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Thread: Hypothetical Gibson Question

  1. #1
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    Default Hypothetical Gibson Question

    Just a random thought. Say someone was to purchase about 300 Gibson mandolins (from ebay, gbase, craiglist etc...), do you think it would have any affect on the "market" for these? Either in desirability or value. I doubt anyone would do this though.

    Also, for around the same price you could have 1/2 or 3/4 of a Loar quartet. Which would you go for?

    Phil

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    Moderator JEStanek's Avatar
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    Default Re: Hypothetical Gibson Question

    I think you have a better investment in a group ownership of a Loar signed instrument. Gibson mandolins have been scarce lately since the flood and I haven't noticed (haven't looked) a considerable increase in their value on the used market. There are so many options in the new/recent used market now that removing a bunch of Gibsons from the market may not have any impact.

    Just my opinion with no data to back it up.

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    Registered User Hendrik Ahrend's Avatar
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    Default Re: Hypothetical Gibson Question

    Go seriously ahead, Phil!

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    Innocent Bystander JeffD's Avatar
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    Default Re: Hypothetical Gibson Question

    I agree with Jamie. I don't think it would make the slightest bit of difference. It would be fun though.

    If you are trying to corner the market on mandolins and thereby make some money, I don't think it would work, either buying 300 or buying a few Loars.

    There are so many non musical things that go into the market for vintage instruments. There are folks that spend their lives studying this stuff.

    I would be much more comfortable putting the money into a well managed fund about which you have some expertise, or giving it to a reputable financial services person.

    Also that way you won't fall in love with any particular instruments and screw up the whole strategy.
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    NY Naturalist BradKlein's Avatar
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    Default Re: Hypothetical Gibson Question

    It is possible for wealthy individuals to move the vintage musical instrument market, and it has happened in the past with banjos and archtop guitars. 20 million dollars would have no discernible effect on the market for many well known artists, for example, but if concentrated in any one sector of the vintage American musical instrument market, it would have a drastic effect. Obviously, the market for violins and such is very different, and much closer to the fine art market.
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    Registered User jmp's Avatar
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    Default Re: Hypothetical Gibson Question

    I don't think 300 is enough since it looks like there are thousands out there http://www.mandolinarchive.com/perl/...ndolins.pl?all

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    Fret less, play more! NoNickel's Avatar
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    Default Re: Hypothetical Gibson Question

    Ok, then make it a bit more practical. Take a smaller builder but much in demand, like Gilchrist, Ellis etc. Quietly buy up about 30 to 40% of their production (300 Gils would be about half of what he has built, but also more expensive than the Gibson scenario.). That certainly would affect the market for that brand.
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  8. #8

    Default Re: Hypothetical Gibson Question

    Interesting hypothetical! A couple thoughts I had: Actually my friend's comment that compared to the art world where Van Gogh's etc, go for $50 million etc., vintage instruments are a bargain. Or compared to car collecting, for example. Jay Leno's collection is worth more than any private music collection that I know of. Actually, there is a rumor at guitar shows that there is a man, and they never mention his name, sometimes calling him Mr. Big, etc., who supposedly has 300 plus 1958-60 Les Paul Sunburst guitars in his collection. ($300,000 each) He has a buyer who attends the guitar shows and curates his collection. My friend has sold to his buyer, but won't mention his name or the buyer's name, for privacy reasons of course. I asked another well known collector of Les Paul Sunbursts a couple years ago if he felt a Les Paul would someday sell for a million dollars? He response surprised me, he said, 'what makes you think they haven't already? The person buying it wouldn't exactly want to advertise it, would they?" I don't know if this is considered cornering a market, since the market is so elite to start with.

    On a similar note, 20 or so years ago, Scott Chinery came out of nowhere and started collecting vintage guitars and other instruments, paying top prices. A lot of instruments were sold to him at record prices, and dealers would state Chinery just paid $so and so amount for one, but the problem was there when another one was found, there was no second buyer at that price, so the market was artificially inflated for a moment. People also criticized Chinery's collecting strategy as having little rhythm or reason and concentrating too much on niche manufacturers. When Chinery died the collection was sold with most of the instruments selling for less than he had paid years before. Not sure if that was investing or merely an ego trip, like buying a sports team or something.

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    Default Re: Hypothetical Gibson Question

    On a more working man's view, a friend of mine collected Gibson Melody Maker guitars and has a bunch. His thinking was they were made from the same wood, have the same neck profile, made by the same craftsman who made the Les Paul, 335's etc...I told him 20 years ago they would never be worth much and never be sought after. Well, I was mostly right. Guitars he paid $400 for might be worth $1200-1500, but certainly not $20K or more. And I don't think they ever will be. Kinda of like Loar "era" instruments. Great stuff, but not an F5.

