Saturday, March 12, 2016

'HIGH AND LOW'

[Reprinted from my monthly column for Classic Bike Guide, March 2016 issue]
A still from Akira Kurosawa's beautifully shot 'High and Low', a huge influence on cinematographers in subsequent decades
One of my favorite early Akira Kurosawa films is a B&W scandal called ‘High and Low’.  The Japanese Economic Miracle was in full swing in the 1950s, and before he rode off into the Samurai sunset, Kurosawa explored the deep hypocrisy characterizing that period of extraordinary growth. Enormous fortunes were fertilized by a government so bent on economic progress it happily shielded the obvious corruption and environmental damage, accompanied by stagnation of the working classes.  Today he could make the same film in China.
Hanging out with a miniature Indian Board Track racer...which supposedly works!  Adorable, and it beat the full-scale replicas is price!  Go thisaway, replicators...
I’ve camped out in Las Vegas every January for many years, watching with vested interest the classic motorcycle auctions.  It’s my fetish to keep track of oldbike price fluctuations, which has not been inexorably upward.  I’ve watched major price drops of bellweather machines (say, Vincent twins) after the real estate crash of ’89, the dot com bust of 2000, and the Great Recession of 2008.  The price of a good Black Shadow has plummeted from $100k to $30k before, and it can happen again.  Regardless, the general trend is upwards, which might seem a ‘natural’ fact, or a product of inflation, but placing financial value on items with no functional value is anything but natural. Looking at the trends in other collectibles markets, there’s no reason to believe the bike you paid x for this year, will guaranteed be worth x++ in 10 years.  It’s a reasonable gamble, but when I start seeing books like ‘Investing in Collector Cars’ on trade stands at Rétromobile (the PreWarCarbooth no less!), I catch a whiff of 2007, a heady if slightly rotten perfume.
Buddies Andy and Jean-Michel collaborated in the late 1980s; both their work has skyrocketed in value, becoming safe havens for cash in 'bonded warehouse' storage facilities.  Will top-tier motorcycles see the same fate?
Looking at the fine art market, you’d think anyone with a few million to stash would scour the land for spare Warhols and Basquiats, since there are so many, and they fetch so very much.  But dropping one’s binoculars to look at the broader art scene, it’s clear only a tiny slice of that pie is thriving (the ‘smart buys’), while the rest of the market grows stale.  It’s an all-or-nothing gamble in the money game, if that’s why you’re buying or making art... the very worst reason to buy or make it, of course.   The antiques business is seeing a similar shrink/swell of different eras.  It’s well known the old American furniture market, once reliable and considered a safe investment, has seen values drop shockingly in the past 10 years, by as much as 80%.  Friends at Christie's note with something like despair the prospect of their specialty being merged with more successful groups, or dropped entirely.  At Bonhams, the car and motorcycle departments are going gangbusters, keeping the whole company buoyant, while the art, antiques, and jewelry sales are more lackluster, barring a few stars.  It’s the same story at other auction houses, and retail establishments.
A reception for Conrad Leach's exhibit 'Paradise Lost' at the Gauntlett Gallery in London
My friend Richard used to run a fantastic man-cave of a shop selling cool old gear – automotive prototype models, 1930s cocktail sets meant for us while driving, great paintings of Spitfires and Nortons.  He’s shuttered the shop, complaining ‘there’s no middle anymore’; either clients wanted the $100k thing, or the $1k thing, with almost no sales between.  Since he needed that middle to survive, he was sunk, but his sanguine opinion was the business simply reflected the loss of a prosperous middle class; his customers were either ‘making it’ big time, or watching their coins carefully while saddled with a mortgage etc.  Other dealers have much the same experience today, and so it was in Las Vegas this January. 
The 1950 Vincent 'White Shadow' in Chinese Red, which fetched $345k at Bonhams in Las Vegas, January 2016.  Tie a string to it and float away...

With over 1000 old motorcycles on offer, there was something for everyone; from a MTT Y2k jet bike to a lineup of nicely unrestored British twins.  But ‘everyone’ fell into one of two camps; those with $50k and up to spend (repeatedly), and those looking for a bargain to take home.  Many of the high rollers were dealers, buying for wealthy clients or hoping for a quick resale.   It was clear the same small group of bidder numbers dominated the proceedings, peppered by a miscellany of one-shot bidders - the ones who looked genuinely excited when they won a bike, usually for well under $30k.  It was, to quote Kurosawa, a High and Low affair; individual collectors with money to buy a nice bike, and a cadre (1% anyone?) of deep-pockets bidders.  This is a new development of an old story (called Capitalism), but it’s important to note the old bike market was never like this before, being a fairly level playing field of genuine enthusiasts in the past.  I suppose investors are enthusiasts too, if only for more money, which is the worst reason to buy old motorcycles.  I’ve said it before; bikes make lousy sculptures, as the magic is the riding.  Keeping a bike static misses the whole point.  

4 comments:

jerrykap said...

Insightful as always Paul. You've given me lots of new angles to wrap my head around. You make all these disparate topics meld together beautifully.

But, contemplate this, with the substantial numbers of collected motorbikes filling the world, how can they all be used as the makers intended? All the old issues of unreliability, poor metallurgy, under engineering etc. etc. are only abated somewhat with modern upgrades. It would take a truly dedicated collector to exercise their machinery faithfully and often. Isn't it enough that most of them remain in a state of preservation and conservation with owners gushing over the halcyon days gone by as a tribute to the engineers, factory owners, workers, dealers racers, adventurers, bon vivant and slimy greasers of long ago?

If all these old crocks were still on the road my life would be far more entertaining as I would be stopping regularly to offer assistance. I'm OK with treasuring the old ones and enjoying the new ones. I just don't like it when it's about profiteering.

C-ya, Jer

PS Speaking of which one of our good collector friends is about to pick up his brand new Motus and break it in with a 1000 plus mile ride home. I'll bet he'll do it trouble free.

The Vintagent said...

Jerry, of course you're correct that old bikes won't be used as much as they were when new, but they should still be used, as the maker intended. Not all of them all at once, but when appropriate, and as possible; they're so much more fun that way.

You're of course noting that it takes dedication to keep an old machine going, and my hat is tipped to all who try. We see several bikes fail yearly on big group runs, typically from very simple maintenance problems, or sheer neglect. But the majority soldier on, under enthusiastic owners. There was a time when Every owner was dedicated and educated in the necessary arts of maintenance. Now such knowledge is exotic!

I don't have an issue with profit; I made pocket money for decades fixing up/reselling old bikes. My issue is really with uninterested investors who warehouse valuable artifacts as a way to hide excess cash...

Anonymous said...

1) I completely agree with your comments here .. but ..

2) I am detecting a bit of logical inconsistency here . Not more than year ago you were extolling the virtues of rapidly escalating prices ... the next you're rightfully condemning the reality those prices are creating . So whats brought you back around to reality Paul ?

3) On a previous confrontation may I suggest you read the FIM/FIA equivalency formulas before expressing an opinion good sir ?

4) And just so you know ... despite recent events ... you're still top drawer in my book !

The Vintagent said...

Reporting on rising prices in no way constitutes an endorsement. It's a big story in the old bike world. There are benefits to the higher values: greed ensures that no old bikes are discarded today, the most valuable ones are in fact being recreated faster than they're being destroyed! But the downside is attracting investors with no interest in riding, maintaining, or developing a relationship with their machine, or the culture which has kept them alive all these years.

Discussion is not the same as conflict, unless that's your inclination - it's not mine. And I do my homework.