The cost of gear, some interesting data

[Leo_Gnardo]

Some of that vintage gear hoarding among the top level pros could be due to tax planning. When a performer is making millions and he's in the top tax bracket, it's not uncommon for them to buy $500,000 instruments so that they don't have to pay tax on that income. Instead of splitting their income with the IRS they'll put it into an instrument because they like to think that they have a valuable asset that works as a store of wealth for them. When they get older and their royalty streams get cut off, they end up selling out of those expensive investments at a time when their income stream is lower and their tax bills are lower.

I'm not so sure it was a tax dodge, consider the case of J. Geils a couple years ago. He sold off his '59 LP for about $300,000, a little discount because the neck had been broken & repaired. I'm sure he got it early days when they were much more affordable, and the 300G was quite a lot of help seeing him thru his last couple of years.

What's annoying is Gibson trying to market their guitars for the last few decades as if they will achieve a similar value in time. AS. IF. Not likely... Same baloney from Fender.

[rjb]

Speaking of possible tax dodges, what ever became of the promised Keith Richards' guitar museum?
Category: | Herald Sun

[Enzo]

My friends over at Elderly Instruments occasionally get in a nice 59LP, and they are selling for over a quarter million bucks. What amazes me is they have a waiting list for them. Every one they get is already sold, it never hits the sales "floor". At least they put them up on the web site as "on hold".

[Leo_Gnardo]

My friends over at Elderly Instruments occasionally get in a nice 59LP, and they are selling for over a quarter million bucks. What amazes me is they have a waiting list for them. Every one they get is already sold, it never hits the sales "floor". At least they put them up on the web site as "on hold".

The scuttlebutt I heard, there were fewer than 1000 '59 LP's made, but over 3000 in circulation. Hmm.... not an item I'd be attracted to spending a quarter mil or more for.

[Chuck H]

I was enamored with the idea of owning a 50's or 60's burst when I was a kid. At that time they could be had for a thousand bucks. Way more than I had Who knew? Destined to be collectible,sure. But a quarter mil!?!

I had a buddy in high school that had a 60's gold top in nice condition. He played the crap out of it! It was just a nice guitar to him. Got it from his older brother. Maybe 8K now if it hasn't been trashed. A mentor of mine had a 59 burst. Also used as a player, not a collectible. He bought it used some time in the early 70's for probably a couple of hundred bucks. I played it on many occasions. Super nice guitar. If others are like THAT one then the "mojo" isn't BS.

[The Dude]

I'm still waiting for the free Jimi Hendrix Strat Enzo promised me!

BTW, I went reading about 59LP's after reading this. Apparently, a quarter mil is a cheap one these days.

[loudthud]

I sold some stocks the last couple of years and had to fill out form 1040 Schedule D. In the instructions they make it seem like you are supposed to declare income from the sale of "collectables". I ask a part time dealer (who is an attorney) I know about this and he didn't seem to know anything about it. WTF?

Back in the late 60's I was looking for better and better guitars. The new cheap imports weren't very playable because they had never been setup properly. Strings were too high at the nut and intonation was a mile off. Any Gibson you could find at a pawn shop was way better but a new Gibson was beyond my budget. I finally found a store that actually setup the cheap imports before sale.

[bob p]

I sold some stocks the last couple of years and had to fill out form 1040 Schedule D. In the instructions they make it seem like you are supposed to declare income from the sale of "collectables". I ask a part time dealer (who is an attorney) I know about this and he didn't seem to know anything about it. WTF?

Yes, guitars are taxed as collectibles, which get taxed at a higher rate than stocks.

all of the exotic guitar dealers that I've dealt with know about it, and they are smart enough to keep receipts and file a 1099 on their purchases. They just like to claim that they don't know because they're trying to get away with not declaring the income... especially in cash transactions that get kept off of the books. That gets hard to do though, when huge sums of money are involved.

I was watching a Gilmour video a few weeks ago and I noticed that every guitar he owned was in a case that had a big label, with the guitar's brand, model, color and serial number written on it. His entire collection is itemized.

[bob p]

I was enamored with the idea of owning a 50's or 60's burst when I was a kid. At that time they could be had for a thousand bucks. Way more than I had Who knew? Destined to be collectible,sure. But a quarter mil!?!

Those prices are not sane and they will not last. Somebody is going to be left without a chair when the music stops, but that's another story. To put it into perspective, boomers were willing to pay $500,000 for a '68 GTO in the 90s, but those days are GONE and prices have fallen to more reasonable levels. It's inevitable that the same will happen with vintage guitars as the buyers get old and die off.


I think there was a time when we all had a jones for a 'burst. I remember in the 70s everyone thought that the new LP Customs were the cat's ass, they seemed to be what everyone wanted. But I still wanted the sunburst Standard even though it had chrome instead of gold, rosewood instead of ebony, and less fancy inlays.

What's funny is that $1000 wasn't that much money if you were shopping for a new Gibson back in the 70s. Back then my new P-Bass cost $500 at retail and that's what I bought because a Jazz and a Rick cost more. I think the Ric was $750 or so. (Instead of paying extra for the Ric I found an interesting 4-line classified ad in the back Guitar Player by a guy in California who was rewinding in his garage. I called him on the phone (long distance was expensive back then) and I had him rewind my P-bass pickups for $35 to give me a Ric-type sound. That guy was named Seymour Duncan and I was one of his early customers when custom pickup rewinding was still a cottage industry. I ended up getting lots of compliments about my tone back then.)

