GeorgeH - Posted - 02/24/2025:  12:04:08

quote:

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Originally posted by The Violin Beautiful

Again, auctions are the dumping grounds for problem children and there aren't any deals to be found. Some things are just too problematic to sell, and many that do are overpriced.

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This is demonstrably false. Like “violins are good investments,” it is another myth perpetrated by dealers to sell their violins. In fact, dealers buy many of the violins and bows sold at specialty musical instrument auctions because many of them are very good to fine instruments and there are deals to be found. They can then mark-up the prices to retail in their shops. 

Dealers like to perpetuate this myth because:

• The don’t want retail buyers bidding against them in auctions and driving up prices


• They don’t want to compete with auction houses for retail customers


• They want consignments in their stores

People consign violins to auctions for many different reasons such as:

• They want to sell quickly or by a date certain


• They can realize a higher return than selling to a dealer


• They are selling for an estate or an inheritance


• The instruments are part of a collection


• They want to reach many potential buyers

Even good violins can languish for years in dealer’s shops waiting for a buyer. Auctions provide liquidity to violins sales where a violin can be sold for a not-less-than price by a given date. Dealers cannot offer that.

If you’re not comfortable buying at an auction by yourself or with an advisor, then go to a dealer that you can trust. But don’t believe that "auctions are the dumping grounds for problem children and there aren't any deals to be found." It simply isn't true. If it were true, dealers would not be using them to add to their inventories.

Edited by - GeorgeH on 02/24/2025 12:19:51

learn2turn - Posted - 02/24/2025:  12:17:34

This thread makes me wish I had a time machine. In the early 2000s I worked in Boston about two blocks from Skinner which has a Fine Musical Instrument auction twice a year.

I'd go on my lunch break to check it out. You could pick up and play pretty much anything. I was playing mando at the time so I'd try the mandolins. I played a few 1923 Loyd Loar signed Gibsons F-5s. For those unfamiliar with mandolins, a '23 Loar-signed F5 is pretty much the Holy Grail of mandolins. Loyd Loar was the acoustic engineer at Gibson that invented the F-5 style mandolin, along with the L-5 arch-topped guitar. Bill Monroe played a '23 F5 and I actually got to play one that was only two serial numbers from Bill's. These typically sell for $125K-200K.

At these auctions there'd by 100s and 100s of violins from a few hundred dollars to well into the six figures. Wish I could go today.

The Violin Beautiful - Posted - 02/25/2025:  10:43:58

quote:

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Originally posted by GeorgeH

quote:

---

Originally posted by The Violin Beautiful

Again, auctions are the dumping grounds for problem children and there aren't any deals to be found. Some things are just too problematic to sell, and many that do are overpriced.

---

This is demonstrably false. Like “violins are good investments,” it is another myth perpetrated by dealers to sell their violins. In fact, dealers buy many of the violins and bows sold at specialty musical instrument auctions because many of them are very good to fine instruments and there are deals to be found. They can then mark-up the prices to retail in their shops. 

Dealers like to perpetuate this myth because:

• The don’t want retail buyers bidding against them in auctions and driving up prices


• They don’t want to compete with auction houses for retail customers


• They want consignments in their stores

People consign violins to auctions for many different reasons such as:

• They want to sell quickly or by a date certain


• They can realize a higher return than selling to a dealer


• They are selling for an estate or an inheritance


• The instruments are part of a collection


• They want to reach many potential buyers

Even good violins can languish for years in dealer’s shops waiting for a buyer. Auctions provide liquidity to violins sales where a violin can be sold for a not-less-than price by a given date. Dealers cannot offer that.

If you’re not comfortable buying at an auction by yourself or with an advisor, then go to a dealer that you can trust. But don’t believe that "auctions are the dumping grounds for problem children and there aren't any deals to be found." It simply isn't true. If it were true, dealers would not be using them to add to their inventories.

