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Luke

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  1. A Hamer endorsement = paying cost, not free. Since Hamer is presently in the middle of a take over it is highly doubtful they will be taking on any new endorsers at this time. Since the new company is Fender, obviously the new policy will be reflective of Fender's policies on such issues. In a nutshell, being signed is a nice personal accomplishment but not overly impressive to companies where everyone of their endorsers have the same or better pedigrees. Will you be playing big gigs in front of lots of people, or be on MTV, where giving you a free/discounted guitar will come back to the company in advertising value?
  2. I don't understand the, "if they won't do X, I'll go with another brand" mindset. NEWS FLASH, if they said no to a request they are ENCOURAGING you to go away with your request. Hamer is notorious for their quirky custom order issues. When business is slow they will build almost anything, Watson anyone? Remember when they would NEVER do boomerangs again? It's simple, they have to complete three guitars a day. As long as they have their quota, the answer is either NO or bend over.
  3. East of Eden Ultra Blue (they appeared on Star Search)
  4. The vintage hysteria is based on age and brand name. Back in the 1970s and early 1980s, 1950s Strats and Les Pauls were used guitars, there was absolutely nothing desirable about that. As time passed, the mere fact a guitar was 40 years old made it instantly collectible. I have played many vintage instruments, many of them prior to their becoming investments. Some were good, a few were great, some were terrible, and most were average. Just like when people are polled and 98% of them consider themselves above average, we have to ask then where are the dogs? I would not desire to own a vintage piece a this time. First of all, there are many many many fakes out there, fakes that are so good they fool many of the experts. Secondly, a guitar is only part of the signal chain. The signal chain begins with you, the way you finger a note, pluck the string, add vibrato, etc. The signal then passes through the guitar to a cord or wireless, which then goes through potentially several pedals, into an amplifier, which may have effects in its loop and through a series of tubes that may or may not be NOS vintage, etc. In other words, the guitar itself is just a small part of the end tone. It seems illogical to spend $90,000 for one piece of a puzzle where that singular piece only represents 25% of the end result tone. If we were to invest an equal amount into the other 3/4s of the tonal variants, we would all need to have formal musical educations and Dumble amplifiers to round out the scenario. I'd rather have a $2500 Hamer and $96,000 in the stock market where I am diversified and do not have to worry about someone stealing AT&T while I am at work or Microsoft burning to the ground. To me it is far too speculative to be considered a long term investment. One expose of a company pumping out fake 1959 Les Pauls on 60 Minutes would make the market tank in hours.
  5. While people will always say only a Les Paul sounds like a Les Paul, the truth is there is so much variation from one to another that the statement is at best a generality. It is always amazing what people claim to hear, but when push comes to shove and they are forced to blind test using clips they are only right 50% of the time. Tone is the end result of the guitar, wiring, amplifier, amplifier settings, speakers, speaker cabinet, etc. You can adjust the tone controls of the amp normally, so it is usually possible to get a very similar sound if one tries to do so. I would say they are 75% similar and can be made to sound far closer with a reasonable amount of knob turning.
  6. I would never consider altering the terms of my auction.
  7. I believe it all grinds down to money. Is an artist willing to go out on tour again to play those same old songs, even though he knows he lost it decades ago? Surely that depends on what he saved, his standard of living and his prospects in the future. How many bands now do the casino circuit? I saw an ad for Billy Idol at Foxwoods, how rebellious! When you sink to the point where you will play for the people you grew up hating (the establishment Wall Street weekend crowd) you have to rethink your own choices up to now.
  8. If BCR Music was going to have an IPO there would be a strict set of accounting standards which you would have to abide by. If a mom and pop operation want to compare apples to apples, they have too have to adhere to the accounting standards to determine what their business is truly worth on an open market. If you take the 2005 net profit for BCR and divide it by 1000, what P/E would you come to? Compare your number to the market average of 29 to see how you are doing versus the business community in general.
  9. Greg, you complain about business here often. If you were able to be rent or mortgage free in your business, wouldn't that make it more profitable? If this Val person is not accounting for the costs that you have forced to endure, he is not making an honest assessment of his business. Ironcially if Val's net is higher as result of low fixed costs, he is giving at least a 1/3 of that benefit back to the government in the form of income taxes. My question all along has been, would a guy like Val be interested in the business if he had to endure all of the expenses a guy like Greg is forced to absorb? If you are born on third base don't tell the world you hit a triple.
