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Getting the axe: guitar collecting can rock your investment portfolio.

Anyone who's ever heard a Jimi Hendrix solo knows that guitars can produce fantastic sounds, and anyone who's ever ogled the curves of a Fender Stratocaster will tell you they're mighty stylish as well. But the instrument's appeal goes well beyond its visual or sonic charm, its practicality or even its ties to musical history--it can also be a highly prized collectible. Certain vintage models are often regarded as investments, much like antique chairs or Impressionist paintings. Perhaps this is why so many people who start out with a youthful passion for playing end up happy victims of what Walter Becker of the rock band Steely Dan once drolly referred to as "GAS: Guitar Acquisition Syndrome."


Look among the ranks of those who've caught this particular bug, and you'll find a surprising number of chief executives, most of whom aren't professional musicians but all of whom grew up with rock music and are now helping to drive the vintage market upwards. Take Microsoft co-founder Paul Allen, for example; his collection includes the white 1968 Stratocaster that Jimi Hendrix played at Woodstock in August 1969. Bought from an Italian disk jockey for $1.3 million, that guitar is now the centerpiece of the Allen-funded Experience Music Project, a Seattle rock 'n' roll museum and historical foundation that opened in 2000.

Allen may be America's best-known executive guitar collector, but there are lots more. Frank De Fina, president of Panasonic Systems Solutions Company of America, conservatively estimates that his collection is "in the dozens." Its highlights include a 1939 Martin D-18 acoustic and three electric models lusted after by collectors worldwide: a 1953 Fender Esquire, a 1956 Fender Stratocaster and a 1959 Gibson Les Paul. With such a large number of treasures on hand, storage became an issue. So a few years back, De Fina bought a bank vault to house his collection. "Bank vaults are more readily available than many kinds of vintage guitars," he quips, "and they're a lot cheaper, too."

Tom Simons, president and creative director of Partners & Simons, a Boston marketing firm, doesn't have as extensive a collection as De Fina, and regards himself as "a guitar accumulator" rather than a collector. Still, the dozen instruments that he's accumulated would probably strike most people as extravagant. One of them, a Danelectro Bellzouki electric 12-string from the mid-'60s, is described by its owner as "not playable but fun to look at." Comments like this, by the way, are a sure sign that GAS has taken hold.

Henry Juszkiewicz's early interest in playing and collecting guitars was so strong that he ended up buying a guitar company; since 1986, he's been the CEO of Gibson, makers of the legendary Les Paul, among many others. His collection now numbers "around 40," mainly Gibson prototypes, including two models designed by country great Chet Atkins. Juszkiewicz confesses that he owns guitars besides Gibsons--"I can't be a one-brand guy," he admits--but in deference to his position, he won't reveal what they are.

Diamonds in the Rough

Why has guitar collecting become such a popular pursuit for these and so many other chief executives? Most just love the instrument, for the way it looks, sounds and feels. Many also love it for what it represents: their youth. "There's a little bit of the outlaw in the electric guitar," marketer Simons says. "What's more, CEOs are the business world's version of rock stars, and a climate-controlled closet humidor full of vintage instruments is a link back to a time when they were able to practice the occasional bad behaviors without repercussions. Those guitars are reminders of when the good times really rolled."

Of course, there are other, perhaps more shrewd, reasons. "Look at a guitar that sells for $12,000," says Gibson's Juszkiewicz, "then look at a diamond that sells for the same amount of money. It's this little stone. There's no craftsmanship, there's no history, and it does nothing. There are a lot of diamonds being sold out there, and yet I would posit that the guitar is of more legitimate value. The reality is that in our marketplace, the investment quality of instruments is pretty phenomenal."

He's not joking. In the last few years, the prices of vintage guitars have skyrocketed. The most extreme case is that of the Gibson Cherry Sunburst Les Paul. Approximately 1,700 of these guitars were made between 1958 and 1960 before the line was discontinued due to lack of popularity. Their original list price was under $300; as recently as five years ago, you could find one for $45,000. Today, they're selling for $250,000. And Stan Jay, president of leading vintage guitar dealer Mandolin Brothers in Staten Island, N.Y., wagers that a mint-condition "Burst" could fetch $300,000 before this year is over.