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This is nonsensical, and the "demonstration" seems to amount to personal opinion and it lacks awareness of what actually goes on at auctions.  Dealers do send things to auction when they can't sell them or when they know the attributions are shaky. Some of these instruments are so questionable that they are withdrawn from the auctions before they end to avoid legal trouble if enough people start to ask questions, but many of the violins that aren't as elite fly under the radar. Shops have to deal with the aftermath when these "great deals" show up with major repair issues, excessively thinned-out plates, major changes to the original varnish of an individual maker, and other pitfalls that turn them into money sinks. While you can put a violin up for sale at an auction if the house agrees to take it, there's no guarantee of a sale at an auction. There are almost always unsold lots at auctions. The expansion of auction houses to different parts of the world is in part a way to reshuffle unwanted items to different markets.

While dealers used to buy from auctions  20 or 30 years ago, very few, if any, do so anymore. There just isn't any reason to buy from auctions for a dealer anymore--the selection is poor, the prices are too high, and you can't trade anything in. Even at the highest level, some of the instruments have turned out to be disappointing. Several years ago a Strad viola was overhyped and estimated at a whopping $45 million. Despite all the fanfare and marketing expense and the claims that it was the finest viola in the world, it didn't even sell. Just recently, the Joachim-Ma Strad was auctioned. It did sell, but for less than its low estimate. So even the claim I hear periodically that the cheap violins at auctions are junk but the truly high end ones are stellar is not entirely accurate. It's possible to find a good deal, but you have to spend a huge amount of time sorting through bad deals to find it. 

 

Estates are sold through auction for several reasons. Many times it's just a matter of the executor wanting a quick sale and not being willing to break up the collection to sell piecemeal. An auction house may help to liquidate the collection, but it comes at a heavy premium. You pay for the convenience. If the estate is big enough, a dealer can't buy it alone, so either he needs to bring other dealers in as a consortium or it has to be passed to an auction house. Dealers tend to have the first crack at estates, so the really amazing ones are typically bought up before they can get to auction. In many cases, if there is a long enough period of inactivity, the executor will relent, sell the best items to a dealer for a better profit, and then send whatever no one is willing to buy off to auction in the hopes that a speculative buyer will get excited and start a bidding frenzy. The way auctions work, interest in an item encourages others to bid, so bidders often end up overbidding to try to "win" or they bid on things they wouldn't otherwise pick because the show of interest makes them wonder if they've missed some hidden gem.  

 

When it comes to everyday buyers bidding against dealers, that was a problem decades ago, and the growth of the online auction market led to a boom in interest in auctions among buyers who didn't trust shops and decided that buying at auction was a way to save money from retail. Dealers wanted to buy at wholesale prices at auctions, but enthusiasts didn't mind paying more than wholesale as long as they came out paying less than full retail (unwittingly ignoring the costs of repair and setup and the time and effort needed to resell). In the "old days" it was pretty much just dealers at auctions, but the market changed. Eventually as more and more speculative buyers got involved it became clear that they were willing to push prices up to much higher levels, even surpassing retail value from time to time. Once it was clear that this was a permanent change and not a temporary one, dealers gave up on auctions houses as good sources for instruments.

Dealers keep in touch with each other, and they get to know the markets in different areas well enough that they can select for them and trade instruments. The best dealers have vaults full of old violins that they empty a little at a time--they don't need auctions to supplement anything. It's speculative buyers trying to get into buying and selling violins that tend to seek out the auctions as they get started. As soon as you get to know people in the business, you quickly learn that the deals are to be found elsewhere. There are people who make a living through their knowledge of the dealers in various places and the inventory shops desire. Those buyers are treasured because they know where to find the deals and they can save the trouble of getting stuck with problems.

I find it odd that after insisting repeatedly that violins were terrible investments, you've taken to defending auction houses as places where great deals are found. If they're great deals, then it doesn't make sense to call the violins bad investments. But it also doesn't make sense to use auctions as an example of great investments when it comes to violins. They're one means to acquire instruments, but they offer smaller returns to begin with. Because auction prices are typically made public, they give some numbers as a basis for study, but they do not provide a picture of the whole market or even the majority of its composition.