    Another thread mentioned Kurt Cobains effect on Fender Mustangs. Well, yes they did go from $400 to maybe $1500-2500 for the nicest one in the world, but never reached the prices for vintage strats or blackguards. And never will.

    Or like my friend says, the cheap stuff back then is still the cheap stuff now. (of course, taking inflation into account)

  11. #10

    Default Re: Hypothetical Gibson Question

    Quote Originally Posted by Jeff Mando View Post
    having little rhythm or reason
    That should be rhyme. I guess I'm not a lead player!

  12. #11
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    Default Re: Hypothetical Gibson Question

    Quote Originally Posted by Jeff Mando View Post
    On a more working man's view, a friend of mine collected Gibson Melody Maker guitars and has a bunch. . . .
    I wonder if he has mine. I bought it around 1972 for $50. Can't remember what happened to it, but I sure would like to have it back (but not for $1200-$1500).
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    Default Re: Hypothetical Gibson Question

    The reverse happens in record collecting on a fairly regular basis, where a 45 has only a few copies known to exitst, then someone does some research and locates a band member or a band member's family and an entire box of 45's surfaces. Suddenly there are 50 copies of a title that only three were known. If the seller is smart and sells them one at a time, the first couple will bring huge money and then everybody figures it out and a $1000 record becomes $40-50. When artists come out of retirement to play a festival, sometimes they bring merchandise for sale that has been in their closet for 50 years. Not knowning the collectors market, they sell albums for $10 that were going for $300 on eBay. A great deal for the fan who buys one! But, as with instruments, it is a small community and the word quickly gets out and the value goes down.

  14. #13

    Default Re: Hypothetical Gibson Question

    Quote Originally Posted by Jeff Mando View Post
    where a 45 has only a few copies known to exitst,
    That should be exist. Jeesh, I'm gonna fire my secretary!

  15. #14

    Default Re: Hypothetical Gibson Question

    Vintage A model Gibson mandolins were much more difficult to come by 30 years ago than they are today. Antiques Road Show got people thinking about granddad's old mandolin in the attic and ebay made it easy to unload them. Seems like there must be many thousands out there now and probably never cheaper (adjusted for inflation)than right now. Chinery's collection consisted of a lot of Larsen made instruments some of them one offs or Prairie States and Euphonons that are very difficult to find. One could possibly corner the market on Larsons if they had the mind to and the wallet. You could do it with Martin or Gibson maybe if you stuck to specific models maybe -Loar's or pre war D45's. You could corner the market on Martin 2-30's of which there were only 64 made and you'd still have nothing! I sometimes think that the Fender,LesPaul thing is a little bit of hype. A lot of people bought those in the 50's and 60's and those people are in their 60's and 70's now and quite a lot of them still have them under their beds not wanting to let them go for sentimental reasons. I go to these guitar shows and there is a guy that will have maybe 20 or 30 vintage Fender's on display--my thought is that with that many in one room at the same time that it doesn't seem to me to be something rare --also considering that I could probably find an equal number available from other dealers on the same day. With almost all of these American made factory built instruments that are considered rare and valuable, if you set out to find one you'll probably find one available to purchase and maybe in the same day that you launch your search. If you wanted say a 1950 Alfa Romeo Disco Volante it may take years before your purchasing agent can locate one. That's rare!
    Back a few years ago a Cobra went at auction for $350,000(a lot at the time!) setting a new record and standard for one. Carroll Shelby was shocked at the price and announced that he had something like 60 of them BRAND NEW and never assembled in storage which instantly quartered the value of any other Cobra out there.
    Had he kept quiet and dosed them into the market slowly he could have made a great deal more money although he probably didn't have to worry about money.

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    Registered User Mike Romkey's Avatar
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    Default Re: Hypothetical Gibson Question

    There may be legal issues with trying to intentionally manipulate markets. And markets are fickle. Lately there have been some real bargains in the classifieds, including mandolins going unsold. The market looks flat to me. I'm afraid if you bought up every $1-2k Gibson oval and every $3-4k (or whatever) G and every $5k Sam Bush, you'd end up with a bunch of mandolins worth what you paid for them. If you bought every available A Jr. for the next five years, I doubt there would be people willing to pay $7-10k for them, or whatever, when they can have a new, or nearly new, Ellis, Duff or Kimble F5 for that amount of money.
    '20 Ellis A5 Tradition, '09 Gilchrist Model 1, “July 9” Red Diamond F-5, '12 Duff F-5, '19 Collings MT2, ’24 A2-Z, ’24 F-2, '13 Collings mandola, '82 D-35, Gibson Keb Mo. http://www.bucktownrevue.com

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    Default Re: Hypothetical Gibson Question

    I have a fairly large LP collection and it turns out that hardly any of them are really worth very much. LP's seemed to disappear entirely for a bunch of years then record manufacturers realized that there was a small but valuable enough market for a limited number of LP pressings for new releases. Surprisingly some of my newest albums (to me,anything less than 20 years old) are some of the most valuable records that I have.

