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Guitars: financial instruments
October 25, 2011 | By:
Careful with that axe, Eugene – it could be worth a million dollars. Stephen Ward talks about his love of vintage guitars and what he learnt in his time as a collector

Return to Fender: modern guitars may sound just as good, but nothing has as much mojo as an original Strat. Photo by Stephen Ward

At 16 years of age I could stand in front of a music store all day, drooling at the unattainability of the various Gibson and Fender guitars that, at $200 plus, were way out of my budget. I was in a band back then and would have given my right arm to play one of these beauties. (It would have been a little difficult with only one arm, but I was young and foolish.)

In fact, I remember buying a Japanese Gibson SG rip-off and very carefully painting the Gibson logo on the headstock in white enamel paint. It looked pretty good. And from a distance, in a darkened room, I was confident it would fool everyone. Only problem was, it was bright blue and Gibson never made a bright blue SG. But I did manage to fool myself for quite a long time.

I eventually left the group for the love of a good woman two years after John Lennon left his band for the love of a good woman (a different one). But unlike Lennon and the Beatles, my split, in the suburbs of Melbourne, Australia, wasn’t quite as newsworthy.

A lot of good women, a couple of marriages, a few different countries and three decades later, I decided it might be a good idea to revisit my dream of being a rock star.

That dream lasted all of 30 seconds. But what I did discover was that my early obsession with Fifties and Sixties guitars had blossomed into a real love and appreciation of these instruments, the ones I could never afford to own. I might not have had the desire to wear tight leather trousers on stage, in front of a Marshall 100-watt stack. But something still tweaked my rock-knobs.

My 1954 Fender Stratocaster

So what did I do? I went out and bought the daddy of them all (or at least the uncle of them all, if you’re a Gibson fan). I purchased an original 1954 Fender Stratocaster – the first year the Strat was built. It had a neck date of August 1954 and was signed TG on the butt of the neck, in pencil, by Tadeo Gomez — a name that can be found on many Fifties Strats and one synonymous with some of the finest Fender necks ever to be hand-carved from a chunk of maple.

Gomez’ initials are on the neck of Brownie, Clapton’s faithful old Strat, which was sold at auction in 1999 for $450,000. I paid £22,000 for the honour of owning one of Leo Fender’s finest and sold it four years later for 35 grand. During those years, the bug bit even harder and I probably bought and sold more than 30 high-end guitars.

I didn’t set out to buy and sell vintage guitars. It just kind of happened. For a couple of years I worked in an ad agency in New York and travelled back to London every fortnight to spend time with my kids. The vintage guitar pool is far richer in the US, so I would research and buy a guitar every couple of weeks and bring it back to Blighty on BA.

The attraction for me was more about owning and playing these beautiful instruments for a short period of time than it was about making money. However, I was knowledgeable enough to know what was a good buy and (more importantly) what wasn’t. So I made a profit on every guitar I bought and sold. I even saved a tidy sum on import tax as I was bringing these bad boys back as part of my ‘private collection’.

In retrospect, it was also a smart way to change the dollars I was making in the US into pounds without all those silly bank charges.

By 2008, the price of some of these guitars had skyrocketed. I looked at acquiring a ’54 Strat at a Texas guitar show for $115,000. I didn’t buy that one but I did get hold of a beautiful, blonde ’58 Strat two weeks later from a dealer in Ithaca, NY, for $95,000 and a Blackguard 1952 Telecaster (in mint condition) for 75 grand.

The same guy was selling a 1959 Gibson Les Paul for $600,000 and I’d heard of other Les Pauls going for close to a million. But all good things must come to an end. And when the arse fell out of the economy, the same arse fell out of the vintage guitar market.

I jumped early and got my money back on the couple of guitars I still had. But that same Telecaster could now be picked up for less than half the price I paid a few years back.

That’s not to say there isn’t still money to be made in vintage guitars, as long as they’re 100 per cent original. (Any changed-out parts, no matter how small – even a re-soldered wire under the pick-guard – will render them far less desirable and knock thousands off their value.)

As the economy improves — and let’s believe it will — then the prices will rise exponentially. The reality is that they’ll never make another 1959 Gibson ES 335 and there will never be another Leo Fender or Les Paul. Tadeo Gomez died in 1986 without ever knowing how famous his initials would become in guitar circles.

In truth, the guitars produced these days are probably as well made as those from the Fifties. But the passage of time adds something to these chunks of wood that is unquantifiable. The French call it je ne sais quoi. A more appropriate and musician-friendly word might simply be ‘mojo.’