Fiddlers mostly don't care about auctions because they know that they can find prices they'll like better elsewhere. It's misleading to say that fiddlers don't care about investment value because 1) many actually do, and 2) a good number like to boast about how little they paid for their instruments compared to what others spend as a way of suggesting that they have invested far more wisely than their colleagues and have gotten much better returns. 

GeorgeH - Posted - 02/26/2025:  14:54:18

quote:

---

Originally posted by The Violin Beautiful

quote:

---

This is nonsensical, and the "demonstration" seems to amount to personal opinion and it lacks awareness of what actually goes on at auctions.  Dealers do send things to auction when they can't sell them or when they know the attributions are shaky. Some of these instruments are so questionable that they are withdrawn from the auctions before they end to avoid legal trouble if enough people start to ask questions, but many of the violins that aren't as elite fly under the radar. Shops have to deal with the aftermath when these "great deals" show up with major repair issues, excessively thinned-out plates, major changes to the original varnish of an individual maker, and other pitfalls that turn them into money sinks. While you can put a violin up for sale at an auction if the house agrees to take it, there's no guarantee of a sale at an auction. There are almost always unsold lots at auctions. The expansion of auction houses to different parts of the world is in part a way to reshuffle unwanted items to different markets.

While dealers used to buy from auctions  20 or 30 years ago, very few, if any, do so anymore. There just isn't any reason to buy from auctions for a dealer anymore--the selection is poor, the prices are too high, and you can't trade anything in. Even at the highest level, some of the instruments have turned out to be disappointing. Several years ago a Strad viola was overhyped and estimated at a whopping $45 million. Despite all the fanfare and marketing expense and the claims that it was the finest viola in the world, it didn't even sell. Just recently, the Joachim-Ma Strad was auctioned. It did sell, but for less than its low estimate. So even the claim I hear periodically that the cheap violins at auctions are junk but the truly high end ones are stellar is not entirely accurate. It's possible to find a good deal, but you have to spend a huge amount of time sorting through bad deals to find it. 

 

Estates are sold through auction for several reasons. Many times it's just a matter of the executor wanting a quick sale and not being willing to break up the collection to sell piecemeal. An auction house may help to liquidate the collection, but it comes at a heavy premium. You pay for the convenience. If the estate is big enough, a dealer can't buy it alone, so either he needs to bring other dealers in as a consortium or it has to be passed to an auction house. Dealers tend to have the first crack at estates, so the really amazing ones are typically bought up before they can get to auction. In many cases, if there is a long enough period of inactivity, the executor will relent, sell the best items to a dealer for a better profit, and then send whatever no one is willing to buy off to auction in the hopes that a speculative buyer will get excited and start a bidding frenzy. The way auctions work, interest in an item encourages others to bid, so bidders often end up overbidding to try to "win" or they bid on things they wouldn't otherwise pick because the show of interest makes them wonder if they've missed some hidden gem.  

 

When it comes to everyday buyers bidding against dealers, that was a problem decades ago, and the growth of the online auction market led to a boom in interest in auctions among buyers who didn't trust shops and decided that buying at auction was a way to save money from retail. Dealers wanted to buy at wholesale prices at auctions, but enthusiasts didn't mind paying more than wholesale as long as they came out paying less than full retail (unwittingly ignoring the costs of repair and setup and the time and effort needed to resell). In the "old days" it was pretty much just dealers at auctions, but the market changed. Eventually as more and more speculative buyers got involved it became clear that they were willing to push prices up to much higher levels, even surpassing retail value from time to time. Once it was clear that this was a permanent change and not a temporary one, dealers gave up on auctions houses as good sources for instruments.

Dealers keep in touch with each other, and they get to know the markets in different areas well enough that they can select for them and trade instruments. The best dealers have vaults full of old violins that they empty a little at a time--they don't need auctions to supplement anything. It's speculative buyers trying to get into buying and selling violins that tend to seek out the auctions as they get started. As soon as you get to know people in the business, you quickly learn that the deals are to be found elsewhere. There are people who make a living through their knowledge of the dealers in various places and the inventory shops desire. Those buyers are treasured because they know where to find the deals and they can save the trouble of getting stuck with problems.

