What Are Your Thoughts On Le's?

[Elle_]

I was lurking on Richard Binder's website and saw a reference to him not believing in LE's for investment purposes. As a financial matter, my first instinct is to think that sounds right - I don't see why a LE fountain pen would appreciate, unless it was, like, a single pen produced by an artist and not reproduced, because LE art (i.e., lithographs) ordinarily doesn't appreciate.

 

I'm curious, though, to hear what experiences you all have had. I am just getting into FP's, and have now bought all the workhorses I could need, so may be moving into LE's to feed the addiction, but I am wondering how much I should be willing to pay, especially on the resale market. Of course, much is subjective, as to whether I love and really would value a particular design, but I'm interested in general rules too.

[ac12]

You should be willing to absorb the cost if the market prices goes DOWN rather than up.

If you plan to invest, you NEED to research the item and the market well, BEFORE you invest any money, so you understand your risk.

Even from historically proven brands, there could be a dud that just does not do well in the market.

[LamyOne]

Hello Elle,

 

As a general rule of thumb, I would not put my money into fountain pens as an investment. Every now and then, you'll come across pens that shoot up in value, but it isn't all that common. Sometimes they trend; I remember a couple of years ago when Esterbrooks were skyrocketing in "value," now they have stabilized to the levels they were before. Simply put, I would buy a pen because I like it - and leave it at that, (if it winds up appreciating in value later - that's a great bonus - but it shouldn't be your prime motivation).

 

Just my 2 cents.

 

Best regards,

 

Chris

Edited September 10, 2014 by LamyOne

[Runnin_Ute]

Pens are like most other tangible items. (fountain pens, watches etc) You don't buy them for investment purposes. You will lose money that way most of the time. They depreciate not appreciate. The only way a watch appreciates is if the price of gold goes up. The same watch in stainless steel? Nope. Depreciates.

[zaddick]

A couple of points to consider:

- Buy pens you like and will use

- Some limited editions are only "limited" to how many a manufacturer thinks they can sell

- On a strong brand, you can use a rule of thumb of reselling for 50% of MSRP (something like Montblanc currently)

- For a weaker brand, you can use a rule of thumb like 35% of MSRP for reselling (something like Graf von Faber Castell)

- Search for limited editions from small resellers. Often they work with firms like Delta, Stiplula, Omas, Visconti, etc. to create limited editions for their stores or on-line shops. You can find some good deals and they are actually fairly limited (8 or 25 or 99 instead of 4,000 or 12,500)

- Pens that no one wanted when they came out are sometimes the ones people want years later. If you can predict this, you should use these skills to pick lottery numbers.

 

As others have said, and more will say, don't plan on buying as an investment. Buy to use. If you can find pens way below MSRP that have only been lightly used, these can be great values. Also, for me, these represent great opportunities to use instead of collect... someone already "ruined" their value so I can use them without concern.

 

Good luck and happy usage.

[Elle_]

Thanks! Interesting feedback. I am presently in a situation where I very much want to buy a pen, and it is a LE, but I know it's overpriced. I am sitting on my hands and not bidding, but . . .

[Vgimlet]

My advice is if you don't love it, don't buy it just as an investment.

 

LE's are beautiful, and yes, may appreciate, but are just as likely to depreciate. And what people will pay can change drastically with an economic downturn.

 

In my other collection (tarot cards) I have several LE's and vintage decks that I bought for a fairly, sometimes even VERY reasonable price and are now worth about 100 times more than I paid for them. But I have quite a few others that were pretty expensive, and are now going for less than half what I paid.

 

And really, as DH often teases me when I see one of my more rare decks listed somewhere for hundreds or sometimes thousands more than I paid for it "Are you going to sell it? Then what does it matter?"

 

I probably won't get into the LE fountain pen world (one expensive collection is enough, heh) but I can understand the allure...but not as an investment.

[de_pen_dent]

Agreed that pens make lousy investments.

 

For the most part, LEs are a way for fountain pen sellers to charge a premium - there are a few genuine limited editons (eg, some maki-e pens or other hand-made customer designs). But selling a mass-producted pen as a "limited edition" is absurd - it is just a way of ostensibly trying to drive up price by creating an artificial scarcity of supply. And sometimes, not even that - Montblanc sells pens with a limited edition of 20k or more pens - what the heck kind of a limited edition is that?

 

All it does is justify them adding a hefty markup to the price.

[Runnin_Ute]

I actually have a limited edition watch. #2421/3900 - 3900 was just my dial color (black), between 4 identical watches with the only difference being the color of the dial (black, purple, blue, flame (red orange)) there were between 8000-10000 produced. Sold on what was then ShopNBC as "Today's Top Value" if I recall correctly (this was 2010) I paid about $100. Currently there are 3 of the same model on ebay. One at $65, one at $60/BIN $150 and one at $110. I know two of them don't have a bid yet and one is under 20 hours left. Don't recall on the third, but would be surprised if it had more than one. The one priced @ $110 is identical to mine.

