BUSINESS & TECHNOLOGY

Pick an investment: Collectors see electric
returns from playing guitar market

... Weary of playing the Wall Street Blues?  Guitar analyst Gary Dick says his 3,000 global customers who ask him to buy or sell guitars are painting their portfolios black by speculating on the market.

Dick says one of his non-musician clients earlier this year paid $200,000 for a 1957 Gibson Les Paul guitar that originally sold for $265.

Guitars that have been played by superstars or are technically superior have "typically performed at a 10 percent or better return on investment" annually, says Dick, who a decade ago left his job as the national account manager at U.S. phone company Sprint to establish Gary's Classic Guitars in Cincinnati.

In 1999, Sotheby's auction house in London sold the guitar* John Lennon was playing the day he met Paul McCartney for $225,100.  During the same year at Christie's in New York, the guitar Eric Clapton used to compose the rock classic "Layla" sold for $497,500.

Since 1993, Dick has brokered guitars for "Tonight Show" host Jay Leno, the Rolling Stones' Keith Richards and hundreds of doctors, lawyers and bankers he describes as "extremely serious" investors eager to participate in the $500 million-a-year global market for rare musical instruments.

"Ninety percent of my customers are professional investors or businessmen with discretionary income and an eye on the growth potential of specific guitars," Dick says.  "Virtually every guitar I've ever owned is worth more today than when I sold it."

Fred Walecki reckons the Les Paul that Dick said he sold earlier this year for $200,000 is already worth $250,000 and remains a bargain at that price.  He has seen Les Pauls sell for more than $300,000 and says the only two lefty models, now in the hands of Paul McCartney and tennis champion John McEnroe, could appreciate beyond a value of $500,000.

... He should know.  The Walecki family has been buying, selling and appraising instruments since 1936.  They specialize in every type of guitar from vintage Fender Stratocasters to the still-ripening work of master builders such as John Monteleone in New York and the Canadian luthier Linda Manzer.

"Comparing a modern luthier to Stradivari is not outrageous," murmurs Philip Scott, director of the musical-instrument department at the London auction house Bonhams, running his fingertips along the luminous grain of an 18th-century Stradivarius violin.

Scott says the instrument first sold for perhaps 200 gold ducats (about $400) and is now scheduled for auction in November at a minimum opening bid of $1 million.

"Stradivari created the world's first designer label," Scott adds.  "He had a band of loyal and wealthy followers."

Scott says there's no evidence to suggest that pre-1970 connoisseurs of electric and acoustic guitars and the specialist work of young luthiers such as Nieminen will decline in value.

"Over the next 20 to 30 years, I don't see any reason why some of these guitars won't be regarded as seriously as a Stradivari," he explains.  "The client base certainly exists."

Don Bernstine, guitar-acquisition manager for the Hard Rock Cafe, echoes the sentiment that guitars are more than sound investments.

"There's a huge hypnotic attachment associated with investing in a guitar," says Bernstine, guardian of a collection of nearly 2,000 instruments and includes what he describes as priceless guitars played by Pete Townshend, Eric Clapton and Jimi Hendrix.

"Guitars are significant items in the lives of musicians and those who listen to their music," Bernstine says of the market.  "Guitars have certainly held better value than any tech stock did."

The Seattle Times  • Tuesday, October 7, 2003