I find it odd that after insisting repeatedly that violins were terrible investments, you've taken to defending auction houses as places where great deals are found. If they're great deals, then it doesn't make sense to call the violins bad investments. But it also doesn't make sense to use auctions as an example of great investments when it comes to violins. They're one means to acquire instruments, but they offer smaller returns to begin with. Because auction prices are typically made public, they give some numbers as a basis for study, but they do not provide a picture of the whole market or even the majority of its composition.

Fiddlers mostly don't care about auctions because they know that they can find prices they'll like better elsewhere. It's misleading to say that fiddlers don't care about investment value because 1) many actually do, and 2) a good number like to boast about how little they paid for their instruments compared to what others spend as a way of suggesting that they have invested far more wisely than their colleagues and have gotten much better returns. 

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It is "nonsensical" to say that "While dealers used to buy from auctions  20 or 30 years ago, very few, if any, do so anymore." Do you really believe that all auction buyers at Tarisio, for example, are now retail buyers? 

Of course dealers still buy from auctions; I know this personally. Tarisio even runs 6 T2 auctions a year "For the Trade" specifically geared toward dealers:

“Our auctions focus on instruments and bows that are in need of restoration, have uncertain attributions or are from a trade workshop. Estimates are set at wholesale prices and instruments are presented in an efficient, professional venue.”

You wrote "I find it odd that after insisting repeatedly that violins were terrible investments, you've taken to defending auction houses as places where great deals are found." I said that violins are not good investments compared to S&P index funds (for example), and showed that historical ROI numbers support this as fact. I also never said that "auction houses as places where great deals are found." I said there are deals to be found because there are. Violins still often sell for wholesale prices compared to what dealers are asking for the equivalent instruments. 

(Note: I am not suggesting that people abandon dealers to buy at auctions. Dealers offer many services that auctions don't.)

The fact that you see a few problem violins purchased at auctions show up in your shop doesn’t mean that most of the fiddles and bows in sold in auctions are not good. Your sample is highly biased. The many good ones aren’t going to show-up in your shop because they don't need to! You see only a minuscule fraction of the hundreds of violins sold at specialty auctions every year. If Tarisio (for example) mostly sold “problem” violins for high prices, they would not stay in business. The fact is that they don’t accept many of the instruments offered to them to sell in their auctions because they don’t want to sell junk. Potential buyers can also examine the instruments in person in NYC or Berlin or London and read the condition reports. They even put sound sample videos of some instrument on their website.

And sellers are guaranteed a sale on the auction date if the hammer price is greater than the predetermined reserve price and the bidder pays the auction house. 

Just to be explicitly clear, I am referring to specialty Auction Houses, not eBay auctions which are always a gamble. 

In regards to the recent Strad sale that sold below estimates, experts who maintained that violin for years said that the estimates were too high and the final price was fair for that particular Strad. Christies and Sotheby’s exited the violin trade years ago, and their recent records show that they don’t do well when they auction fine violins as one-offs. It is not their core expertise.

Finally, you talked about fiddler’s thoughts about the value of their own violins. Most people tend to overestimate the retail value of their violins. And then when they try to sell them, they are confronted with the reality of 20-50% cost-to-sell, U.S. federal capital gains taxes of up to 28% compared to 15-20% for securities, and long times-to-sale. 

Violins are simply not good investments.

Finally, thank you for time you have put into this discussion. It has been lively and you have shared some interesting insights into your business.

