Pipes: Hobby or Investment

[juanruiz]

I have collected coins for over 50 years, and one thing I have learned is that, unless you put 4-5 figures into a coin (e.g., a Pine Tree Shilling), its value is not going to grow enough over time to really call it an investment. I'm wondering if the same can be said for pipes. Many of those I bought in the 70s were reasonably priced. My Sav straight-grain autograph, for example, was about $125. Does anyone here buy with the intention of holding and selling? Or are you like me, who just enjoys a nice smoke and the craftsmanship that went into the pipe's making?

 

[pruss]

If you're looking for ROI, then you probably shouldn't be investing in pipes. Especially now. Very few pipes appreciate in value, with most estate pipes re-selling for half or less of their initial SRP. There are a few, very few, pipes which will appreciate in value.
If you truly want to buy to invest, then you should be buying tobacco. Tobacco will never be cheaper than it is right now, and it will only be harder to find as tobacco legislation continues to restrict where tobacco can be sold and consumed.
-- Pat

 

[pipesdownunder]

Can anyone think of examples where estate (even unused) pipes are work significantly more while the artisan is still alive/working? (to further the question juanruiz!)

 

[seacaptain]

I think you're spot on about coins and it's one of the dirty little secrets. Dealers always try to portray coins as an investment, when they aren't. The only people making money off of coins are the dealers.
About pipes, I think they would be an even less ideal "investment" than coins. I say buy what you like and enjoy it. It's just a hobby.

 

[captainprophesy]

I say buy what you like and enjoy it

This right here.

 

[juanruiz]

"The only people making money off of coins are the dealers."
True. There is one national coin company selling the 2015 US proof set for $46, when it can still be ordered from the mint for $33.

 

[aldecaker]

To me, pipes are an expense and tobacco is a hedge. If you buy more tobacco than you can use immediately, you have product that will at least retain its value, if not grow. I think of it like airlines think of buying fuel: buy way more than you need at today's price (bunkering), betting that it will be more expensive next week or next year.

 

[ron123]

If you make a profit from selling an estate, it tends to be luck. That's not to say that you shouldn't consider resale value when buying pipes though, because some do tend to depreciate more than others. For example, J.T. Cooke's estate pipes typically sell for close to what his new pipes cost. If you buy an estate Dunhill, you will probably be able to get back what you spent on it. For most brands & makers though, the typical average new pipe, should get 1/2 that price back when you go to sell it as an estate. So yeah, it's hard to make money if you wanted to try to buy with an eye on making a profit when you go to sell. Exceptions happen (Jess, and Bang come to mind), but trying to figure out the next "exception" requires a crystal ball or a lot of luck.

 

[jpmcwjr]

Commodities, such as grains, iron ore, fuels all fluctuate in price. Pipe tobacco probably would if it weren't for the spectre of regulation and drop in production. Tobacco also ages well, but most commodities do not. Some absolutely do not; think of milk!

 

[xrundog]

Artisan pipes from popular carvers generally hold value pretty well. By that I mean they won't depreciate as much as some of the factory pipes. Even smoked some can appreciate. But not most.

Money can be made on estates. But you have to know the market and be adept at refurbishing pipes. In the past I've bought pipes with the intention of flipping them. Sometimes I made good money, sometimes not. I gained enough to fund the hobby, but not enough to live on. That was really the goal. I think the people who make a living in the pipe market work harder than I want to.

Right now I buy pipes I find interesting. When they don't work out for me for whatever reason, I sell them. I like to break even if I sell them. Maybe make a little for my time and still give a good value. It doesn't always work out. EBay is a fickle mistress. I've been happier selling on the forums.

I think I'm ahead overall.
Buying pipes as pure investments would probably involve buying the upper tier pipes and not smoking them. That doesn't seem like fun to me.

 

[plugugly]

I'm with aldercaker on this; but I do think jarred bulk is dicey to appreciate whereas tins are a no brainer.
Plugugly

 

[aldecaker]

@plugugly- Just wait 'til the Tobaccapocalypse! You could probably sell your bulk stash packed in old Vienna sausage cans. :D

 

[georged]

Barry Levin, literally the "inventor" of estate pipes (he even coined the term), was asked the investment question often.
His answer never changed: "If you buy a pipe because you like it---meaning the pleasure you get from owning and smoking it IS its value---you will never lose a cent. If you buy a pipe as an investment like a share of stock, hoping it will appreciate, you're an idiot."

 

[cosmicfolklore]

+1 Georged

The times pipes have appreciated over time, minus inflation, usually means that a pipe might have broken even in the long run. There really aren't very many time pipes have gained enough value to offset the value of the original price. In other words, you will not get rich off of investing in pipes. However, if you just like the joy of making a sale, and you enjoy all of the legwork that goes into it as a hobby, then by all means...

 

[gloucesterman]

One aspect no one has considered is that over time inflation can make pipes worth much more than was originally paid for them. As an example a GBD Speciale sold for about $15 in the 1960s. Today examples often sell in the $50 -60 dollar range or four time their original cost. So as George pointed out, if they please you now that is a value in itself and as a bonus your children can probably recover at least what you spent, provided you live long enough. So PAD might not be such a bad thing!

 

[mso489]

For most of us, pipes and tobacco are an interest (or hobby) and an expense. Making money at making or trading pipes and/or tobacco is like any other money making proposition. It requires loads of hard work and is risky. I wouldn't expect to be smoking any of the pipes I'd be buying as an investment, new or estates. Once you regard them as your inventory, the relationship is strictly business. Pipe smoking would be something separate, on your own time away from the office. I'm sorry to be such a grim-ass about it, but business is business.

 

[dustmite]

@ gloucesterman, $15 in 1960 translates into $119.80 in today's money, meaning that you still lose over half the value. I don't look at pipes as an investment. Some people do seem to make money selling pipes, but the trick is in buying at a reasonable price to allow selling for a profit.

 

[georged]

G-Man,
Out of curiosity, I just now put $15 in 1960 through a .gov inflation calculator, and it came back $120.93
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=15&year1=1960&year2=2015
Then I went to Somker's Haven's estate page to see what a typical billiard-y Speciale sells for today (Premal has a huge number of old GBDs, so his prices are realistic and normalized)
The result? They cluster---you guessed it---right around the $120 mark. :D
http://www.smokershaven.com/englishestates.aspx
So, pipes as an investment? Not so much.
As a GOOD VALUE? Absolutely. There aren't many things you buy and use for half a century and reliably re-sell for what you paid.

 

[warren]

Neither, pipes are a tool for delivering smoke, ultimately the nicotine. Like any tool I buy it must be made well, look "right" and do the job.

 

[deathmetal]

Take half of what you spend on pipes and dump it into IBM stock or something