Ultra High End Mandolins...

[drbluegrass]

...Are mandolins such as a Red Diamond generally thought of as having good "investment potential"? Sort of like original Gibson Loar mandolins (obviously not to that extent)? Take for example, a Red Diamond "Crusher" at about $12,000. I know how they sound...they sound glorious. But is good financial investment potential an additional advantage to owning one, or not really? Just curious.


Tom

[JEStanek]

That's hard to guage, ya know. How many of us know who the next builder who's used work will have considerably more value than what you paid for it. Right now, I think you get that from a Gilchrist and a Dudenbostel. Even Hans Brentrup's mandolins, which aren't being built anymore and have a fantastic reputation for tone and build quality, are selling used for less than they were new. Gibson Distressed Master Models sell for less used too.

I think a better question to ask yourself is, can I afford to buy this mandolin and is it worth it to me to spend this ammount for this sound? If your answer is yes then go for it. If not, investment concerns are kind of minimal. How much are you looking for your investment to increase by? 10% 20% over how many years?

Jamie

[Capt. E]

One name I would add to the "possibles" list is Tom Ellis in Austin Texas. His previously owned instruments sell for only a modest amount less than a new instrument. Can't find prettier inlay, that's for sure.

[Mandobart]

I'm not an investor, beyond steadily plunking away a certain percentage of my pay into the company 401k every paycheck. Some folks recently found out that wasn't a great idea; but since I'm a few years from retirement...
Anyway, I figure if you want to invest in anything; stocks, bonds, real estate, etc. it pays to do some homework and learn about the market. I have not done such homework, but I would think that with the volume of mandolins, even good handmade mandolins, built each year, and the percentage of those that not only become worth more than the original sale price but keep pace with and even maybe beat inflation, the odds are against a person getting rich investing in mandolins.

[mrmando]

A few years ago a new forum member posted with a plan to "invest" in new mandos from eight top-tier builders (or thereabouts). I've been wondering how that's going for him. A diligent search might turn up the original post.

It's a very, very dicey game. If we could build a time machine, we could perhaps go back to the late '70s/early '80s and collect some Gilchrists, Nuggets, and Monteleones, then head back to the '20s and collect a few Loars ... and we might come out ahead when we returned to the present day. Trouble is, we'd have to be careful about serial numbers. If we somehow prevented Loar 73987 from being put on sale in a certain Florida barbershop, we might wreck the entire Loar market.

I'd have to do the math, but I'm not certain that today's prices for non-F5 Gibsons or Lyon & Healys are much beyond what you might expect from the rate of inflation.

I did have a chance at Monteleone Grand Artist for $7K some years back ... silly me, I passed it up. The price doubled within a year after that.

There is no way of knowing which of today's high-end builders will achieve legendary status in 30 years, just as no one in 1982 could have predicted that Kemnitzer, Dudenbostel, Monteleone, and Gilchrist would be selling mandolins for $25K thirty years later.

[bmac]

I am going to be cynical and suggest "If you have to ask the question you don't know enough to risk the money. if we could predict the ups and downs of the economy we would all be rich."

[Tom C]

Ask again in 80 years.

[terzinator]

If you want to invest, buy used. Shouldn't lose much value that way. Or buy a valuable one at a rummage sale. That always works out well. ;)

Might be that the Gilchrists and Dudenbostels and Ellises and whatnot will be worth a ton down the road, but they'll probably at least hold their value.

It's when there's a story to go with it, like Wayne Henderson and "Clapton's Guitar", or Lloyd Loar and Bill Monroe, or whatever, that's when you see things go a little crazy.

I know I've mentioned this somewhere before, but I think about it this way: Folks have no problem with plunking down $40K on a new SUV that loses $10K the minute they leave the lot. But if they found out I paid $5k for a mandolin, they'd probably think I need to be put in a rubber room.

Buy a year-old vehicle and a really nice mandolin and you'll have something to show for it.

Doesn't really speak to "investing" in mandolins, but it's probably more relevant.

[yankees1]

...Are mandolins such as a Red Diamond generally thought of as having good "investment potential"? Sort of like original Gibson Loar mandolins (obviously not to that extent)? Take for example, a Red Diamond "Crusher" at about $12,000. I know how they sound...they sound glorious. But is good financial investment potential an additional advantage to owning one, or not really? Just curious.


Tom Well------------I guess it depends on how many more mandolins Don MacRostie makes and how long he lives !! If he gets called up sooner than later than his mandolins probably are a very good investment. :)

[Paul Busman]

It may be hard to accept, but the mandolin's current popularity might not last forever...:disbelief: In that case, any investment value would be moot. I agree with those who say buy what you want to play (and can afford) and worry about the future when it arrives.