Edited by - GeorgeH on 02/26/2025 15:09:55

The Violin Beautiful - Posted - 02/27/2025:  06:03:15

George, I’m starting to wonder if part of the problem here is that you seem to conflate dealers with shops. This is evident from your description of dealers having to compete with auctions for retail customers. This doesn’t make sense, as dealers do the majority of their business selling violins to shops at wholesale prices, not selling them to customers at retail. Dealers don’t tend to advertise themselves because they don’t want to be approached by retail clientele. They also pride themselves on having instruments that you can’t find at auctions. Auctions for restorable instruments are not of interest to dealers generally because they typically don’t have luthiers on staff to do the work to make them salable to shops even without setup. They then either have to pay luthiers for the work and lose whatever they’d make from a sale (remember, a wholesale sale, not retail) or try to find a shop that wants to buy a damaged instrument and take on the risk of a dud that may never sell. Some dealers take returns, some don’t. Dealers are more receptive to your business if you agree not to return whatever you buy, so it’s on you as a shop owner to use your brain when buying and not take on risks.

Shops, on the other hand, at least those who employ luthiers, are more interested in speculating on violins and more willing to take on risk by bidding on damaged or questionable violins at auctions because they can save money on the repair costs (they only have to pay the hourly rate of their luthiers, not the customer price) and they can then eventually sell the violins at retail and attempt to make a larger profit than they would if they bought violins that were less questionable.

My sample size of auction violins is much larger than you claim. I see more than what is brought in for repair, and I talk with people who visit the auctions in person. As time goes on, I hear more and more from these people that the auctions are full of bad deals and I hear often about violins that become problems either before either before the auction even ends or afterward when the buyers start to discover the problems. A lot of violins that have been killed by experts show up at auctions so the owners can try to get their money out as quickly as possible before word gets around that their violins aren’t what they purport to be. Auction houses may issue condition reports, but they are often inaccurate or incomplete. Sound samples are pretty much worthless as tools for evaluating auction instruments. If you’re buying violins at auction for sound, you’re going to get burned. “But it sounds great” is one of the phrases you hear people utter when they try to resell violins and find out they’ve overpaid. That phrase doesn’t change the value, especially when the opinion that a violin sounds great isn’t shared among parties.

Violins can be good investments. The catch is that you have to have a keen horse sense as an investor to do well. If you don’t know what you’re buying or don’t have a realistic sense of the market, you’re not going to do well. Stocks are simpler as investments because you don’t have to know too much to buy them and make money. I agree that they’re probably a safer investment for the majority of people. But that doesn’t mean violins are poor investments across the board. And again, when you buy a violin as a retail customer regardless of the source, you’re investing in more than its market value. If you buy a violin and use it to make a career, it doesn’t really matter if you can show an impressive ROI on paper whenever you decide to sell it. Even if you lose money, the other benefits of the purchase of the violin can make it worthwhile.

The Violin Beautiful - Posted - 02/27/2025:  06:47:13

I should add that dealers of fine violins build their reputations by selling violins that are in pristine condition and that have rock solid attributions. Shops want to know that when a dealer approaches them they can trust that they’re getting winners, not dodgy violins that are going to be nightmares to handle. If an auction is for violins that are damaged or have uncertain attributions, this is exactly what goo dealers want to avoid at all costs. If you actually see dealers buying that kind of inventory it’s a huge red flag.

If the T2 auction is really aimed at dealers and shops, why is it open to the public? Why would a business want to compete against its own customers at an auction? Having a speculative auction creates a place for the items that aren’t solid enough for the regular auction or don’t fit the bill for what interests the auction clientele. It gives people another place to try to unload things before resorting to eBay. And it encourages curious buyers to speculate on things at a lower price with the hope that the yield will be greater.

The Violin Beautiful - Posted - 03/12/2025:  10:29:32

How are we feeling about violins as investments now that one of David Fulton’s violins just sold for the new world record? I don’t think Fulton needs to shed any crocodile tears about percentages on this one. A sale like this is what many collectors dream about all their lives.

thestrad.com/news/record-break...4.article

ChickenMan - Posted - 03/12/2025:  12:13:14

It's still not the average person's investment. It's like investing in rare cars or art - for those with ridiculous amounts of disposable income.

