The News from ElephantToenails.com

Got the “heads up” the other day from a collector who has ordered a swellcenter custom made. I thought it was a cool idea and was surprised when a couple of weeks later was contacted by the actual knife maker. He confirmed the order and expressed his excitement about producing a custom made swellcenter toenail.

I have yet to ask permission to annouce the knife to the world at this point, but feel I can share with you some behind-the-scenes photos of this baby as it is being made.  This unique maker specializes in the old patterns- multiblade folders- and told me his favorite is the toenail. I’ll get the actual specs soon and hopefully will be provided additional shots of the final stages and finished produced. In the meantime, check out the creation of this old style swellcenter-

No this isn’t a Bud commercial, instead it is my fulfillment of my promise to a recent request.

As I posted earlier this week, I had a new collector want to see a toenail in hand (so he could show his wife how big toenails are). I have two confessions here- one is I am a terrible photographer and two, I only have time to play knives at night so the lighting stinks. I had to take the photos left handed which is hard due to the camera being made to push the button with your right hand, plus it is an bulky camera at that.

Anyway, you see how the knife is a handful, but honestly it fits like a glove. To me the toenail being a working man’s knife was perfectly made to fit the contours of the right hand.

Can you guess the knife I am holding? You probably guessed right. It is in my all time favorite standard style toenail (non-jumbo, that is).

I acquired it last year from a fellow collector who was raising money to buy a car or something…..really I don’t remember what he said, but you know as well as I do he could go out and nearly buy a car for what I had to pay for this pearly. While there is a bit of rust on the bolsters the knife still has original finish on the blades and is the best conditioned Case Brothers pearl I have ever owned. While the famous trademark XX is not stamped out on the blade, the rear tang is stamped TESTED XX.

As most of you are aware Case Brothers made this knives shorter than most other manufacturers. It measures out at nearly four inches long closed.

Part Two: Price vs. Value

In Part One of “What is Price,” we were reminded that WE are the demand. It is the buyers who determine value and buy at our price (most of the time). I realize in the real world it is more balanced and takes a willing seller in order for our “price” to be acceptable. I am not talking about going around slinging low-ball offers just because we determine what a toenail is really worth, but it is not the opposite either- a seller demanding his price just because he has a rare toenail “for sale.”

In Part Two I want us to examine how price and value compare, if they do. So, let’s start with What is Value, What is Price and aren’t they the same thing?

In layman’s terms, Value is what something is worth as supported by “the market.” Price, on the other-hand, is what is expected, required or given. It may be more or less than its value. Furthermore, price often follows value, not the other way around.

Say, you NEED a Case Brothers stag (5250) to complete your Case Brother toenail collection. You locate one from a dealer who 1) Recognizes you NEED it, or 2) isn’t motivated to sell it below a number at which he is willing to keep it. You are a highly motivated buyer and he isn’t. So provided you can come to terms is the price you paid representative of the value of a Case Brothers Stag? Probably not. Its value put you in the ballpark, but it is likely this seller is wanting a premium and you are willing to pay it. In a more typical situation, the buyer wouldn’t be willing to pay the sellers above market value, thus the sale wouldn’t have been consummated.

More-often than not, what we run up against is a seller (usually a dealer, but not always) who wants to command a premium price and this often results in the knife staying for sale for a while. In fact it will either stay for sale until one of two things occur- the seller eventually gets right or a buyer finally gives in and pays the price. Sometimes enough time has transpired for the value to have caught up with the price. I saw this in real estate many times prior to 2006.

I personally know of a seller who had some fine toenails for sale. He admittedly didn’t care if they sold or not (which strikes me odd). His prices we above market value resulting in him carrying the toenails around from show to show for a least a couple of years. Finally the values came up close enough to his price that he started selling them. So, was his price the real value? Obviously not, otherwise, they would have been snatched up the first time they were displayed.

Fellow collectors, don’t fall victim to the notion that “there are so few collectors that it takes months or years for a rare toenail to sell.” That is wrong. We are lead to believe this oftentimes by dealers who attempt to justify their price. Take for example, Jumbo Swellcenters, one of the more expensive toenails among collectors, I know of at least 4 sales just this past month. So the one that remains for sale for a long time, either doesn’t have strong demand because of something about the knife, or is overpriced. It is not that there aren’t many collectors who can afford them. Joe Seale told me years ago, he typically doesn’t keep a Jumbo for more than 30 days.

There is no doubt toenails are not a life staple. We don’t live or die as a result of not getting a particular toenail. But because of this, defining our “need” for toenails is much more difficult and can lead us to paying a price that isn’t supported by the market (and many times this is OK with us).

