 95% of any pro players listeners, they won't discern a difference between a starter mandolin and a top of the line one. They also won't appreciate the effort required to get similar sound from the former that the latter yields more readily.

Jamie

[AlanN]

To probably 95% of any pro players listeners, they won't discern a difference between a starter mandolin and a top of the line one

Whoa, Nellie. Can't really agree with this. Even if the listener is not up on all the minutae the we pickers are, there are certain fundamentals: thin vs. full, shrill vs. resonant, tinny vs. woody. And these sound qualities/differences are even more pronounced to the ear on our little wonder than, say, on a banjo or guitar.

[JEStanek]

I'll stand by my assertion. If I weren't told they were all playing the exact same mandolin and guitar, I would bet the instruments were different with many of the tracks on Tone Poets (for thos enot in the know, this is a Grisman produced disc of various players using his Loar and a PreWar Martin Guitar doing different styles). When Grisman played an Eastman F style mandolin on stage, he still sounded like Grisman playing a mandolin. Amplified at a concert, I still bet most listeners wouldn't know the difference between a brand X and Brand Y instrument. This has been my experience. You're free to disagree, don't get me wrong. I'm just happy when people know that a F style and a flat top with oval holes are both mandolins! I'll also add that the listeners will like the mandolin playing the song they know/like better (if its the thin sounding cheapy or the complex chest ripping chopping boutique one).

What you're describing reminds me of folks talking about cigar flavors. Unless you have some knowledge about them they just stink ;) (Or Scotch flavors or Shiraz from different valleys in South Australia, or whatever your passion may be).

Jamie (Nellie) :)

[Links]

It seems interesting that many of our members that have higher priced instruments insist that there is no way that mandolins will experience a "bubble". Heck, I am one of them, and believe me I don't want to see a bubble, but I am not naive enough to think it could not happen. It may not happen like the housing bubble or even the electric guitar bubble, but we sure could see some configuration of it. Presently, however, it is hard to imagine a Gilchrist, Dude, Nugget, etc. getting too low before someone snaps it up. I think the Loars are in a little different category, as the have been soft for some time - but as a lot of creme of the crop often does, the price doesn't go down, owners just tend to sit on them (i.e. keep them at a high price and just don't sell them).

If there is a bubble, I would think it would start by orders from "boutique" (don't likt that term either) builders starting to taper off and in some cases drastically. My guess is that it will hurt the lower to middle priced builders first and eventually make its way up to the top. I think in some cases it hasn't hurt now, as folks that have been on the builders lists do not want to lose their spot, many can still afford them, and some probably think they will be in much better shape in a couple of years when their mandolin is ready. I am not sure that I am unlike many of you out there, as I have saved enough for a higher end mandolin, but am holding on to the cash as I don't know how my work will evolve in the next year or so. That money may have to be used to pay bills if work doesn't pick up. When people are reluctant to spend moeny due to uncertainty!

Let's all hope that the bubble is not going to burst!

[goldtopper]

I don't think it'll burst. At least it hasn't since I joined the cafe and this same topic was covered then and many times since.

[JeffD]

Makes me wonder if people really buy expensive instruments for the actual better sound, or the ideas of them and their idols that play them. :

Most folks, the sound. Sound and playability.

That their idol may play that model can be the source of their inspiration, but I don't think most players shell out five digit numbers as a fan boy maneuver. They might decopage a concert ticket to the case however.

[Jim MacDaniel]

Maybe we'll see a $399 THE Dudenbostel. :)

How about "The Dude"?
(Although that might beg for lawsuits from both Lynn and Universal Studios. :confused: )

[JEStanek]

The Dude. It only comes in White Russian finish. But it has creamy smooth tone and a chop that'll make a 7 - 10 split. And it really ties the whole band together.

Jamie

[mrmando]

But do I see boutiques and high-ends dropping by 35-40%, especially with their current mark-up, yes.

Hogwash. Where did you cook up those numbers?