[Dfyngravity]

...Are mandolins such as a Red Diamond generally thought of as having good "investment potential"? Sort of like original Gibson Loar mandolins (obviously not to that extent)? Take for example, a Red Diamond "Crusher" at about $12,000. I know how they sound...they sound glorious. But is good financial investment potential an additional advantage to owning one, or not really? Just curious.


Tom

First off, as you know Don is building some fantastic mandolins. Some great players play them and they play them because of their sound. If you are asking will Red Diamond one day cost as much as a Dudenbostel, Gilchrist, ect....as many have pointed out, no one really knows. The prices have definitely been creeping up over the past 5 years or so but it's definitely too hard to tell.

[Big Joe]

One of the best investments one could make just a few years ago was a good mandolin. At that time Gibson and Dude's and Gilchrist were the best investments but a few others did pretty well too. When the economy fell off the top of the mountain instruments went with them. They did pretty well considering, but still saw a good decline in value. In tough economic times the people who can buy only do so when they can get a substantial value on the instrument. The rest have to sell and don't have the funds to purchase as they did just a few years before.

I have been watching the value of good mandolins increase again for about 18 months. They are closing in on pre recession values and have no reason to think they won't do well in the near future. However, that does not mean a particular instrument is going to hold its value. There are a LOT of issues in the discussion. Rarity, ability to duplicate, reputation of the builder, past history of holding value all play into this besides the economic issues of the times.

The best advice is to purchase a mandolin because you can't live without it. Get your investment back in pleasure from playing, owning, and looking at your prized instrument. If you can live without it, you probably don't need it. If it moves you to the point that you can't live without it, then it is worth whatever you paid for it. If you are able to sell it for more than you have invested in the future that is a bonus. Don't buy with the idea of future dollar value since that will always be an unknown until you actually sell it. After all, nothing is worth more than someone will dip into their pocket and pay you cash right now.

[Markus]

There's Big Joe with spot on advice ... like always.

Buy an instrument because you'll get the value out of it.

I'm guessing the local guy who bought a Kimble A a number of years ago likely could resell at a profit. Problem is, I doubt he ever wants to sell an instrument that great. I wouldn't.

--

There are more exceptional mandolins made every year, and the baby boomers are slowly getting to retirement [and eventual arthritis].

I would think, just based on demographics, that prices on mandolins will come down some when the boomers start selling their instruments off. The following generation is much less numerous - and the market for high-end mandolins requires a certain amount of financial savings to invest [probably not a lot of young families or recent college grads buying $10k+ mandolins].

Are there enough of us post-boomers that are old enough to afford to buy all the Gils, Nuggets, Dudes, etc when the current generation of collectors instruments sell off ... at a profit to them, in a reasonable time?

I'm skeptical. The great instruments will always keep value ... but figuring out tomorrow's great isn't always easy. The top names seem to hold value, but the `great but unknown' of today is a crap shoot.

--
Someone here in the past suggested that investing in something that is also a hobby is more likely to lead to decisions ruled by emotion than pure investment strategy. I completely agree, and suggest you invest in wine, collectibles, furniture, or the market ... you won't want to keep the most profitable item, and you won't let your feelings about things trick you.

[Charlieshafer]

Yeah, I think you buy it because you like it, and the investment is in the pleasure you get from owning and playing it. It's got to be a better investment than a car, as was pointed out, but not so great as buying Apple stock at $65. My personal feeling is that it's not a bad place to park money, assume there's no growth, and any loss on resale, if amortized out over 10-20 years, makes for a pretty cheap but incredibly rewarding hobby. Heck, how much do some people spend on golf clubs and green's fees each year?

[Jim Garber]

In the mid 1980s I paid top dollar for a Monteleone Grand Artist mandola. I played quite a few mandolas but John's was the only one that truly sung to me. I had to empty out a rainy-day savings account but even back then it was worth it to play a truly fine instrument. Of course, in retrospect, it is a sort of nest egg now. BTW I think Monteleone should be in the league of those high investment instruments mentioned above, esp after the hoopla from the Met Museum show etc.

[mrmando]

Anyhow ... in the specific case of Red Diamonds, the few times I have seen a used Red Diamond up for sale, it was not being offered for more than the new price.

