The heavy competition amongst guitar manufacturers has generated enormous improvement in the quality of low- and moderately priced guitars, whether imported or built in the US. It used to be that a new, cheap guitar sounded, well, cheap. In 1980, $250 would not get you much of a new guitar. Adjusted for inflation, that’s $672 in today’s dollars—and you can definitely buy a brand new, gig-ready axe for that amount today.
New, inexpensive guitars have vastly improved over the past 30 years, which is all well and good, but what’s far more exciting is the current vintage market. We may be reaching a perfect storm for buying classic American guitars. Think of it a bit like the stock market, only instead of blips on your computer screen, it’s a sexy 6-string in your hands.
In the December 2010 issue of Esquire, Ken Kurson wrote:
The markets are about to make a run similar to the one we saw in the late 1990s. It’s not a leap in productivity catalyzed by American ingenuity . . . this time it’s more that we’ve so undermined our currency and so dramatically debt-leveraged our future that assets priced in dollars have nowhere to go but up. Everything I’ve been fretting over for the past two years— inflation, the price of gold—is good for many stocks. After all, what is inflation? It means that each dollar is worth less. So it now costs 1300 of them to buy the same ounce of gold that was recently had for 650. By the same token, the share of GE that you could buy for $14 in June will now cost you $16. Is that because GE is a better company whose future is more promising today than in June? Maybe. But another way of saying it is that each dollar is now worth only 1/16 share of GE compared with 1/14 share in early summer.
In short, guitars aren’t necessarily worth more, just our dollars are worth less. So you can hold onto your cash and watch it go the way of the peso or you can buy that old Esquire you always wanted.
The other factor in the perfect buying storm is that the vintage guitar market has been wildly overpriced for the past decade. Again, like the stock market, the actual value is far different than the inflated sale price. Gruhn Guitars and The Official Vintage Guitar Price Guide can swear all day long that a 1957 goldtop is worth $150,000, but try getting somebody to actually pay that. Anybody who needs to move a vintage instrument will take what this cash-strapped world is able to spend, and that might be a fraction of what authorities and experts estimate the instrument is worth. Sure, any bozo with a two-comma income can slap down the platinum card and pay the inflated price, but those kinds of crazy, rich-guy purchases have all but dried up. And this forces the real price—our street price—down.
Strangely enough, I earned less money last year than I’ve made in about eight years, but I’ve bought three guitars—which is more than I’ve ever purchased in one year. I searched Craigslist and eBay, sorted through a ton of crap instruments and delusional sellers (“I won’t take a nickel under $15k for this 1971 refinished Melody Maker”), and managed to find a couple of great deals. Surprisingly, I even found a real bargain on an old-ish Les Paul at Guitar Center in Nashville. That’s proof it’s a buyer’s market.
I’m not suggesting that buying guitars is a fiscally responsible retirement plan. It’s better than investing in commemorative NASCAR plates, but it’s probably not going to take care of you in your old age like stocks, gold, or real estate. Over the past decade, a lot of people who were investing heavily in vintage guitars would have been better off burying their dough in Mason jars in their backyard. Some folks lost a fortune.
But, if you love guitars—the fact that you’re reading this issue of Premier Guitar means you probably do—now is a great time to get the one you’ve always wanted or get back the one that got away. But don’t buy an old Country Gentleman and hide it in a vault. Twang on that thang— that’s the only way it’s really worth the money. It may not appreciate in value, but you will appreciate it more every time you plug it in.
