Vintage Gypsy Jazz Guitars as Investments

scot

"pretty normal guys who just love vintage instruments"

Their spouses probably don't consider them "normal"...

Michael is exactly right about building equity. I started with a Martin 00-18, traded for a Gibson SJ, then found a National uke ($$$!)at a flea market and traded that and the other Gibson for a Gibson Roy Smeck, which I traded for a maple Nick Lucas, which I sold and used to pay for the Dupont and Favino in a package deal. That's only one case for me, my other guitars have similar histories. Not only did I make out OK financially, the process was a lot of fun, too. Maybe it's harder to do this today because prices are up and there are a lot of people buying and selling, but the trick is still the same - having that couple thousand bucks on hand when the bargain presents itself, and not being afraid to take a chance.

TPC168

I really don't see anything wrong with the part time player/collector buying vintage instruments. Like Scot and Michael said, these people are more than likely going to take care of the instrument. Not saying the "player" will abuse the instrument...that's not the case at all, they may be just as cautious. It's just highly unlikely a middle class person who has saved his/her pennies or has built up equity for a vintage Busato will take it to open-mike night and let everyone play it, spill beer on it, and be generally cavalier with the care of their instrument.
Looking at the statistics from Mazzoleni's site, 2001, it's interesting to note the small disparity between the price of say a 90s Dupont and a 70s Jacques Favino at the time. I mean, we are talking about maybe $1500 difference. So if that is any indication, in eight years that 70s Favino which was $3500 dollars is now, if it is a modele #10, is closer to 9K. The MD-50 which was $2700 in 2001 is probably going to sell on Michael's site for 3-3.5k. Do the math...it's really a no brainer. The same is true for Busatos.
"I'd say it's pretty clear to me that prices for vintage Selmer type guitars have been mostly unaffected by the recession, and in fact the Big Three (Selmer, Favino, and Busato) have all been selling for record prices all year"
No doubt...the economy is in the toilet, yet a Jacques Favino selling for 3.5K in 2001 is GOING to fetch 8-9K. It's safe to assume that the trend will probably continue..even if the economy continues to struggle.
Just my two cents...

MichaelHorowitz

TPC168 wrote:

it's interesting to note the small disparity between the price of say a 90s Dupont and a 70s Jacques Favino at the time.

Duponts definitely aren't appreciating at the rate of the older guitars, but that's pretty much a given as they aren't as old, still in production, and readily available. But considering all that, they still hold up better then just about any another contemporary maker. Some models actually come close to the sort of appreciation you see for the vintage stuff. For example, a new Vieille Reserve was $6500 back around 2005. Since early 2008 they've gone up to $8500 new.

'm

Stringswinger

Duponts are the closest thing you can get to a vintage Selmer or Busato (though Bob Holo is well on his way to doing the same).

While I believe that vintage French guitars may be overvalued due to a combination of a weak dollar and a Gypsy Jazz "fad" that will fade (I could very well be wrong here!), I also believe that you can't beat a good Dupont for a Gypsy jazz axe.

My Favino is a great guitar, but I still "got to" my Dupont. I still advise people to start on a Gitane and trade up to a Dupont.

bill raymond

As the caveat goes: "Past performance is no guarantee of future results". We MAY be on the verge of a very serious economic collapse (and then again, we may not) such as occurs with some regularity--a debt-liquidating deflationary recession, i.e. "depression". If that does occur, then it could be decades before such a speculation might produce any significant returns. Remember that anyone who invested in the stock market at or near the peak in 1929 didn't break even until the '50s in dollar terms, and at that the dollar had inflated. Right now the US dollar appears to be reaching a low on extreme negative sentiment. That bodes well for US Dollar purchasing power in the future, and appreciation against the Euro and other foreign currencies, as the dollar has inflated much farther than the European currencies, thus has shorter to fall in comparison. Good luck to all you guitar speculators out there.

Stringswinger

Back in my college days (mid 70's) in New York City, vintage D'Angelico's sold for $1,000. Today those guitars sell for 15k-40K. In those days nobody wanted hollow body archtops. Today the demand for DA's is strong. Tomorrow that demand could fade. The same could happen with high end vintage Gypsy guitars.

Or, increasing demand and inflation caused by a weaker dollar could make vintage guitars the best investment ever. They ain't making any more of them and the woods (and craftsmanship) of those old guitars is fast disappearing.

And the bottom line is, it is nice to have a great guitar (or if you suffer from GAS as I do from time to time...10 great guitars) to inspire your playing.

Cheers to all,

Marc

MichaelHorowitz

It's anyone guess were the vintage market could go....but one reassuring fact is that it's pretty tough to find examples of vintage instruments going up quickly and then crashing.

I think some of the crazy prices people were paying for vintage solid body guitars did do that....and I've also heard that the market for vintage Nationals sunk dramatically once they started making them again. But generally there seems to be a steady upward trend for most instruments.

If anyone has other examples of a particular vintage instrument market bubble popping I'd like to know...