  10. [*]In other words, the company has a half-century of continuity, doing the same business in the same location. People put very little value on this anymore. Your parents were impressed by issues like these, today's kids do not seem to care about this. [*]In other words, customers know where they are, how to find them, and know what they carry. While this may aid in customer retention, it does very little to build new business. America is a transient society and playing guitar is youth oriented business, you have to keep replacing the lost customers with new ones. [*]In other words, Val, the current owner and son of the founder, was born into this family business, and he knows his shit, both in taking on new franchises and just about anything you'd want to know about vintage guitars or amps. The store's been around since current vintage was brand new. Is he making the same money his father made (inflation adjusted)? I doubt it. [*]In other words, this store has weathered any number of boom and bust cycles. The store incorporated within a couple years of the advent of rock 'n' roll, and has been proffering guitars through the folk and surf movements, the British invasion, psychedelic rock, folk-rock, disco, fusion, punk, new wave, techno, heavy metal, grunge, rap, hip-hop, u-name-it. The invasion of the big boxes is not a business cycle issue, it is a reality of modern life. You can find thousands of hardware or paint stores that survived business cycles to then be killed of by the big box. [*]In other words, the store has been around long enough to have everything in place--entry-level, pro-level, used, vintage, a full-time luthier, and a vigorous teaching program to cover all the bases. This is actually the only issue you raise that may have some factual basis to support a future. Being well rounded and exploiting the nitches the boxes are not interested in is the key to survival. Val is well into middle-age; his father died about 6 years ago. As for keeping insurance current, I personally know of enough incidents of vandalism, attempted shoplifting, and accidents there that I suspect they revisit their insurance policy pretty often. It is not a gaggle of spoiled kids coasting on Daddy's legacy. It's run by a son who grew up in the business who has consistently shown that he has plenty of business acumen of his own. You just said you simply "suspect" their insurance coverage, so that means you do not know and your speculation is no more valid than what I said. Your assumptions are presumptuous, invariably negative, and all wrong. You are yet to say one word about whether this Val guy is making any money, whether his income level (inflation adjusted) is on par with what his father made and if he pays fair market rent for the property. It could be Val's mother still owns the property and she does not charge him fair market rent, or if both parents are dead he may have inherited the propery. Either way, he has to account for a rent expense to determine if the business is viable. Say he got the business, the inventory and property all for free via inheritence. The property could be sold for some amount, that amount could create interest income. The property could be rented to someone else, that would produce some form of income. If we take Val's net income and subtract out what either he loses in interest income, or what he under pays in rent, what would his net income become? Being able to survive a business cycle because you are debt free is different than running out the string indefinetely. The boxes are not going away, the rules have changed and for a business to viable long term the profit margin has overcome all of the aforementioned issues. To justify the hours, exposure to risk and aggravation you need to see a 50% margin, not 30% and another 7% due to nepotistic luck. The simplest of questions is, whould Val's father have entered the business 48 years ago given today's business reality? I truly believe he had visions of success greater than that are acheivable today.
  11. Look at it from another point of view. Suppose you had a job that was paying you $60,000 a year. Would you look for a $30,000 a year job to replace it with? Of course not, you'd want to make more money at your next job. When families keep a business open for memories sake in the face of economic reality they are doing themselves a disservice. Suppose the parents absorb the lost rent to the cost of $24,000 a year. Not only are the parents losing the rental income, but they are also losing the interest income they could be making from having the $24,000. The value of the business is not increasing because any potential buyer will see the books and see the lack of realistic rent. The business property is not increasing in value at the same rate as its neighboring properties because most commercial real estate sales today are based on 10x annual rents plus $200,000. By having artifically low rents the parents devalue their property. Any bank lending money to a buyer will demand tax returns dating back 5 years from the parents to determine the rental income. The parents will have a hard time finding a customer who can come to the table with a 50% down payment, which is what they will need given the tax return information. So while the parents could never sell the property for its true value given their actions, the children will absorb the true value at inheritence time. Let's say the property is worth $500,000 if the parents were collecting the $30,000/year rent the market should bare. If the parents sell, the fully depreciated property would be exposed to $75,000 in capital gains tax, putting their net at $425,000. By charging the children only $500/month rent the bank sees the property as having a value of $260,000, which means they would lend a maximum of $208,000 to a potential buyer. Therefore you need a buyer that has $292,000 cash, which would be a 58% down payment. Now suppose the parents die, the property would be valued based on the square footage for the area. The children would have a $500,000 charge against their inheritence amount, even though they could never realize that number even with a $500,000 sale price. It is a lot more complicated than people think. A business is simply a job you own. The point of your employment should be economic gain first, enjoyment second. When you confuse the purpose of your work you make bad economic decisions that have long lasting consequences. If you can make more money working less hours for someone else, it is not viable. The time away from your friends and family have an economic value. You have to make more money than the customer who has a simple 9-5 working for the town, who has no downside risk other than being terminated. Many once successful businesses are kept on life support for so long that the family fortune is lost in the end. People simply refuse to see the reality that is right in front of them, the market has changed and while an idea may have been great 40 years ago, today it is no longer viable. There are always exceptions, the people who bet the odds, acheive the American dream, etc. Just be sure you are willing to lose all of your savings, potentially go bankrupct, maybe lose your wife and kids as a result of being broke and a future of bad credit before you jump in.
