Investment Grade Blades (Part I) – Tactical diversity in your art portfolio.

Artist Jay Fisher with Knife Blades Shown in ProgressOur topic today is the concept of an “investment grade blade.” Knives are by no means a neglected form of artwork, nor is their potential as an investment lost among collectors. The topic is, however, foreign to the majority of people outside the world of knife makers and collectors. You’re all aware that a painting can potentially go up in value, most of you know that a sculpture can become an investment. I’d bet that there is a good percentage of people who’s investment portfolios include items from the common art medias. My question is, have you ever seriously considered purchasing a knife as a tangible asset for your investment portfolio?

I’ll point out now, there’s no guarantee, if such a known fact came to be we’d all run out and jump on it to become wealthy overnight. Selecting a knife, and selecting the knife maker are just as important as when you pick a painting from a painter. The quality of the piece, the established name of the artist, potential growth of the style, everything comes into play.

This article will take shape in two parts. Part I will be a discussion about investing in an established artist. Part II will introduce the topic of investing in an up and coming artist, our case artist in this case will be Stacy J. Nabinger; Stacy is a college student who has been developing his skills in knife making for the past few years. He is now coming into the phase of his development where his handmade knives are ready for sale. Anyway – more on Stacy in Part II.

Kineau by Jay FisherJay Fisher is an established, world renowned, knife maker. Jay is an artist with a four year backlog of commissions, which presents an interesting opportunity. A knife you commission today is quoted today, before it ever exists. The set commission is locked in, and Jay’s queue is extended +1 (or more if you buy a set!). Time passes, your project progresses, and in time is delivered. What happens if you want a knife sooner? You just have to have one, you need a gift, you just see one you absolutely love and want it now? In such a case, there are knives for sale from estates, collectors, or even those that Jay produced for a client that was unable to fulfill their obligation. These knives are priced to sell now, which actually is the opposite of what you would find at the end of the car makers model year. Knives available “now” are worth more than the commission quote for those we have to wait four years to have in hand. (Anyone familiar Harley Davidson understands this concept!)

Desert Wind by Jay FisherAlso taking into consideration that a commission now, will result in a piece delivered at a higher value than the locked commission price. Now consider the fact that Jay’s commissions are accepted by contract, not by upfront payment. So, for examples sake, say you commission a knife today for $2,000. The knife will be set for delivery in approximately four years, during which Jay’s reputation will grow, his portfolio will expand. Finally, his style will evolve and his skills will improve. I would project that commission, upon delivery, would likely draw at least $3,000. This is an instant ROI of $1,000  (50%) for your art portfolio.

(Interlude: Did you have seriously think about that statement “his skills will improve,” or did you at least read it twice? Jay is a master of his craft, yet there is no insult when I say his skills will improve over time. Mastery is not a permanent state of knowledge and skill frozen in time. Mastery merely means an artist has achieved a level of understanding at a particular point in time. To an true artist, mastery is a journey, not a destination. If any of us ever truly mastered our craft, feeling we just knew all there was to know about it what do you think would happen? I’ll tell you; we will lose interest and move on to something entirely different.

Mastery is an evolution, time will bring new designs, new materials, new tools, new challenges, new – well we just don’t know that’s yet to come. There are times a master makes a mistake, often at the point were we become arrogant, and are sent backwards (I think the proper term is bitch-slapped) into a humble pondery of exactly what possessed us to start this career in the first place let alone do something so stupid. Then we dust ourselves off, maybe get a few stitches, and return to our craft reminded that we will be spending the rest of our lives trying to truly master our art.)

Ariel by Jay FisherSome may question a commission solely for investment, I’ve never looked at this as disrespectful to an artist. The fact is a commission is our stream of income, and if you’d like to commission say a $20,000 New Wave Gothic Table from me; knowing you have a buyer upon receipt that will take it for $25,000 … well … I’d figure that’s your commission on the sale! What has actually been accomplished is the value of the table with this transaction increased by 25%. Agents and brokers, galleries, designers, all place a markup on the commission, receive a percentage of the sale, or work on an hourly rate for their services; it’s all part of the marketing and packaging of an artist. For those artists that still object, these are most often (there are a few exceptions) starving artists. Anyone can be a purest, sticking to the principle of sales directly to the end client. I’ve never seen the point, as any given client somewhere down the line will either sell or bequeath their possessions. There is no less appreciation from someone that see’s a financial value in your work, than from someone that appreciates the craftsmanship, they are one in the same in two different forms.

PJ by Jay FisherThe value of a blade (or any artwork) is greatly impacted by the level of involvement of the artist. In short, is the artist a designer and project manager, or someone that starts and finishes every aspect of their pieces? Jay handles every aspect of each knife personally from design through the sheath, even the photography. His personal touch is not only etched in his mark on each blade, it is archived through the entire carefully documented process. I received updates throughout the process, saw the patterns, the blade blanks, the hardness testing, cutting the leather patterns for the sheath; I became a part of the story. In my experience marketing our pieces, this is an extremely important factor for many clients. It is intriguing, and it inspires individuals to become collectors of your work. Earning collectors is what establishes an artist with a consistent queue of commissions, as we stated in Jay’s case he’s up to four years now.

Another consideration when purchasing knives, or other tangible assets, when compared to stocks or bonds is that you actually take possession of the piece. When you have the physical asset there are positive and negative factors involved in facilitating a sale. When the time comes to make a sale, you must facilitate the sale of the physical item instead of engaging a broker to handle the transaction. Given the internet, it is now reasonably easy to publicize your desire to sell an item through various forums and websites that feature knives or other collectibles. I personally like the actual physical possession aspect of knives and other collectibles, and have come to the conclusion that no arrogant CEO or fraudulent bookkeeping can ever devalue something like a knife. Owning a piece signed by an artist like Jay Fisher puts an object in your hands that has very little chance of ever losing value.

Many of you have already visited out site to check on the progress of “Artemis” – the custom made chef’s (butcher’s) knife I commissioned with Jay Fisher a couple years back. The knife arrived in May of 2009 and is now among my prized possessions. Of course I’ve been following Jay’s progress on various projects along with Artemis, and it’s now fun to see some of the knives that were forged along side this amazing creation Jay’s Feature Knives can be viewed at: http://www.jayfisher.com/featured_custom_knives.htm

Part II of “Investment Grade Blades” has been released – click here to read!

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2 Comment(s)

  1. http://cutlerynewsjournal.com/2009/07/17/what-are-you-doing-with-your-parked-savings/

    We’ve been cited as a reference article in a similar discussion of investment diversification.

    Stay posted for Part II – the past two weeks have been a bit of a roller coaster around here and I haven’t had a chance to finish and publish Part II this coming week.

    Eric Saperstein | Jul 18, 2009 | Reply

  2. http://knifemakersdatabase.com/FeaturedCustomKnifeMakers/FeaturedKnifemakerJayFisher.html

    Check out a featured knife maker article about Jay Fisher at the link above!

    Eric Saperstein | Aug 1, 2009 | Reply

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