'm

bill raymond

Michael, I just want to advise everyone to be careful and look before they leap. Perhaps the question we should be asking is not whether there are any examples of "vintage instrument market bubbles having popped, but rather "are we in fact in a bubble market in "vintage instruments?". All bubbles by definition burst and collapse and there are numerous examples of speculative markets in items of little intrinsic value having bubbled and burst: The Holland tulip bulb bubble (1637), the South Sea bubble (1720), the Mississipi company (1720), the railway mania (1840s), the Florida land bubble (1926), etc.--an absolutely essential book for anyone to read is "Extraordinary Popular Delusions and the Madness of Crowds" by Charles MacKay.

One must question the intrinsic value of a factory made musical instrument of "vintage" (in fact, "recent", or at least "modern") manufacture. Certainly, rarity can support prices to a certain extent amongst collectors, but mere supply (or lack of it) says nothing about demand. Demand is in the collective mind of the buyers and is subject to the many vagaries of crowd behavior; crowds can just as easily turn this way as that. Not all pre-war Martins, Selmers, or "old" [?!] Gibsons (or any other brand, for that matter) are great guitars; many of them aren't really very good guitars, while some are very fine. "Vintage" doesn't confer greatness, nor in my opinion, intrinsic value.

You are quite correct that we can't predict the future of the market, but we can make some estimates of the probability that it might continue to inflate or end in disaster--though not when that might occur. Each must weigh all the evidence and be truly informed, then make one's best guess as to what to do with their money. Good luck in your speculation.

MichaelHorowitz

bill raymond wrote:

Gibsons (or any other brand, for that matter) are great guitars; many of them aren't really very good guitars, while some are very fine. "Vintage" doesn't confer greatness, nor in my opinion, intrinsic value.

That's true...and I think most people realize that not every single old guitar is a winner. But sound is not always the primary motivation. In my experience the motivations driving demand for vintage instruments are:

1) Sound: Anyone who is familiar with vintage acoustic guitars will tell you that there's nothing like the old ones....in the violin world they say it takes 60 years before a violin is mature. The same seems to be true with guitars....instruments from the 30s/40s have a certain power and tone that makes even the best newer instruments sound dull and lifeless. Discerning players know this and will pay for these old, mature instruments.

2) Nostalgia: Many people just want to own something from a certain era. For Gypsy jazz anything from the 30s-50s has a lot of cache. Even if a guitar sounds terrible and is unplayable there are people who would just like to own something from the "golden age."

Both of these motivation are pretty ubiquitous elements of human behavior...as long as there is a critical mass of people who enjoy the music of Django Reinhardt then I'd say it's pretty safe to conclude the Gypsy jazz vintage market will be pretty stable. It's worth mentioning that Selmer type guitars are pretty minor league material as far as vintage guitars go. You'd be hard pressed to spend more then $35K or so for the very best Selmers. Archtops and solid bodies get up into the 6 figures and beyond! Having to unload an $8K Favino for $6K in a down market is one thing, but having to firesale a 100K archtop for $20K would really hurt.

Michael Bauer

Bill, you seem to infer that buying vintage guitars is somehow simply "speculation". I disagree. First, the only two people that are making any real money out of the buying and selling of GJ guitars are the middlemen (mainly Michael and Jacques in this country). They provide a service and quite properly get paid a fee. With rare exceptions, any increase in value, unless by chance a type of guitar really takes off is going to be eaten up my the fees we pay Michael and/or Jacques to find us buyers. You'll make money on the odd guitar, and lose money on the next one. Anyone investing in gypsy guitars expecting to make real money that's not named Horowitz or Mazzoleni is just deluded. the money is in putting buyer and seller together, not in the buying or selling.

That said, you write as if these instruments are CD's or IRA's. The difference is we get to play them and enjoy them while we have them. So even if you just break even, you get something for nothing. If you lose a little, you hopefully got your money's worth, and if you make money...well, you just going to buy more guitars with it aren't you? Unlike a CD or IRA, the point isn't to make money, it's to play them. I think with a vintage guitar, you freqently get to play it and not really lose money (perhaps even make a little) when you let it go. A person who corners the market on Gitane D-500's IS going to lose money in the end.

Marginal gypsy guitars (Castaluccias, di Mauros, Pattenottes) are more likely to have value based on the quality of that particular instrument, and they will rise and fall in value more quickly because demand is always going to drop at the fringes first, and rise there last. But the Holy Trinity (Selmer, Busato, and Favino) are going to be the first to rise and the last to fall because they are the ones most associated with the great players, and that's a big part of the vintage instrument urge. Getting a Selmer makes some people feel more connected to Django. I haven't seen the '59 Les Paul bubble burst even a little in over 40 years. By the time it does, I'll be dead. A world class Selmer is out of my price range, but I found one that needed some care for a "great" price, and with some attention and proper setup, I have a guitar which I couldn't have afforded. And if the vintage guitar market goes bust, I still don't lose, because all the other ones will have dropped in price as well. It's relative.

In the end, vintage guitars are better investments not for the money they'll make, but for the value that they generally won't lose. That and they generally have more character than a new guitar. So play 'em and forget what they will or won't be worth in ten years. Unless the world goes to hell, they'll at least hold value, and if it does, you'll have bigger problems to worry about.