DougD - Posted - 03/12/2025:  14:24:34

Its too bad that the question in the OP got completely lost in this thread. NCnotes noted that a whistle playing friend preferred inexpensve whistles because they sounded more "traditional" and wondered if it was the same with violins - if the sound of Irish farmers playing in front of their turf fires could be more easily duplicated with"Inexpensive" instruments. This is an interesting question familiar to anyone who plays music influenced by "traditional" sources - "Do i need to play a Stella 12 string to sound like Barbecue Bob?" It had nothing to do with appreciation, investment value, or auction prices, but raised some good questions about historical understanding and artistic intentions.

GeorgeH - Posted - 03/12/2025:  14:50:42

quote:

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Originally posted by The Violin Beautiful

How are we feeling about violins as investments now that one of David Fulton’s violins just sold for the new world record? I don’t think Fulton needs to shed any crocodile tears about percentages on this one. A sale like this is what many collectors dream about all their lives.



thestrad.com/news/record-break...4.article

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The numbers tell the story: The Strad was a poor investment.

If Fulton had invested the same amount of money ($2.75 million) in an S&P 500 index fund at the same time he bought the Strad in 1992, and then sold the shares at the same time he sold the Strad, he would have made at least $9.6 million more dollars  after inflation ($32.6 million versus $23 million)  before capital gains taxes of 15% for the securities instead of a 26% for the Strad.

Before taxes, his investment would have grown by 41% more had he invested in the index fund (not that he needs the money). After taxes, the investment would have been even more profitable compared to the Strad.

Plus we don't know the commissions or transaction costs for selling the Strad or the maintenance and restoration costs and it took a long time to sell.

The Strad was a very poor investment. The numbers don't lie.

(Obviously, Fulton did not buy the violin for investment purposes. He bought it to add to his remarkable collection.)

Edited by - GeorgeH on 03/12/2025 15:00:25

The Violin Beautiful - Posted - 03/12/2025:  15:24:55

I would recommend reading the comments here:
violinist.com/blog/laurie/20253/30311/

Dick Hauser - Posted - 04/26/2025:  16:06:08

People playing for personal enjoyment and professional fiddlers/violinist undoubtedly have different ideas about what constitutes a professional quality instrument. Professionals' instruments are played more and asked to do more than the average fiddler. If your instrument supports you financially, it is more important than your car. It also costs less and will last longer. In fact, it will probably appreciate.

Edited by - Dick Hauser on 04/26/2025 16:08:49

Lonesome Fiddler - Posted - 05/06/2025:  21:08:02

I've probably said this a couple of times during my lengthy addiction to this forum, but I always buy a particular musical instrument because I truly believe I'm gonna be lovin' it over the long term. To be sure, my ever evolving skill and taste has propelled me back into the market several times, but my ultimate choices have always been emotional, not sensible. And I got to say, too, that at this stage of my life I'm happy as a clam over what I've got.

Kip_Malone - Posted - 06/29/2025:  11:44:19

My fiddle instructor Randal Bays had the chance to play some Strads, Amatis etc in DC that were stored and used for big time classical players, he reports that some were great and a couple were terrible. After playing moderately priced fiddles for 40 years, he got a $4500 new violin and said he is never going back. I have played a few $5000 fiddles and sure notice a difference.

wrench13 - Posted - 06/29/2025:  12:29:44

Hey you get the best sounding, to you, instrument you can, right? Most violins make OK fiddles, if they got good bones. Great violins - whose playing fiddle on an Amati? Send my dry cleaning bills to that guy! But yeah, there are levels finish and tone that better and better instruments are capable of. To a point.

NCnotes - Posted - 06/29/2025:  22:34:51

Update…I had a chat with my luthier about this…

He said, “You know those fiddlers you admire that are performing these days? They are playing on REALLY good instruments.” ( implying: expensive, custom-made, etc) Implication to me was that fiddles do NOT necessarily cost less than violins…!

( PS He said that he has personally seen Tommy Jarrell’s fiddle and he said to me, “That was a piece of junk. But he was a good player, had good rhythm.” :-)