Price is more subjective, whereas value is more objective. Price, at the end of the day, is the amount an individual collector, or dealer, is willing to pay or sell for. Value is much more broad and is a price that is supported by the market.

Collecting is emotional- not rational and can cause collectors to pay a price that is a perceived value, but may not be market value.

This concludes the two-part series on “What is Price?” I recognize no earth shattering revelations were announced, but it is important to understand the difference between price and value, how price is determined and whether or not that price represents the market as we continue on our toenail quest. Reminding myself of these truths helps me to calibrate when I lose focus and perspective, which happens almost every time I run across a new toenail to buy.

Part One: WE are the Demand!

I wrote this article several months ago, however, haven’t felt it was “time” to run it- Well now I do. My prompting was a email I received yesterday from a collector asking me about a toenail he was being priced to buy. This collector indicated he was offered this toenail and thought the price was too high and wanted to know my 2 cents. Well, it fired me up!

This collector was being offered a jumbo for about 25- 30% more than any toenail of that style has sold for (and we track them closely) and this equates to a bunch of money considering what really good Jumbos are selling for. I told my fellow collector in no uncertain terms- “No, the knife wasn’t worth that price if you want to use recent sales as the basis.” I know there are times we use other factors to help us individually determine the worth of a knife, however, if you just look at “comps” then we have a very good indicator as to what other collectors recently paid. Then there is the “What is it worth to me right now?” question.

We know the number of Toenail collectors is continuing to grow each year. Toenails enjoy a very high degree collectibility and popularity. From all indications I can see (from visits to my website, conversations with dealers and collectors, bidders on online auctions, etc) it will continue in popularity.

One of the benefits resulting from this popularity is a large enough group make up toenail collectors that enable us to make some things happen. It wasn’t too long ago, a dealer might have for sale a “once in a lifetime” offering of a Jumbo Swellcenter (or any other toenail, for that matter) and would stick a really big price on it. Then the collector (buyer) not knowing how long it would be, if ever, he would find another one like that bought it. The price was typically secondary in the decision and was pretty much dictated by the dealer.

You are familiar with the old economic principle of Supply and Demand. Well, WE are the demand.

I am convinced the supply is there and now we have the opportunity to drive our own market, instead of being a victim to the prices/values of the dealers and price guides. In the past we were told what values were, what brands have the highest value and which ones are the least popular, etc. In the past we have been told… “well this toenail is priced at X because of Y,” which may not reflect what we as collectors judge is important.

In the end it is the Buyers who determine value and the factors that are important in knives that are purchased…not sellers (I confront this issue of how value is determined almost every day in my “real job” of meeting with real estate owners who think just because they spent X on their “premier property” then it should be worth that, well…the harsh reality is if no one buys the property (after a reasonable period of time) the conclusion is it simply isn’t worth X. Period end of story).

My goal is not to start a rebellion, but here is a real fact: In most cases toenail prices are being set by “Price Guides (mine notwithstanding),” instead of the price buyers are actually paying for these knives. It is not uncommon for the writer to take a few sales to help them in their assessment of what has happened to values, but just due to the sheer number of patterns produced it is impossible to make it much of a science.

Moreover, many insiders attempt to “drive the market.” Just because 88’s (what ever the heck that is) went up X% doesn’t mean toenails experienced the same value change (it could have been more or less). I am well aware of “record prices” periodically paid for toenails and I do my best to keep my ear to the ground in an attempt to see where values are going and what is happening as it relates to toenails. Yes, I know of a few record sales for extremely rare toenails , but those sales are also the exceptions rather than the rule, and furthermore, don’t necessarily “set” the price for the rest of the approx. 100 other brands or 300 different variations of older toenails that are out there.

Bottomline: WE are the demand and we decide what a particular toenail is worth.

Part Two in this series on “What determines Price?” will be posted this week entitled “Is there a difference between Price and Value?”

In our recent ET.com survey it was interesting for me to see a the majority of you indicated the topics of The News were just right- not too basic and not too advanced, however a handful of you indicated a desire for some “meaty” topics. Well you know advance level courses in college (graduate and doctoral level courses) don’t always give you answers as much as teaching you to THINK.

So, with that here we go and, while I don’t profess to be a doctor of toenails, I thought I’d let you into my world……hang on tight and DON’T JUST SKIM.

Let’s begin by asking: “Do you ever wonder which knife company invented the toenail?” I do all the time. I have been running this rabbit for years now and have declared this to be my quest. (more…)