My guess: you're saying that because you lucked into a steep discount on a $7200 mandolin. I'm guessing you got it from a dealer who was feeling pinched and trying to stay in business ... but that pinch would have been due to the general economic situation, not to any boutique mandolin-specific "bubble." I can't think of any dealer, not one, that handles mandolins exclusive of all other instruments ... and there's just a handful of dealers who handle exclusively "boutique" instruments.

Besides, you can't infer a market trend from a single transaction. If you could, I'd be saying Vox instruments have been devalued 95% because of this transaction (http://honolulu.craigslist.org/oah/msg/1782289883.html), or that Gibsons are off 90% because of this one (http://reading.craigslist.org/msg/1765836956.html).

Boutique builders who build only to spec, or depend on dealers to sell their instruments, have already seen a slowdown, but I can't think of one that has slashed prices; rather, they're just having to live with mandolins not going out the door as fast as they used to. Builders who take deposits and maintain lists may be able to weather the storm until the economy picks up. Again, however, you don't need a "boutique instrument bubble" to explain conditions that are attributable to general economic trends.


When Adam Steffey comes rolling in a beautiful mando line into a Dan Tyminski song, I don't know or care if it's on a $200 Kentucky made in China or Monroe's Loar.
You may not care, but I bet Adam does. I'm sure Adam knows how to pull good tone from a $200 Kentucky, but it still won't sound like Monroe's Loar. And since Adam gets paid to sound good, it makes sense that he'd want the best tools for the job.

Makes me wonder if people really buy expensive instruments for the actual better sound, or the ideas of them and their idols that play them.
Why don't you ask Adam Steffey why he plays expensive instruments? I'm beginning to wonder why you bought a $7200 mandolin when you could have bought a Chinese-made Kentucky. Do you like the way your mandolin sounds, or did you just get it because it was on sale?

[mandroid]

Inflation of the General Economy is always with us, and so prices rise.
have rents dropped? beer gotten cheaper? :disbelief:

[Swandoline]

mrsmando, I paid that much because I understand that a guitar of a couple thousand dollars plays and sounds much better than a guitar of two-hundred. A better playing and sounding instrument promotes you to play more and learn more. This is exactly what I wanted out of the mandolin, to promote me to play and enjoy more. That being said, having owned several, I also know that a $10K Martin does not necessarily sound much better than a $2K martin, and if it did, by no means $8K better. Now, if I find the $200 mando that sounds as good as the Goldrush, I will sell it tomorrow and put the money back into my retirement account. Yes, the discount had a huge reason for me buying that instrument, goes back to being an investment also.

[pdb]

The rationality of armchair economists simply amazes me.
We have indeed seen deflationary times in several markets (real estate, automobiles, commercial, residential rental space, etc.). Unless you were born before 1934, this is the worst economic downturn of our lifetimes. The 73-74 recession was a cake walk compared to this. Don't allow a smooth talking politician (or music store owner with a vested interest to keep the public unaware) to sway you into thinking everything is on the upswing and simply rosey. We are not out of the woods yet....not by a long shot...I will not bore most here that have no interest in this kind of thing but I welcome anyone who would like to pm me to discuss this further.
Just continue keeping your heads in that sand...one day you'll have to come up for air!

[doc holiday]

I'd have to say that the "bubble" for mandolins burst in august of 2008 just like everything else. I know several builders of guitars and mandolins and their world changed just like everyone elses. For builders there has been several years during which buyers have been more cautious. People continue to be concerned about their jobs, and are more reluctant to buy big ticket items. If you see a drop in prices, it's in the sale of used instruments. The market is flooded with beautiful guitars and mandolins, selling at less than they did in early 2008. Virtually new Martin D18 Authentics and Collings D1A varnish guitars selling used for 4k. Pre 2008 we were in the heyday, and there are lots of players with multiple instruments and the confidence to buy more. I see lots of ads for instruments where people have tax, job or 'other' financial issues that cause them to sell instruments. The flood of used instruments has to have an affect on new orders. As for the prices of new high end instruments, I appreciate the costs and time involved to build a shop, acquire the tools, acquire the knowledge and skill to build great mandolins and amass a stock of the finest woods.
Steve Gilchrist, Mike Kemnitzer, Michael Heiden, Will Kimble and the other top-end mandolin luthiers live in same world as the buyers of their instruments. The prices aren't coming down, but i'll bet money that the flow of orders has slowed down. Single luthier instruments aren't priced to include a dealer, and the builders sure have a greater direct exposure to the fluctuations of the economy. But if you're really asking what the difference is between between high-end instruments and the Goldrush you got a great deal on, then you've got a great adventure ahead....