[Wilbur James]

I feel if you are going to spend the money on a mandolin, be it Red Diamond, Hieden, Altman, Ellis....Ect...one it should be an instrument you truly enjoy and believe in, if you are just buying as an investment not an instrument of pleasure then you lose what they are intended to be. An instrument to create and play music with! Most all the builders we speak of may go up in value, but I feel If you have an instrument that gives you years of pleasure and it retains its value or at least close to it. That is an investment well worth the time, and the joy and pleasure you recieve is priceless. In the end if you decide to sell your instrument and get back what you invested, or maybe profit, it is a winning situation then you are possibly able to go to that next level instrument what ever that may be, Ghilchrist, Loars ect............

[JEStanek]

Mrmando, Have they even been within 10% of a new one in price?

Jamie

[mrmando]

Jamie: Not to the best of my recollection. But we're talking a very small sample size. Not many used ones available. One was distressed, economically speaking (owner had died and widow had no clue what it was worth).

[rico mando]

Invest in gasoline , its going to double in one year

[sgarrity]

You won't find a Red Diamond being offered over new price because he's still making them. They take a hit just like everything else. And it's definitely more than a 10% hit. Just buy what you like and play it!

[grassrootphilosopher]

...Are mandolins such as a Red Diamond generally thought of as having good "investment potential"? Sort of like original Gibson Loar mandolins (obviously not to that extent)? Take for example, a Red Diamond "Crusher" at about $12,000. I know how they sound...they sound glorious. But is good financial investment potential an additional advantage to owning one, or not really? Just curious.


Tom

There´s no really informative answer to this question because nobody can look into the future.

The past has told a tale or two if you listened. You can research for yourself.

About 10 years ago there was a rave about how great a mandolin was a wonderful investment. Gilchrists (F-5s) were on the classifieds here (and on Elderly and Gruhn) for about 24.000 USD, Dudenbostel F-5s were advertised here on the classifieds for about 27.000 USD up to 30.000 USD. About 2007 this started to change. It was even previous to the housing market crash - and it told me something about what was to come.

Ever since a new Gilchrist F-5 sells for around 21.000 USD. There haven´t been too many been made last batch. But there are quite some A-jrs and A-3jrs made by Gilchrist that sell for about 7.000 USD. There have been some atempts to sell a Gilchrist F-5 for more than the price of a new one (waiting time 1 year?) on the classifieds here. I doubt if these advertised prices were realistic.

Dudenbostel mandolins, though they do not come on the used market often don´t sell that easily. Dudenbostel himself has an A-5 on his website for about 17.000 USD that´s been there for over a year I think. Dudenbostel has started to build some no frills A-5 style mandolins that sell for under 10.000 USD.

Nugget mandolins don´t sell that easily for about 19.000 USD for an F-5 (look at Sandy Munroe´s website) and the new one in England has been there for quite a while. Nugget makes a "budget version" that apparently sells for a lot less.

I heard that a Crusher/Reischman/Osborne voiced Red Diamond A-5 style mandolin costs about 7.000 USD while the respective F-5 costs way more than 12.000 USD.

I heard that a Hershel Sizemore Loar F-5 style Altman mandolin costs more than 20.000 USD yet I saw one on a website for about 12.000 USD.

I think that the mandolin market is relatively unpredictable now. I also think that a stable investment is a mandolin that comes from a well known luthier. The best known luthier`s mandolins will hold their value the best. I´d say that´s Gilchrist, Kemnitzer (Nugget), Dudenbostel and Monteleone. But there are variables. I saw an early Loar style F-5 Monteleone for sale on the classifieds for about 17.000 USD. That´s nothing compared to a contemporary A-5 by Monteleone.

Other builders, while they may build stellar instruments may not appreciate well. Hans Brentrup is a good example. He apparently built wonderful mandolins - and I wouldn´t mind trying out an F-5C at all-. Yet the fact that he quit building mandolins pushed him away from the publics focus. Lawrence Smart obviously makes great instruments, yet Massimo Gatti - who has a hand in picking up great instruments - had a hard time selling a very special Lawrence Smart mandolin. There have been Nuggets on the classifieds that have been offered again and again with no takers for an okay price.

I think that this situation reflects that there are a number of great builders out there with a wide variety of instruments and prices and not many people that can afford an especially great professional mandolin.

See the Lloyd Loar mandolins at Elderly. They were offered at 250.000 USD three years back. Now they are down to 225.000 USD.

I think that the trend is that no frills professional mandolins by top tier luthiers will hold their value/improve the best. I wouldn´t invest in them though. Now is not the time for educated investment theories concerning mandolins.

