hifi as investment?


Well sort of. I am just starting out in this hobby and having already exchanged a few used components I bought here and later sold- sometimes for the same amount I paid- sometimes for more-

Seeing this has made me consider the idea that one could approach this hobby's acquisitions as a sort of currency. Considering the ease with which many popular components are sold- SCD-1, De Capos, etc. I have begun to realize that it is possible to approach an expensive system with the rational (if art is not enough) that ridiculously expensive components are just another form of money- a temporary resting place for your reserves (of course this considers purchasing used and at a fair price).

I'm looking for nominations. What components are most depreciation proof once they have taken the hit of being used? I want to rationize an absurd purchase and enjoy my monetary reserves while retaining my safety net.

Does anyone else approach it like this? Used Elrods? Don't get me wrong, I'm doing it for the love of music, but a $15000 system requires some consideration of financial prudence right?
wheeler

Showing 2 responses by kurt_tank

Ok, given the new, revised topic of what used equipment best holds its value (new equipment will never hold its value, as like a car, once out the door it depreciates immediately), can be used for a while, perhaps a few months to a year and can then be resold for virtually the same price paid:

I recommend that units that require little maintenance (which rules out most tube amps, except preamps, as the tubes last for many years typically). You can buy the tube amps, and they do sound great, but if you have to replace the tubes, it can cost hundreds, perhaps even thousands of dollars, and you are in this to get a free ride as it were, so I recommend against it.

Therefore, I recommend:

Good solid state amps and preamps, including Mark Levinson, Krell, etc...

Very good tube preamps, such as Audio Research, Conrad Johnson, etc..

I don't really recommend :

Turntables, (The cartridges do wear out, and the arms can show signs of use very quickly. If the table is made of acrylic plastic, as so many are, it shows signs of age quickly due to dust being wiped off, and scratching the plastic! Wood can dry out and look aged as well.) But if you insist, I suggest such TT's as the high end SMI (TNT, Aries) or the Basis Deput, or other similar units.

Speakers, but only the highest value, and they need to be in the very best shape for the lowest possible value, as they also double as fine pieces of furniture, such as the Avalon Eidolons. (For some reason, speakers seem to lose the greatest value once taken out the door. They seem to lose 1/3 of the value immediately, and after only a few months, it is not unheard of that the speaker value is down by half. (I know this for a fact, as I was watching the price of the Avalon Eidolons, and Revel Salons and Studios before I purchased my Studios for 1/3 off, and they had not even been taken out of the boxes - in fact they were still sitting at the store, when the new owner sold them to me).

Any cables at all, as they seem to make so many different models each and every year, that after only a year or two, the names start to lose their luster. The caveat here is that if you only keep the cables a short while, you probably can do A/B testing to see which ones you really like. (I bought a less than one year old pair of high end MIT 770 CVT speaker cables only a year or so after they were discontinued, for less than a 1/3 of their normal retail price.)

Digital source components. I recommend against them just for the fact that they seem to be upgrading the technology constantly. The better units do seem to hold their value somewhat, but even those do start to lose value if their own company comes out with a better unit. However, some units, such as the Sony 777es Cd/SACD unit does buck the trend somewhat, although even that $3000 unit can be had for almost half, but it does not seem to be dropping much lately. Other units from Levinson and other good manufacturers also come to mind if you must indulge.

Words of Advice: If you do decide to do this, you must put in your due diligence. You must be constantly scanning all the available used sources, such as Audiogon, ebay, and the used stereo shops that also are on the internet. In this way, you can pick and choose the best available deals, and know what the prices of the different units are actually going for. Don't get hung up on any one piece of equipment, but create a list of items you are interested in and if a real deal shows up, jump on it. You'll find that it will usually be at an auction that this occurs, just because it slips through the cracks. This is exactly how I put together virtually my entire system. I wish I had the money to try what you are attempting, but I have a wife, and a strong desire to remain breathing!)

Remember also, the shorter the amount of time you hold onto a unit, the more value it retains.

Good Luck!
None of the hardware holds their value forever, and even in the short term, they merely lose it slower that average equipment. Take a look at the best gear on this site, and you will see that even the best loses its value over time, albeit at a slower rate.

The only possible way to invest in HiFi is in the software. (Buying limited edition records, CD's, etc...).
Had we all had the vision to have bought all the MFSL records, and some of the gold CD's we could lay our hands on, and stashed them away, we would all be quite rich right now!) These MFSL records and CD's have gained in value quite a bit from their original purchase price. (I have an unopened MFSL Rolling Stones box set that I bought for $100 about 12, and it is currently worth 7 or 8 times that amount! But then again, who would have thought they could have gone bankrupt. If they were still in business, my collection would only be worth what they are currently selling it for. And, yes, I know they are back now, selling SACD's.)

However, even this plan has a flaws. The first flaw being, what if that standard is replaced with another technology that TRULY is better. For equipment this is a given, it will always get better, or at least it always has in the past 100 years or so. Even for the Software, this is somewhat true. As an example, old 78's, and to some extent old 45's, are still worth money, but who buys them other than for collecting and completing collections? (Take a look at the Audiogon "music for sale" catagory and you won't see any, at least I have not!) LPs are a different story, because while CD's are easier to handle and less fragile, they are not better. SACD's have narrowed the gab considerably, but still LP's rule (at least in my system.) Please don't flame me for that last statement, as everyone has a different opinion on the subject!

The second flaw is, what if they keep making the limited editions? If you have 100 records stashed away bought at retail prices, they are only valuable if they stop making them. If they don't, then you have no chance of marking up your inventory and making a profit. As long as the consumers keep demanding a product, they will keep making them, or at least the most popular items. As an example, see the current LP market. They are still making records, when 95% of the market is only buying CD's. Only us Audiophiles (and Hip-Hop fans, go figure, huh?!) are buying records. We continue to expand our collections, (and our circle of friends who listen to our analog systems, and make that leap themselves), so the record compnaies can continue to make the records for us to buy. I went to the Home Entertainment Expo and bought $250 worth of records, some priced no more than the CD (i.e. Iron Butterfly's In-A-Gadda-Da-Vida - $10. Yeah, yeah, I know, dating myself. BTW, lousy recording, but I still like it). So even if you had stashed a copy away, only those true collectors would be interested in it. I would, and did, buy the latest reproduction, rather than pay a marked up price to buy an original issue.

The art world is currently experiencing this same problem, with limited editions seriegraphs. lithographs, etc.. Because the artists are continuing to make new originals, and subsequently and making hundreds of limited edition copies, they have diluted the market so the limited editions are not worth nearly what you might think they would be worth.

Sorry to be so long winded, but anything I can do to dissuade you from going down that path will be worth it to you in the long run, trust me.