Other high-ticket items are Martin acoustic guitars made before World War II and so-called "pre-CBS" Fender electric guitars, made before CBS bought the company in 1965. "The rate of appreciation for those models in the last year has been the fastest I've ever seen." says George Gruhn, owner of Gruhn Guitars in Nashville, author of Gruhn's Guide to Vintage Guitars, and generally acknowledged as one of the world's foremost guitar authorities. "Some of them have jumped as much as 75 percent." And though Gruhn is as shocked as anyone by these price hikes, he doubts that the bubble will burst in any lasting way: "I haven't seen any guitars drop in value and never get back, and I've been doing this for 42 years."


If you don't quite have the bucks for a vintage Martin, Gibson or Fender but still would like to get into guitars as an investment, rest assured that there are many other options. Both Jay and Gruhn note that the market for archtop semi-acoustic guitars, principally used by jazz players, is significantly undervalued at the moment: D'Angelico, D'Aquisto and Stromberg are the most highly respected brands in this area.

And if you just want a good instrument to play, a new Fender, made in Mexico, will only set you back $500. Whether its value will rise over time to the preposterous degree of its predecessors is another question.

"It basically comes down to the same thing as buying any kind of collectible, whether it be vintage automobiles or stamps or coins," says Gruhn. "You study the field and you talk to folks in the industry. There are well-known reliable dealers, and if they give you a written guarantee of authenticity, you should expect that it is what they claim. If you buy off eBay, you're asking to get screwed, and you deserve it, too."

One further word of warning: Once you've got the guitar-collecting bug, you may find it difficult to let go. "Every instrument you have becomes physically part of you, even if it's bad," says Juszkiewicz. "There's a very personal connection there. I have a couple of really bad guitars, but I've never sold any of them. I just can't bring myself to do it." Neither can lots of other people.

That's why you don't hear much about Guitar Deacquisition Syndrome.

RELATED ARTICLE: Top Five Collectibles

Stan Jay, president of Mandolin Brothers, Staten Island, N.Y., says hardcore collectors would sell their soul to possess one of these:

'58 to '60 Les Paul Standard "Burst"

The ultimate iconic guitar is fairly rare (Gibson shipped 1,700 in three years). Prices vary with how much "flame" grain is in the two-piece maple top. Value depends on color integrity and if the cherry stain remains bright. Originality, year, condition, degree, depth and dimensionality of flame, degree of fading, and presence of the original case are key, too. A mint condition '59 can touch $300,000.

CF Martin prewar Model D-45

With a full dreadnought body, abalone border inlays (top, back, sides, neck and tail pin), large hexagonal fingerboard inlays and a vertical abalone logo in the head-stock, this six-string rhythm guitar is considered the diamond jewel of the American vintage fretted instrument industry. Gene Autry had the first, and country stars have yearned for one ever since, but at $175,000, they'll keep yearning.

Gibson 1922-'24 F-5 Mandolin

Lloyd Loar, Gibson's first and only "acoustic engineer," was the Stradivarius of the mandolin, guitar, mandola and mando-cello. Without his innovations, the electric archtop made famous by Charlie Christian or the electric solid body wouldn't have existed, meaning there'd be no Rolling Stones or Beatles. Loar supervised production and signed labels of "good" instruments--good F-5s go for $135,000-$175,000.

Gibson late '50s Flying V and Explorer

Made from the lightweight, honey-colored wood called korina, the Flying V's body had a long, inverted V-shape with a pointy peghead, while the Explorer boasted an offset X-shape; either one fetches $125,000 today. Gibson filed a third patent for the Moderne--with a small body resembling a hatchet blade--but none are known to exist. (Find one and you'll net $1 million.)

James D'Aquisto Archtop

After apprenticing under John D'Angelico (the finest independent guitar builder of the first 60 years of the 20th century) for 13 years, D'Aquisto built about 370 jazz guitars under his own name before dying in 1995. His guitars had a futuristic appearance and delivered the tone, volume and projection that jazz soloists demand. His Soloist, Avant Garde and Centura are visionary instruments costing upward of $125,000.
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Title Annotation:EXECUTIVE LIFE
Author:Randall, Mac
Publication:Chief Executive (U.S.)
Geographic Code:1USA
Date:Nov 1, 2005
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