[mrmando]

Ah, so, it's a Gibson Goldrush ye bought. One problem we be havin' here, lubber, is you and me be operatin' with summat differin' definitions o' what be constitutin' a "boutique" instrument.

Big Joe can settle this question: Has Gibson OAI reduced what it charges dealers for its mandolins at any time in the past three years? -- or are the dealers the ones taking the hit by having to sell at lower markups?

P.S. I'm with doc ... the past couple of years have been pretty exciting for anyone with disposable income to spend on secondhand instruments. And while your friendly Frets-R-Us may have marked down its Gibsons, I still don't know of a custom builder who is charging less for a new mandolin than he/she charged in 2007.

Another question about Gibson OAI: that division is not a huge money-maker for Gibson, is it? I thought I read somewhere that Gibson makes most of its profit on its electric instruments and other divisions, and that OAI is pretty much revenue neutral.

[JEStanek]

I'm hoping the mrSmando thing was a typo. Lets stay civil in the discussion. If you feel realy hot. Back away and post a few minutes later.

Jamie

[sgarrity]

The fact that your buddy was willing to give you a good deal on a Goldrush has no bearing on the larger mandolin economy. Let me direct you to this thread you started:

http://www.mandolincafe.com/forum/showthread.php?62881-Gibson-F-5G-or-Goldrush

FYI, on the last thread of this nature Dennis form The Mandolin Store chimed in and said that they couldn't get their hands on enough instruments to sell. Look at their inventory, it's very low. I know of at least one Colligns dealer who says his business is as good as ever. There is an article in Details Magazine this month about how luxury items are still selling but people are less conspicuous about their consumption.

Things have definitely changed and used prices are certainly softer. But I know plenty of folks, myself included, who have bought new instruments in the last 6-8 months or have one or more on order. When I want to hear doom and gloom I'll tune into the cable news channel of my choice. When I'm on the 'cafe I'd prefer to talk about why we enjoy our mandolins and the music they create. Remember, it's about the MUSIC! :mandosmiley:

[mrmando]

The rationality of armchair economists simply amazes me.
Nine times out of ten, I prefer it to the irrationality of professional economists!

[Charlieshafer]

Yeah, let's kill of the economist aspect of the thread completely. I deal with hedge fund guys all day long, and my favorite lunch was yesterday, over a couple of chili dogs, with two fund managers. Both had completely different views on what was going to happen over the next year. One shorts everything, the other buys what the other guy shorts, no matter what it is, commodities, stocks, etc. They are both up exactly 17.8% year to date. Exactly. Economists never agree, or we'd all have exactly the same investments. Now, taking that to the mandolin front, no matter if there's a current bubble or not, check back in 20 years (after you've had the pleasure of playing it for a long time) and see where you stand. I bet you'll be perfectly happy. Wealthy? Who knows. The fortunes made in the 30's by those buying what over-speculators needed to sell are legendary. For a parallel, check out the Sack antique dynasty that was formed in the 20's and 30's. For almost 75 years, if you wanted great American antique furniture, you had to see Israel or Alby Sack. Most museum collections are made up of furniture purchased from them. Relax. Economists don't matter (professional or otherwise), bubbles or depressions only last so long. Just remember, if enough people don't sell in a "down" market, prices can't go down.

[MikeEdgerton]

I'm hoping the mrSmando thing was a typo.

I am too, we're kind of beginning to push the envelope on a few things here.