  12. In other words, the building is long paid off. The children are either paying no rent or artifically low rent, covering the taxes and insurance only. I'll give you 50:1 odds they have not increased their insured amount in the past decade and thus they are under insured by at least 50% to the true real estate value at this time. Very few people say to their agent "you know with all this real estate appreciation I think I should double my coverage (and monthly bill)". If the parents are subsidizing the rent by $2,000 a month to keep the doors open it is not a viable business, it is romance gone bad.
  13. It would appear that the industry is very mature. You cannot buy cheap enough to do high volume, mail order and Guitar Center have the bottom of the market. You can go upscale like Willcutt, but that is expensive inventory that turns slowly. Many manufacturers will not talk to you without a large intial order and a guarantee of future sales of a given volume. Companies like Peavey and Fender want you to carry their entire lines, so I hope you wanted to have a PA department. Small stores that are still around seem to have cultivated a nitche. The one music business that seems to do well is high end basses. It seems like the dealers of Ken Smith, Pedulla and Fodera carry very little inventory, almost all sales are custom orders. Customers will be strictly price shopping, but even if you you only make 20%, it is guaranteed money because you collect a 50% deposit. There will always be a market for lessons, and it is the lifeline for many operations. If you attend a luthier school you could dabble in repairs as time permits. Opening a music store at this time is buying yourself a 60 hour a week job. You will be forced to stay open at least until 8PM and you have to open on Saturday if not Sunday as well. If owning a music store is a life long dream, it maybe worth the time and risk. If you were willing to relocate I'd image you could find fifty small music retailers willing to hand you the keys if you take over the contracts, leases and other payments. In other words, you will not become rich anytime soon. It has to be a calling, like the Priesthood, because the money is no longer there to be had.
  14. Very few bridge styles allow for such human error to occur. If you purchase a TonePros it will be pre-cut (in the center).
  15. You're being "cute" here right? I read his post as a "Devil's Advocate" - here's what some do, semi-cautionary kind of thing. In no way did I interpret it as an endorsement of such a practice, nor as a statement that should impugn his character suggesting this practice would be acceptable to him. I'll give you the benefit of the doubt Greg and allow that you're just making fun here -- anything else would really disappoint me. I believe he is showing his "holier than thou" attitude. My response was very tongue-in-cheek, it obviously went right over his head. The lay of the landscape has changed. The concepts of integrity and honesty have fallen to wayside, ebay is just the microscope. For some reason people believe caveat emptor is a passe concept, but at no time in history has that theory need to be considered more strongly. We use to be proud and "ignorance" was for idiots, now it is a catch all excuse to facilitate any deviate behavior. I truly believe this is a result of populace seeing the leadership, private and public, use ignorance as their get out of jail free card. How can you expect absolute honesty on an internet flea market when you cannot get the same from your employer or government? So my advice is make your maximum bid to factor in the worse case scenario and if the item arrives better, great. Unfortunately the entire feedback issue has been diluted. If you leave a legitimate negative, you can expect to receive a retaliatory negative. Now that ebay allows you to pay $20 to have a negative removed, it just shows how you can manipulate the truth one way further. If you do not enter a sight unseen transaction using caveat emptor, you as the buyer are the one exhibiting the ignorance.
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