Todays another one of those days when I fell in a rabbit hole wondering, so what’s it really worth? Now I’m talking about a couple of ordinary things that have gone crazy.
What actually triggered this was a knife collection I had bid on this week. Actually, I didn’t ‘bid’ on it, the collection was offered and I agreed to the sellers price and terms, sight unseen. There were some premium pieces in the collection and I was willing to take a chance, only to have the seller withdraw his offer to sell. Such is life but it made me spend a bit of time looking into sales prices of some of the current GEC knives. Seeing knives that sold for $80-90 just a few years ago selling for close to $1000 was an eye opener.
Back in the day when I owned TSA Knives, it wasn’t uncommon to have retired collectors and folks on limited income request that I hold a knife for them. They may have been waiting on a pension check to come in and in a few cases were just waiting for pay day. Spending a $100 on a knife could put a strain on a budget.
At the same time, I can remember a point in time having in excess of 2000 knives in stock, ready to ship. I also remember wondering how stupid I was to let myself get in that deep. OH to roll the clock back and live those days over!
So what changed?
The value of most commodities in a free market are determined based on supply and demand. What’s curious is what drives the demand and resulting supply shortage.
Contributing to the hyper inflated prices for the GEC line has been partially a result of lower production numbers. Demand in the last 7 or 8 years has been increasing and now we’re seeing the supply go in the opposite direction. We’ve also seen more and younger collectors enter the field with larger and larger amounts of discretionary dollars to ‘invest’. I’m hearing from frustrated and downright angry collectors that can’t get what they want. Collectors with limited budgets are dropping out. For a lot of folks it’s not that much fun anymore.
Despite what we hear about hard times, high unemployment, etc, this economy is awash in discretionary $$$. Everyone has been the beneficiary of ‘free’ dollars from the government and more is on the way. At some point, that’s gonna stop. Will that effect some of these shortages and resulting inflated prices? Who knows.
Another group of products currently undergoing hyper inflation is the shooting industry. Prices for many guns have gone up from 25-75%. Ammunition has gone up 4x-5x. A box of 50 rounds of target 9mm ammunition that sold for $12 a year ago is currently bringing $50-60. If you can find it. Ammunition manufacturers are pulling their hair out trying to fill the gap. In short, it’s not going to change for at least the next year or possibly two.
Prices and availability of these items is definitely being driven by fear. Combine the violence we saw this past summer and the clearly spelled out policy intent of the new administration and people are afraid they’re about to lose their rights. You have to be careful what you say online or you can get removed. In the case of the website AR15.com, they felt the wrath of big tech are were shut down briefly. The Capital is still surrounded with National Guard Troops and razor wire. Why? It seems like it’s to feed the paranoia on main street. They’re impeaching a past president solely out of spite. The winners are pissed, the losers are pissed, people aren’t talking to each other….it’s a weird period in history and who knows how it’ll play out.
So how do you play it?
The above examples of trying to sort out what things are really worth pose a real interesting situation. Do you keep buying knives at inflated prices assuming there’s no top? I don’t know. There are a lot of options out there and I’ve been predicting for a number of years that everything has a limit. Especially on a commodity that really has limited intrinsic value. I might keep buying if I had the money and if I were buying high quality knives that I used. To buy them and let them sit in a dark safe hoping they’ll go up in value faster then they’ll rust? Don’t think so.
It was one thing when 70 years ago someone bought a $2 Case Knife that was forgotten in a drawer. Today, someone finds that brand new, in the box knife from 1950 and sells it for $150. Does anyone think that $90 GEC they bought on eBay for $300 a month after it was released will really be worth $22,500 in another 70 years? That’s optimism.
The gun and ammo situation is totally fear driven. We’ve seen it happen before and what happens going forward is 100% dependent on how the next 4 year cycle plays out. I wouldn’t buy more in the hopes you’ll be able to ‘cash in’ on the situation. As we learned in the past, what’s legal today can disappear in the stroke of a pen. Proceed with caution.
Summing it up, who knows what its worth?
That’s it. Who knows what its worth. Any time we buy something with an eye to tomorrow, we never know how it’s gonna pay off until tomorrow afternoon when the dust settles. If you like something, enjoy owning it, it has intrinsic value to you or maybe it might be your last chance to own it…..go for it. And maybe before you pay what even YOU feel is an exorbitant price read about Tulip Mania. That should make you think twice!!
And by the way, its Fun At Work Day today. Knock yourself out!!!