[Mandobart]

This is similar to the American V-Twin motorcycle boom and mini-bust which started about 30 years back. When HD came back from AMF in the early 80's things were kind of tough. They had an improved product but were getting whupped by the competition. In about 10 years, by the early 90's, they had come back in a big way, fueled by a surge in popularity from many factors. Waiting lists were long. Other American made motorcycle companies emerged to help fill the void. By the early 2000's, however, things changed again. Many of those recent start-ups went under or severely scaled back (Excelsior, Henderson, Indian, Titan, etc.). One of the factors was it doesn't take long to saturate the market for $30k + motorcycles. After a couple decades, anyone who was willing and able to spend that much for a bike had already done so.

Maybe we're seeing the same thing with mandolins. There are a few players who are willing and able to pay over $10k for a mandolin. Other than wealthy collectors, there aren't too many who will buy several $10k + mandos. These are not consumable items; a player is not likely to need to replace his mando every 10 years or so. So every one that sells today reduces the chances that the next will sell tomorrow. At some point, which may have already been reached, this market will also saturate and everyone who is willing to spend that much money on an instrument will have done so. It takes a while for a customer base with that much discretionary cash to grow.

[Nick Triesch]

Here in San Diego hi end mandolins are sure not selling like a few years ago. Our top end guitar shop "Buffalo Bros" always had a ton of Collings, (sometimes 4-5 MF5's between stores) Weber, and a bunch of great used Gibsons on any given day. Now they are all gone off the wall. I think times are bad and also the demand for mandolins in general has just died away. Also another huge factor is that the online stores offer such great deals the "stores" cannot compete. Kind of sad. It was great fun to go once in a while and play them! Nick

[Tonear]

Some good points here about demographics and supply and demand. I have a couple comments.
Isn't there another huge population boom that is now reaching their 20's?
There seems to me to be a great deal of interest in mandolin and acoustic instruments from that generation. Inspired to a large degree by people like Chris Thile. Great Bluegrass players are springing up everywhere.
While they may not have the money now, a bunch of them will prosper in their respective careers and have discretionary money down the line. Won't they want to buy the mandolin Chris was playing when they first heard him?
It is pretty clear the boomers in their 60's are now unloading the instruments that inspired them, for retirement. The 50's Stratocasters and Les Pauls may never come back in value. But the next wave of boomers will have their favorites. It may be the video game they played in 1995. Or a Steve Vai Ibanez. Or a Dudenbostel. And there are a huge number of people in the next baby boom. Demand could be very high.
If I had to take a guess how that effects mandolins, I'd say look who is popular with the next generation. My money would be on Gilchrist and Dudenbostel.
TE

[Pete Martin]

I can't remember a mando selling for more than a new one from the same maker. Usually they sell for the same, a bit less or far less.

Price is a supply and demand issue. If a maker keeps building, the supply will increase. In tough financial times, demand decreases.

As far as "investments" go, they don't make old Gibsons or old Martins anymore. Those will always have value, even in the worst of times...

[Kheath]

Even though I dont know much about mandolins (yet), I do know collectibles. Generally speaking used anything, (unless you buy for pennies on the dollar) is not an investment, the high dollar items that retain or gain value are either mint condition (like baseball cards or comic books) , new in the box (like a limited edition firearm), or have some sort of value to the genre like a mandolin, with a documented provenance, stating it belonged to Bill Monroe, or one of Loar signed Gibsons, items like that. Or something that is valuable in its uniqueness, if you could document by provenance that you had the last Dudenbostel ever made, that would increase in value, like the Loar Gibsons. But me buying a dudenbostel, used, and trying to sell it for a major profit is not likely, unless I found one in an abandoned storage unit I won in an auction.
The other thing that determines the value of a collectible item is the market and its saturation point. This (mandolin/bluegrass community) is a relatively small population and honestly the number of us who could afford to buy a dudenbostel is small to begin with, who could afford to buy one that say belonged to Chris Thile as an investment, and then who could they sell it to, so it would show a profit.
So i would think that while it is a fun, unique, and interesting idea, its ability to generate an income is unlikely........Kevin

[chip]

Tonear, good post. I like your thought process. I have an antique store. I've noticed a dramatic increase in the availability of items coming into the shop the last year or so. I'm in a well to do area that generally the people bringing the items in don't necessarily need money but need space. Boomers are lightening their load, so to speak. the items that generally sell are those that are the cream of the crop in the Antique genre, Tiffany, Lalique, Gustave Stickley, etc. I think this holds true with the instruments, the cream of the crop will always hold their value, maybe not increase at a fast pace but still hold their value. This isn't a dress rehearsal so if one wants and can afford a handmade top of the line instrument, I say go for it. Knowing that you have something that will bring you confidence in re- sale and joy in craftsmanship, tone and playability goes along way and is truly a great investment in yourself.