[richardandtracy]

I think physical objects can only be investments if your powers of clairvoyance are good.

Mine are not.

 

However, it did not take great powers of clairvoyance to see that, as they were produced, the Parker Duofold DNA series in black and then the even more limited red, would appreciate within seconds of being sold. It happened, and I just wish I'd been able to afford one, or two.

 

Regards,

 

Richard.

[Bo Bo Olson]

I bought a MB Woolf (2006 date)on sale; €450 instead of €750. Had I never used it. It is now over new price. Used it is at sale price.

 

It's like buying a nice new sports car, and putting it in your nitrogen sealed garage.

 

Buy gold, until you have enough to pay 1/3 down on a house, 30 year mortgage only. Best place to buy gold is at live auctions, bid the gold price, you get the stones and workmanship for free.

Pawn shops are another good place to look for gold jewelry. Pay only the gold price.

Keep that in your bank safety deposit box....in that is cheaper than insurance. It is an investment.

 

It makes though enough sense to buy an investment pen than a stock....with a P&E of 60 like Coke ($60 cost, $1.00 dividend), that back in the day before hyper inflation had a P&E of 14.

P&E is an obsolete word. Never mentioned any more, the word dividends is meaningless, when paid out in pennies.

If you put your investment pen in the safety deposit box, all sorts of bad things happen to the pen.

 

Gamble on vintage wine....at the worst, you can drink grand wine. You do have to invest in updating your cellar int to a proper wine cellar. There are more wino's than pen nuts.

Edited September 10, 2014 by Bo Bo Olson

[jar]

I have a few Limited Editions, the smallest edition was 300 pens IIRC and the largest was an edition of about 2000 IIRC. There are companies that produce what they call limited editions that are in the tens of thousands. I have a hard time thinking of that as a "limited" edition.

 

I bought them because I liked the looks, not because they were a LE and with no idea of them being or becoming an investment.

[Kimo]

Investments need to be thought through, and the fact that you are asking the questions as to whether limited edition pens, or any other modern production goods, are good investments is the first step to doing well. In general the answer is absolutely not. Any time a manufacturer makes something "limited" they know that there will be enough unsophisticated "investors" who will buy it up with hopes that it will go up in value but the problem is that the manufacturer can and does keep making limited edition after limited edition until the cows come home. A good lesson from which to learn is Beanie Babies. These were little stuffed animals that were manufactured by the Ty Warner company back in the mid-1990s and were extensively promoted as investments (stuffed animals? Really?) and soon buyers were snapping them up like there was no tomorrow and prices were skyrocketing. Then by 1999/2000 people began to wake up and say WTH and the market for them totally crashed since it was entirely artificial. Today you would have a hard time selling them for $1 each on Ebay. Another very real example, though not to quite the same extreme is gold. In late 2005 the price began to inch up from around $425 per ounce at a slightly faster than justified rate until 2008 when it started increasing at a completely unjustified rate until September, 2011 when it hit $1,873 per ounce. Today, September 2014, just three years later it is $1,249. That is a loss of $624 per ounce, or a decline of 33 percent over the past 3 years and there is little reason to expect the slide to stop there. Gold prices were on a bubble and are continuing to decline. I do not know exactly where they will end up, but if you look at the long term price of gold it tracks pretty well with inflation and cost of living which means that should the bubble ever fully deflate and gold gets back to actual commercial value based on supply and actual demand the price today should be in the range of about $800 to $900 per ounce.

 

Limited edition pens have an even worse expectation that there will ever be an increase or investment bubble happening. The reasons are that there are almost no potential collectors to create a demand, and that the manufacturers are taking all of the potential increase for themselves when they sell them. If there were to sell their so called limited edition pens for the same price as their non-limited edition pens perhaps there could be a small chance for them to increase in value, but they do not. They sell them for many times the amount they sell their regular pens for so there is no room for appreciation.

 

I personally have a total of one limited edition pen and I bought it for two reasons - it was on sale at a price that was the same as the non-limited edition pens were going for and I really liked it and wanted it to use as an everyday pen which I do. If I were to sell it one day I would expect to get maybe half of what I paid for it at best but that does not matter to me because I am getting my money's worth by using it every day.

[BrandonA]

I have a few Limited Editions, the smallest edition was 300 pens IIRC and the largest was an edition of about 2000 IIRC. There are companies that produce what they call limited editions that are in the tens of thousands. I have a hard time thinking of that as a "limited" edition.

 

I bought them because I liked the looks, not because they were a LE and with no idea of them being or becoming an investment.