[Big Joe]

I do not believe Gibson has reduced its dealer pricing in the last years. Of course, production has not been very high in the past couple years either. Even companies like Gibson suffer during difficult economic times. The domestic market has been VERY challenging for them the past couple years, but internationally they have done better. How it is right now I don't know, but since two of their plants are not producing due to recent flooding, it will likely help them in the long run as dealers reduce inventory and help drive a bit of demand for the products...whether bluegrass or rock.

[Swandoline]

Yes typo. The Goldrush I just bought brand spanking new was buit 4/24/2006. Sitting around waiting on a purchaser for 4 years? I'm guessing production on at least that model has slowed.

[jimbob]

I don't know much about Loar prices, but they do seemed to have softened. I am surprised to see the value of mandolins in the 2-10 K range hold up as well as they have, however. If you use an instrument such as a Gibson F5G as a benchmark, they haven't gone down near as much as I would have expected to see by now. I bought a used Alan Bibey about three years ago and have yet to see one advertised for a price as low as I paid. The Bush mandolins in the classifieds are advertised at prices that don't seem to reflect a significantly softened mandolin market. Of course, advertised prices may be misleading. Knowing the actual sales prices would be a better guage of the market.

[pdb]

well said Jimbob. Also, dealers will feel the pinch long before the manufacturer. After the product is discounted to a point where the dealer can't make a reasonable profit to move the product, they will have to default on the quota required by the manufacturer to stay an authorized dealer. If enough dealers default, the manufacturer could either lower it's yearly quota requirement or lower it's dealer cost (extra dealer incentive...40 plus 10, 15 (B mark) or 50 plus 10, 15 (A mark), etc.) of particular instruments in order to sell them in a tight market. The suggesed retail doesn't have to change to squeeze less revenue to the manufacturer. There was a time when manufacturers would come out with one or two price increases per year. If a manufacturer hasn't raised their prices in a while, that's also a sign of a struggling economy and a soft market or stiff competition at that price level. The suggested retail price doesn't have to change or go lower for dealers and manufacturers to feel the pinch of a sluggish economy and a soft market.

[man dough nollij]

Dude-iphone

Strad-Dude-Lin? Or would that be -Lynn...?

[Links]

Nine times out of ten, I prefer it to the irrationality of professional economists!

Amen, mrmando! I am amazed at economist - they all can tell you exactly what happened the day after it took place. Pure genius!

[barney 59]

There is no argument that the escalation in prices has been brought on by the older baby boomers. I have observed this in both vintage and custom instruments. Occasionally I will hear of a wealthy younger consumer getting caught up in the craze, but it's rare.

The fact is is that there are only so many of these consumers around and it stands to reason that a significant correction has come or is coming.

Boomers are older and often more financially secure than younger people by and large. I think most economies are driven by who has the money. They are able to purchase items that they might have yearned for when they were younger but couldn't afford them then. Now they can buy the dream instrument or car or whatever and a lot of them did just that. The guy that desperately wanted a GTO or a sports car as a teenager now finds himself in the position to buy one. The non-professional musician that wanted a particular instrument-Les Paul goldtop or D-28 or a custom built F-5 had a little extra cash or at least credit and fulfilled their dream. Those same boomers are reaching retirement and the down turned economy is making many of them feel really vulnerable right now. 401k out the window and the social security statement telling them if things keep going the way they have been, and that is "if", that they'll receive a whole $1100 a month if they hold out until 67. The mortgage won't be paid by then and that is on it's own more their SS payment. We're tightening our belts a lot of us. Poor and young is normal,poor and old is scary stuff!
The investment/ collectors maybe see that the market has peeked and that their investment might not grow much or at a fast enough rate to suit them. That would soften the market. True collectibles were increasing in value by leaps and bounds, out performing most stocks for several years. This lead to instruments that really weren't all that choice or that rare but "vintage" to also increase. I always thought this was kind of a false market and would eventually hit the wall. The really rare stuff will mostly hold their value but as it turned out in the housing market that there actually was a top, maybe there is a top to instrument values and it may have arrived.