[rockies]

It always puzzles me why musician hobbiests worry so much about spending money on a quality instrument in comparison to other hobbies. I live in the rocky mountain trench so the hobbies here are skidooing, boating , hunting fishing etc etc. Invariably my buddies spend $10,000 to $20,000 on their equipment (skidoos, seadoos, boats etc) plus trucks and trailers to haul them often in multiples for family members. Also equipment for each season. This equipment devalues at approx 20 to 30 % per year. Not to mention the maintenance and the fact that these items are seasonal. Now a good musical instrument (as good as your personal budget) requires little maintenance, you can use it every day year after year and it will probably hold a good part of it's value when MAS strikes. So why worry about investment, just buy the best (and I mean BEST) instrument that fulfills YOUR personal needs, personal taste and makes your heart beat faster every time you pick it up. AS I said befor we musicians are a weird group when we would think nothing about someone buying a $10,000 boat but we get totally paranoid about spending $2000 plus on a decent instrument for ourselves.
Dave

[drbluegrass]

I should reiterate, the primary reason I'm buying (now bought) a Red Diamond mandolin is the tone. That's 95% of the reason anyway. Being a relatively recent "convert" from guitar flat picker (I've played guitar for over 50 years) to mandolin, I'm not familiar with some aspects of owning a great mandolin. And I was just wondering if high end mandolins are currently a decent investment? However, as stated above, that's less than 5% of the reason I purchased my Red Diamond "Crusher". Tone is my main motivator for buying my mandolin. I probably don't have to tell most experienced mandolin players here how superb the tone of any Red Diamond is. Other factors such as reputation of the builder and his products, the quality of his instruments, whether there are any highly accomplished artists using them, etc. all figure in. But, for me, tone is the first thing that draws me to any instrument.
BTW, I got to play my new Red Diamond for a couple hours before laying it away. It was heaven. Got to play 2 other Red Diamonds, a Gibson Ricky Skaggs "distressed", and a Paganoni before choosing the "Crusher". They were ALL wonderful, but the "Crusher" really talked to my ears. I'll probably be picking it up within a month or so. Can't wait. Thank all of you for your very informative posts. Keep 'em coming.


Tom

[Rick Crenshaw]

When you say that you are buying for tone but are hoping it is a good investment, you may be overlooking one thing... wear and tear. Why care about tone unless you are playing it? Why have it if you don't use it? If you use you will end up putting wear and tear on it... which brings down the value.

I love my mandolins. I bought them thinking they would hold/appreciate in value, but after playing them for years now, I don't worry what they'd bring. Good thing too, because I've put mic dings, guitar headstock dings, dropped cell phones, batteries, and misc. things I had in my pocket on them. I've gotten to where I wouldn't dare play someone else's baby. One look at my mandolins and they wouldn't offer anyway. :-)

[mrmando]

I can't remember a mando selling for more than a new one from the same maker.
It happened with Gilchrist. He was locked into a certain price and had a wait of 4 or 5 years on his list. Demand went up faster than supply during that period. A fella could get a new Gil for which he'd paid, say, $8K, and flip it for twice that amount the next day. Steve stopped taking orders, built out the remaining instruments on his list, then started taking new orders at the new market price.

At least that's how I remember it.

[mrmando]

If you use you will end up putting wear and tear on it... which brings down the value.
Two words: Distressed Master Model.

I never was any good at math.

[RBMB]

Interesting posts. My first thought is buy it and enjoy it. If you really think this is the one, then don't pass it up or you may be very sorry. If you're buying from a well respected builder prices are going to keep going up, so buy it now while you can still afford it. I certainly can tell you've I've passed on buying items and they've later gone up in price to the point I can't afford them.

My first thought when reading the thread was: "You're not going to become a millionaire by selling it later on, but you might feel like a million bucks playing it." (Sorry, couldn't resist.) If you buy new, expect that if you have to sell in the next few years you'll loose some money. If you hold on to it, at a minimum the used value will go up with inflation over time and you might make a little money. If you're lucky, it might even go up quite a bit. But then you'd have to sell it to realize the gain. Hence, my point that you'll be glad you purchased it while it was still within your price range.

By the way, if you're really worried about not loosing money, try to buy one used.