How Wall Street will Disrupt the Guitar Market
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- Опубліковано 12 чер 2024
- Investment Banks and Hedge Funds are coming for Vintage Gibsons, Fenders or just about any rare guitar that is likely to go up in value. We discuss the reasons why and what you can do about it.
Link to my other channel 'Utkarsh Mohan' mentioned in the video as below
• How I retired at age 3...
I enjoyed this, and I agree with you... I come from the day (mid/late 1960's) when you could buy a used 1950's Les Paul Junior for under $100.00 US... I could have bought ten of them for less than $1,000.00 in Detroit, Michigan back then... now, that cheap student model guitar can sell for between $8K-$10K or more depending on condition and providence. The market has gone crazy. This is a great channel, keep 'em coming sir!
Your insights are tinted with your passion to guitars my friend. The vintage guitars market has been already well available for grabs if wanted. I've seen auctions of famous guitarists instruments being sold for hundreds of thou and over a mil - but those aren't some vintage guitars. It's similar with art, nobody pays millions for some vintage piece of painting just because it's old and unique - it needs to have an artistic value. So I'm not worried at all. The famous vintage guitars costing crazy money are there in the market. The standard vintage stuff will carry on with lower end market. Nice idea, but unrealistic.
Already happened with violins and is happening with comic books, vintage Rolex and Pateks, etc, and it’s bound to happen with sports memorabilia and other kinds of collectibles. I’d don’t love it because it distorts the joy of why people love these hobbies in the first place and prevent ordinary people from enjoying these keepsakes.
As always, an intelligent and insightful perspective !! I think you are right : Stradivarius investment funds already exist, and the number of 1958-1959 Explorers is smaller than the number of Stradivarius violins, so it all makes sense. Personally, I actually find it annoying that the prices of the vintage guitars have gone up so much: to illustrate : my neighbor came over with his 9 year old daughter. She looked at my guitars and wanted to try playing on it. I gave her an acoustic strat to take home and said : "Here, you can use it for three months and see if you like playing guitar". I would never want do that with a guitar that sells on Reverb for the price of a used car !! And that is a pity, because it is wonderful to see a child discover our shared passion.
yeah the only saving grace is that good quality instruments are getting cheaper in real dollar terms as the 'cheaper' new guitars are improving
To begin a guitar fund you simply determine the health issues that Norm from Norm’s Rare Guitars is dealing with and calculate an approach and offer for the hundred million dollars he has in guitars. Done.
I recently watched an interview with Boanmassa where he addressed some flack he gets regularly about all of the gear he has in his collection. He basically said that up until the 90’s there was the US, Japan, and Europe as the dominant guitar market. Going from a half billion people exposed to guitar and having the ability to get gear in the 90’s to a couple billion people today. I think this means that the cost of guitars will continue on an upward trajectory after this next phase of financial redistribution that the global economy is entering. With the initial phase beginning in 2008. We are really in a golden age of solid/ non-composite guitar production.
I don’t like it. I think I can see the perspective of this video. It is just a matter of time.
interesting idea, it could potentially happen. There some issues with guitars as assets though. First is valuation. Each of them needs to valued individually and no one guitar is like another. You take 10 1959 burst and they will have different prices due to condition, type of burst, provenance, modifications, etc. Perhaps you can say that on average they cost $300K, so your will be holding lot worth of $3million. This is quite small as investment for most hedge funds. Second, availability - where are you going to find so many rare guitars to invest into? Third, storage issues - large physical volume for fairly inexpensive lot. Lastly, the guitars need to be valued by someone each time you want to buy or sell...
This video was very insightful. If you ran a guitar fund you would be incredibly successful at doing it. Your channel would go from 4k Subs to 50k Subs.
Good information. Thanks for the video
Thanks
Very interesting topic!! I think if you have the money, and can find a good 59 original Les Paul (even if you don’t get the best price), if you are looking to hold long term, at the very least maybe 5 years but like 10 years or more. Those kind of guitars will keep going up in prices steadily I think. So it’s a very good item to hold to at the very least protect your capital.
By the way what do you think of bitcoin and what Michael saylor is doing with micro strategy?
Like your channel very much btw 👌🏻👌🏻👌🏻
Actually I'm thinking to get one or two more guitars and then have a 3 to 4 years hiatus of not buying gear. I realize my gear addiction has influenced the hours I spend playing guitar. It is something not many of us like to address but it is a reality and i rather seek to repair it.
This! I have the same problem. I like your approach. I think I’ll do something similar. I may get one more and then take a two year hiatus - it will give me some time to sell some guitars but primarily, I can actually focus on the playing instead of wasting time on reverb 😅
I think we have peak guitar quality BUT as we see with PRS, they are attempting to make cheaper guitars to stay in the market. The same will happen with Gibson.
I'm glad I bought my Gibsons when I did.
Good insight, on the financial aspect. As a player, collector & pawnbroker over the last 50 years I have some insights of my own... First, and foremost; the "industry" (if you will) far & wide is dependent on the local economy. Also, the "baby-boomer" effect is seen in other markets. For example, the collector car sector. The people who "trade & collect" cars pre-seventies are dying or in nursing homes. As a car enthusist and collector myself, I see this effect playing-out constantly. There is plumeting demand for anything that isn't very: "rare, desirable & celebrity owned". This translates to other markets. As another example, 50's "bursts" are always in demand by collectors. Beacuse they only made a few thousand. But prices for the majority, have leveled off and stayed stable, for the most part. And finding several on the market is not hard to do. Strats from the 50's on the other hand are seen in an abundant supply! And some at half the price they were even 15 years ago! So, unless you can find very, rare, desirable & celebrity owned or signature products? I wouldn't touch the thing! Unless of course, I wanted the guitar personally. I would look at just "who" is driving the market. If you have too much cash and don't want to risk the fiat & digital currencies? By all means. ANY collector guitar is a good, stable investment! But, for the average player and casual investor? I wouldn't advise it. Unless they join your co-op, "guitar fund"? Sounds like fun and a way to spread liability, if there is any? For me; Precisous Metal & Physical commodities are a better choice in this murky economic future. Enjoying your content & insight! Ron
@InjectBleach-em9tg ...I'm better at Math!