 

You can't compare the availability of editions across brands. Its about supply and demand. Although a pen may be limited to 300 if there are only 200 people that want it then it is hardly a limited edition. Whereas if a pen has 20,000 pieces but lots of people want them then they are more limited. As long as the demand over time for a pen outstrips the number of editions then it is a valid limited edition, regardless of the number of pieces.

 

I do though think that buying LE pens for a profit is a risky business. I don't buy mine to make a profit but some are now worth more than I paid. You need to buy what you like and if they go up in value then great.

 

I take the OP comment though. I got to the point where I had enough standard edition pens and LE were the natural progression for me.

[de_pen_dent]

^^^ I am the same way as Kimo. If I buy a LE pen, it is b/c i like the pen and want to use it, not b/c I expect it to appreciate in value.

Edited September 10, 2014 by de_pen_dent

[de_pen_dent]

 

You can't compare the availability of editions across brands. Its about supply and demand. Although a pen may be limited to 300 if there are only 200 people that want it then it is hardly a limited edition. Whereas if a pen has 20,000 pieces but lots of people want them then they are more limited. As long as the demand over time for a pen outstrips the number of editions then it is a valid limited edition, regardless of the number of pieces.

 

I hear what you are saying but the increase in value due to something being a "Limited Edition" depends on how limited it is.

 

Typically, with most of those 20k or so pieces, the pens are often available for a few years after the sale and that perception of rarity is not there, simply b/c such a large supply is likely to ensure enough availability and turnaround in the used market. Using the Writers Editions as an example that both you and I collect, I have got all but 1 of my WE pens at under $700. I have 2-3 more on my list, and expect to buy them for the same price as well. Only for the Hemingway, I am budgeting $2000 if i expect to go for it - which, given the time value of money over 20 years, isnt really a huge appreciation.

[Elle_]

I'm more coming at this from the angle of deciding whether to spend X on a pen that originally cost A, where X is a bit more than A and the pen has been used. I want the pen and want to justify the cost, but I am afraid I cannot. I really want to lie to myself (and my husband!) and think of it as an investment, but I actually am pretty serious about investing and know better.

 

I am wondering, though, if you can only find one of a certain pen on the market, then mayyyyyybe it is worth it to pay more. If the market only has one of something, then it sets its own market, really.

[Algester]

the only true investment is gold, silver and platinum... beyond that... uranium?

say... you have a pen that was made with a silver body and a 21kt gold nib... well I'm not sure how the application of fine silver in pens goes to actually give it a higher future's market value unless due to an unforeseen circumstance that gold, silver and platinum have a below margin market price

Edited September 10, 2014 by Algester

[zaddick]

I'm more coming at this from the angle of deciding whether to spend X on a pen that originally cost A, where X is a bit more than A and the pen has been used. I want the pen and want to justify the cost, but I am afraid I cannot. I really want to lie to myself (and my husband!) and think of it as an investment, but I actually am pretty serious about investing and know better.

 

I am wondering, though, if you can only find one of a certain pen on the market, then mayyyyyybe it is worth it to pay more. If the market only has one of something, then it sets its own market, really.

You are touching on the supply and demand issue here. Something is worth what people are willing to pay. That does not make it an investment.

 

That said, there is the value of your time and the loss of pleasure for not having something you want. I can say I have paid more for a used, modern pen than it cost new, and that did not even include the box and papers. It was what I wanted when I wanted it and I did not think it was a rip-off from my perspective. I have seen the same pen sell for less and others for more than I paid, but I get to derive pleasure from owning and using it now vs trying to wait for a lucky stab to catch the lowest price. If you like this pen and honestly believe it is not likely to be available again for a while, go for it. The marginal additional cost is probably not worth the extra time and effort to find it again for a little less.

 

Or, post a "want to buy" ad in the classifieds and see what might come out of the woodwork. You never know what people have and might be willing to part with.

 

Whatever your decision, have peace it was the right one for you.

[BrandonA]

 

I hear what you are saying but the increase in value due to something being a "Limited Edition" depends on how limited it is.

 

If your statement refers to a single company then I agree. For example if MB were to create a pen for 10k pieces they'd be able to sell it for more than a pen which had 20k pieces even if the two pens were identical. Across companies though you cannot draw this same correlation as many factors other than number of pieces will affect how much two companies can charge - quality of pen; marketing; demand for the brand etc.

 

I could create a LE pen that is limited to 10 pieces. These pens would be worthless as there is no demand for them - the supply of a meagre 10 exceeds the demand by a whooping 100%, therefore it is worthless. If MB were to release this same pen (assuming I made it to a good standard) under their name they'd be able to see it for thousands.

 

Other of the LE pens which has increased in value the most is the MB Hemingway. This pen had 20k of fountain pens produced and 30k of ballpoints. Due to its age and demand though the Hemingway fetches a price far higher than some of the other WE pens which have 12k ballpoints and 14k fountain pens.