Back in the late 70s a new LPC was probably around $900 or so. Maybe somebody else remembers the numbers better than I do, but what I remember being significant was that a used 'burst wasn't considered anything 'special' by the market back then. Back then nobody knew the word 'vintage', and 50s LP were just old guitars that could be had rather cheap -- I mean like $500 and up. The stores always wanted to steer you into a new Norlin Gibson instead of that 50s 'burst because they had a better margin on the new gear than a used 50s LP, and everyone hated those fat 50s necks. Everyone wanted the new slim profile Gibson necks, and if you wanted something really 'special' the dealers might have pointed you toward an LP Artisan.

Back then there were a small number of cognoscenti who didn't like the volutes on the Norlin Gibsons and they tended to go after the 60s LP with the skinny necks. Nobody really cared about the 50s guitars back then. They were cheap. I bought a 55 LPC just because it was a great player with a big fat neck. Being a bass player, used to big fat vintage Precisions, I liked fat necks. That LPC was cheap because most guitarists hated their baseball bat necks. Good for me!

[bob p]

I had a buddy in high school that had a 60's gold top in nice condition. He played the crap out of it! It was just a nice guitar to him. Got it from his older brother. Maybe 8K now if it hasn't been trashed. A mentor of mine had a 59 burst. Also used as a player, not a collectible. He bought it used some time in the early 70's for probably a couple of hundred bucks. I played it on many occasions. Super nice guitar. If others are like THAT one then the "mojo" isn't BS.

Authentic gold tops and customs have been way over 8 for a long time. Things went sort of ape shit in the USA, driven by the economic boom of the 90s, when the boomers became fat middle aged men with big wallets who had to buy all of the toys they always wanted in their youth... everything from Hot Wheels sets to classic cars and guitars. They overdrove the prices of everything like they were driving a tube screamer into a Fender amp. Things got worse again between 2000-2007 when a lot of those prices on the second tier instruments quadrupled during the vintage craze. Ouch. It seems like the Greater Fool Theory is clearly in play.

I already had that 55 Custom that I bought for peanuts back in the day. The 55 were the ones with the "staple" type neck pickup and a P-90 bridge. I liked P-90 more than the PAF, and IMO that "staple" single coil was something special --it had a tone all it's own. That 55 was in great shape, totally original finish and it looked, played and sounded absolutely killer. Frets still had the original binding but the finish on the back of the neck was worn down to bare wood. It was definitely a player, but it still appraised for 10, and that was back in the 90s, nearly 30 years ago. I thought that was pretty high, and the price was an artifact of the boomers driving up the price of everything from their youth, from muscle cars to guitars. It's only gotten worse since then. 10 years ago I saw nice looking 55 Customs with original finishes priced at $40 to $60. I haven't had the neck refinished because that drops their value.

Today the price of goldies and customs are silly-high, they quadrupled between 2000-2010, but the price of 'bursts is just stupid -- as in astronomically high relative to the goldtops and customs, which is just insane. The 'bursts with PAF don't sound any different than the goldies with PAF and they sure don't play any different. People who are willing to pay $500,000 for the 'bursts aren't paying that much because the guitars play like monsters -- the goldies and the customs play like monsters too, and they're a lot cheaper than a 'burst; The people who pay such huge sums for the 'bursts are just paying a premium for the insanely cool, faded sunburst flame tops. There's no mistake about it, people aren't paying for the quality of the guitar when they pay 10x more for a 'burst over a goldtop or a custom. They're paying for the rarity and exclusivity and for the mojo that goes with the finish. That, and how it makes them feel better when they pose in front of the mirror in their music room. Don't laugh -- one of the lawyers with the best LP collections in the USA has a mirrored wall in his music room.


Would I but a 'burst today? Even with cash in hand? There's no friggin' way. I'm a seller in this market. The prices are just astronomical, and they're unsustainable. The 'burst market is pumped up to an irrational level, just like the Stock Market in 1929 or the Tulip Market in Holland in the 1600s. Boomers have already seen the top in their muscle car prices, so what's to keep us thinking that the guitars will fare any better, when everyone knows that the guitar market is shrinking? If millennials don't care about collectibles, who are we supposed to sell them to?!?

IME if you really want a monster playing guitar like that 60s goldtop, then look at the current production Custom Shop Gibsons. When I bought mine I arranged a site visit with another buyer at the USA's largest Gibson dealer on the day that they received their year's allocation of instruments. We played every guitar they received, and after I played dozens of them I took home what I thought were the best two, an R6 and an R8. The other guy bought several R9. My reissues are every bit as magical as my 55, at only about 5% of the price. I know, there are some builders here who will poo-poo anything made by Gibson, but I don't agree with them. There are truly magical guitars being made today, you just have to hunt them down.

[J M Fahey]

If you were going to give me one, I'd take the Jimi guitar.
If I had to buy one, I'd take the one I could afford.
The point being cost vs performance.
But, I do take your point.

Funny thing is, by own acknowledgement, Jimi´s guitar was as plain vanilla as can be, nothing out of the common.
In an interview (was it Guitar Player?) he said he walked inside Sam Ash (or was it Manny´s?), tried what was on display and picked one, just like that.

Nothing crafted by Nordic Virgin Goddesses or Tibetan Monks but standard (excellent quality in any case) Fender production line.

[bob p]

I'm still waiting for the free Jimi Hendrix Strat Enzo promised me!

I call dibbs on the Hello Kitty if he has one.

[Justin Thomas]

Better play nice with Enzo if you want that Hello Kitty Strat. He seems to post a lot of pictures of it.

Justin

[Enzo]

I have been waiting for a Hello Kitty axe to fall into my grasp for a long time.

[J M Fahey]

OK, I'll juice it up a bit. You are the guitarist in a Jimi Hendrix tribute band.

I am pretty sure there will be no Mighty Enzo tribute bands.

You might be surprised !!!!!

Not playing your original songs or whatever but what a better excuse to get together around a table holding pots full of rabid hot Enzo Chili , downed with crates of "25 cent beer cans" ??????