InjectBleach-em9tgor you can simply learn to read then maybe you would benefit from the wisdom being shared with you. Or you can be ignorant, obv your life your call no sweat off our backs 👍
Exactly my own dad has 6 classics that are rotting in the yard, he "bench races" all of them still talking about how they were the fastest cars at the ontario speedway in 1970 with no power steering, no power drum only brakes and fully boared out cammed out nitroused out, naturally aspirated V8's. I tell him its the fastest way to meet god nobody driving today wants a missile but he's convicted their worth 30k a piece.
@@zz-.- I appreciate the defense. One look at Mr. Inject Bleach home page pretty much says it all : "This channel contains No Content" Could be the abuse of bleach? I would've attacked my "speeling and punchuooation"! It's atrocious!! Ron
Great video! Would love to have a discussion about the fund with you 1:1
Mr Wonderful from Shark Tank has already been investing. I'm sure Joe Bonamassa, though he makes a lot of $$ doing what he loves, has some investors in Nerdville and Nerdville East as well. The market is open, but not as wide open as one might think, and with product dwindling fast, even guitar shops have investors that help them as well. Money begets money. Investment is the smart way to go forward.
The market is too small for wall street to get in.
I think you'd be right, if vintage guitars were better quality. A painting from the Layla album just sold for 1.2 million more than Clapton's most expensive guitar... both sold because of an association to Clapton, so why was the painting so much more valuable? The buyer knows based on the lightfastness ratings of the pigments used in that painting, that if they care for it, the painting will last forever! The same can not be said of any vintage guitar, in particular any Fender, Gibson, who used Nitro which doesn't offer much of any protection for the wood underneath, and I'd be surprised if they could even identify the alloys used for hardware which if they haven't rusted away to dust yet, surely will in the next 100 years, so buying a vintage guitar is like buying bread, it's an asset with an expiration date. Watches are a great example of what guitars could have been if the quality was better, but even guitars made today aren't worth investing in because they're made so poorly. Cars and time pieces that we see used as investments are made to a degree of craftsmanship that makes all guitar builders laughable by comparison... nobody is about to see guitars on a level with Violins, or pianos until the quality improves enough that there is a reasonable expectation they will last if well maintained. Anything painted in Nitro with pot metal hardware wont last no matter what you do to it... all you can do is consume it before its gone. These investors aren't dumb, they're smart enough to understand materials and hype, I doubt you see them even consider guitars amidst Gibson looking for a new owner and Fender slashing prices to compete with the used market... they're taking one look and moving on.
Yeah, yeah, yeah,. I get all that. But what about tonewood????
Er.... wrong video?
If you want to pay extra for tonewood go for it.
@@jamesmarkham7489 But I just spent all my discretionary income on Truth Social stock.
I have owned quite a few vintage Stratocasters from the late 60's and early 70's. They really are not that special. I would argue that many of the American made Fenders like the Performer and Professional 1 and 2 are better and more consistent. If you really need that worn feel just get some sandpaper. There is nothing magical about pieces of wood that are screwed/glued together. If you really hunt you can find SE and Squires that are just as good in all aspects as the aesthetically pleasing American Vintages and PRS 10 Tops.
I've thought about starting to collect pedals because i think they would look nice in a curio cabinet and you could have a pretty impressive pedal colleciton that only takes up a shelf unlike guitars which require entire rooms to house, i like the novelty of ones like the priority delay pedal, pussy melter, cock blocker etc but ones like the pg14 from paul gilbert or classics like mxr phase 90 or rat 808 tube screamers might not hold their values the same as usa guitar.
That seems risky, eventually those pedals will give out and the transistors or op-amps might not be available anymore
@@jasondorsey7110 good point
@@garyt3hsna1l82 I do collect bass guitars as a hobby, and I think it's better protection against inflation than just stowing away cash, but at the end of the day I don't think of them as investments, but just cool stuff I get to have fun playing that could also be sold if I ever get hard up for cash
Investment Banks and Hedge Funds don't understand the vintage guitar market. You may have more wealthy individuals at those institutions who spend their own money investing in private collections, but I don't see Goldman Sachs and the like buying up large swaths of vintage guitars. They're interested in securities, tradable financial assets with high liquidity.
I disagree. I think it is a sign that the market is peaking. This private equity entry into guitars is the tipping point. These investors will acquire all of this inventory and then have to sit on it because the supply demand is completely out of whack and getting worse as the "old accumulators" or their heirs will soon have to begin to liquidate.
What you are not accounting for is that the people who "assemble" these types of private equity deals ALWAYS make money. For themselves. They make it on fees and other transaction costs. They LOVE trendy subjects, and right now, guitars are a trendy subject.
Wall Street is famous for jumping onto a trend, convincing the gullible that it's the next big thing, and they make money in the process on fees. Then they bail out early if they have equity and leave the suckers hanging. It;s an age old game, being played on guitars (if you will allow that pun).
Ha
Joe Bonamassa
These greedy peoples time will be up soon and squiers will be the preferred guitar and be of the same value😂
All of it is a placebo effect! 😂
Soon, nobody will play guitar any more. Who can pay $10,000 for a beginner instrument, $5,000 for a pedal?
MARK AGNESI and Gibson destroyed rock & roll ....... he's the culprit.