  18. #17
    Registered User John Flynn's Avatar
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    Default Re: Hypothetical Gibson Question

    Here are a few economic questions I would be asking about whatever part of the market you are trying to corner:

    Does it have unique historical significance that would appeal to collectors? Loars yes, the others maybe not.

    Are the products no longer available? Loars yes, the others no.

    Does it have an absolutely unique functional value? Said another way, if the price were too high, would most eligible buyers make the choice of another mandolin and be just as satisfied? I'm thinking that if someone cornered the Gilchrist market and I wanted one, I would be just as happy with a Dude, Nuggett, Ellis or three or four names.

    Does anyone absolutely need what you have cornered? Do they need it now? I'd say no for any of these. If you have artificially raised the price in a market, especially if people knew you were doing it, they could afford to wait you out until you could not afford the opportunity costs of holding the inventory and you would be forced to lower prices. If you could keep it a secret, it might work with the rarer items, but not for something you have 300 of. You would sell a few at inflated prices, but you would be stuck with most of them until you lowered prices to market equilibrium.

    There is a corollary to Murphy's Law: "Every man has a plan that will not work."

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    Default Re: Hypothetical Gibson Question

    Interesting discussion. But maybe I worded my original post poorly. My original thought was not about cornering the market. More like if these instruments did not exist. If there were 300 (or whatever number you apply to the discussion) less Gibson mandolins in the world.

    Phil

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    Registered User Gary Hedrick's Avatar
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    Default Re: Hypothetical Gibson Question

    In one of those "flights of fancy" moods I have wonder what I would do if I hit one of really big lottery prizes......going around stealthy buying Loars here and there sometimes through third parties.....slowly cornering the market.....I would think that 5 to 8 million could make a nice dent in the market out of an after taxes windfall of a $100 mil or so...

    Hang them puppies on the wall and have a good old time ...........yeah right

  21. #20

    Default Re: Hypothetical Gibson Question

    I'm sure glad this is a hypothetical discussion, cuz it is making my head hurt! For years vintage instruments were sold as an "inflation proof' investment, meaning they never lost money. And that may have been true for 25+ years of the hobby, but as the last 6 or years has shown, what goes up, can go down. Of course, if you bought in 25 years ago, you would still be ahead. But if you bought when things were high in 2005, 2006, 2007--you may be upside down. Then again, a musical investment still afforded you the pleasure of the hobby and playing a fine instrument--not a bad thing.

  22. #21
    Mando accumulator allenhopkins's Avatar
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    Default Re: Hypothetical Gibson Question

    IMHO major influences on the vintage market are [1] scarcity, with increasing numbers of buyers and dollars chasing a finite, non-expansible number of instruments, and [2] "fad" factor, identification with a celebrity player, raising prestige and visibility. Eric Clapton's playing Martin OM acoustics a while back had an immediate influence on the vintage market for those particular models.

    "Gibson mandolins" is perhaps too broad a category. A spike in new Gibson purchases might well influence Gibson Inc. to start making more mandolins, which would inflate the supply and suppress prices. Purchasing a significant number (300) of vintage Gibsons wouldn't have much effect, IMHO; there are 'way too many out there. It might coax a few more out of closets or personal collections, but there are tens of thousands of Gibson mandolins if you include all new, used and "vintage," and 300's not enough to tip that market.

    All this, of course, is opinion, semi-informed on my part. Only way to tell is for goaty76 to break out the credit cards...
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    Default Re: Hypothetical Gibson Question

    Can we try this experiment:
    - every Gibson-owning member of the forum, make a note of the current value of your instrument(s).
    - send your instrument(s) to me
    - go and buy yourself a replacement Gibson for each instrument you sent me.
    - (if you can't find a replacement, I will sell your instrument back to you, so there's really no risk)
    - was the price you paid for the replacement higher or lower than the note you made of the current value above?
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    NY Naturalist BradKlein's Avatar
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    Default Re: Hypothetical Gibson Question

    The late Warren Hellman - billionaire banjo player with the Wronglers - said in an interview that he had no great interest in acquiring rare and valuable instruments. And I thought to myself, that was a good thing for banjo players since he could effortlessly acquire virtually EVERY prewar 5 string in existence if he'd been so inclined. Instead he single-handedly funded the Hardly Strictly Bluegrass Festival for SF, the city he loved. And I believe that his estate will continue to do so. A much more impressive legacy, if you ask me - and a pretty good 'if I win the lottery' fantasy to aspire to!

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    Default Re: Hypothetical Gibson Question

    Quote Originally Posted by Jeff Mando View Post
    That should be exist. Jeesh, I'm gonna fire my secretary!
    I don't know if you realize but you can edit your post to fix typos.
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  27. #25

    Default Re: Hypothetical Gibson Question

    Thanks, didn't know. I will inform my secretary immediately!

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