Tradio: How to Educate Yourself about Collecting 

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[audio:http://westchestergold.com/MP3/Tradio-08-17-12.mp3|titles=How to Educate Yourself about Collecting  ]

Steve:
So we were chatting and the topic came up well, how do you know what you buy? How do you know about all the stuff that you deal in? We started chatting about that I get a lot of periodicals and I do a lot of reading. Before the advent of the Internet, it was a matter of going around the country to different shops, seeing things, touching things, going to a lot of different auctions. I used to fly, basically, around the country to a lot of different auctions in New York and Cincinnati and some different areas depending on what the particular items were.

I’ve always professed to people knowledge is the best thing you could possibly have, that it’s the most important thing you can have. You can read all the books you want and look at pictures of items and that’s going to help you quite a bit. I mean it helps you recognize period furniture, types of glassware and things, but the best thing is touching it and feeling it and really examining a piece up close.

I’ve been fortunate that I’ve got a lot of friends who deal in a lot of different items. If they get something unusual or really cool a lot of times they’ll call me and say hey, Steve, I just bought such and such. This is really cool. I’ll go send me pictures of it would you? I’d like to see it. There are certain characteristics that you need to know on a particular item. A lot of times on a sword or a knife the maker, the design of the piece, a certain maker’s design, where they had little types of characters as far as engraving that they would do on a blade. When you can see things like that it really helps a lot but, again, handling the item is probably the most important.

When I was in South Carolina my manager called me from the shop and she said I’ve got a lady here and she’s had an offer on her gold items and it just seems like it’s a really, really high offer. I can’t seem to understand why somebody would pay more than what the gold is possibly worth. Sometimes you have people who believe that gold is going to continue to go back through the roof again so maybe they want to acquire it, but I’m going to say most dealers can’t really afford to pay more than what the gold is worth.

Kenny:
What’s it down to now?

Steve:
It’s at $1,615. So it’s pretty high again. It was down in the low $1,500s. Now, a lot of times if a piece of jewelry comes in that we feel we can resell yeah, we’ll pay a premium over the gold price, but you’re talking about high school rings and broken jewelry. You don’t have to be a rocket scientist, there’s no premium on the stuff because it’s not going to be resalable.

I said to my manger ask her if she has anything else with her. So she said oh, yeah, I’ve got a sword that was included in this price. I said well, perhaps the sword is the key to this whole thing. Tell her to bring the sword in. So she brought the sword in and it appeared to be a Civil War cavalry saber with the scabbard in really good condition. No date on it, but that wasn’t unusual. Lots of times swords from the Civil War period weren’t dated depending on who the maker was. Ames was one of the larger companies and sometimes they would date it, sometimes they wouldn’t date it.

It had a maker mark on the blade that I really wasn’t familiar with so I said send me some pictures of the sword. We looked at it and at one time the sword was probably a $700 or $800 sword. The way the market is now if you go to the military shows you’ll find just tables basically full of this type of sword and they’re selling them for somewhere between $450 to $500.

I said okay. The offer that she had on this sword was only $200 so, yeah, you could pay more for the gold and make nothing on that because you were going to make some money on this sword when you bought it and sold it. So now everything came into place and made a lot of sense. I said we can certainly beat that offer by at least another $100 because then we can turn around and make $100 on the sword, so we bought the whole deal. When I came back from Lyman, Civil War stuff and military stuff are pretty strong up there. We’ve already got collectors coming in and asking for that type of thing, so I said okay. Anything we buy we have to hold for 30 days, so we’ll hold this for 30 days, send it back up to Lyman, put it in the shop and we’ll sell it.

Well, when I got back I ran in my office to look and see what we had bought. I looked at this thing, looked at it again and started looking at it kind of close. The pictures that my manager had sent me were of all the particular items, all the distinct markings on this thing that I had asked her for, but when we started to really examine it firsthand we noticed that there really wasn’t a lot of wear on the handle of this sword. You have to realize, this sword had to be from the early 1860s or mid 1860s. It was certainly handled. It was certainly held in someone’s hand and we did what we call the sniff test.

I’ve talked about this before on Tradio and, it’s funny, a lot of people have remembered the sniff test and how it works. When you look at a handle on a sword or a knife or something that has age on it, generally the handles were bound in leather and then they had brass wire that would loop around the handle and hold the leather in place. When I looked at the leather handle there was basically no wear on the handle. There was no sweat marks on the handle.

When we did the sniff test, which means you hold it up to your nose and give it the old sniff-a-roonie and there was no smell whatsoever to the leather. You could smell the brass wire, but there was no smell to the leather. Okay, taking this into consideration and looking at the handgrip and the guard on it and seeing there were some little dings on it, but not the kind of problems that you would normally encounter in a sword handle. There’s going to be dings. It was thrown around. You know a guy took it off his belt and laid it down. There’s going to be a certain amount of wear and tear, dings and little dents and stuff in it. The scabbard was in pretty good condition and usually, again, if this was a cavalry saber it’s banging up against your saddle when you’re riding. So, generally, a scabbard is going to have some kind of dings in it, which is acceptable to a collector because they want to see it and it sort of makes it a little more authentic.

When we put all these different things together in my mind it’s not going to be a genuine sword. It’s a reproduction that someone has faked over the years and there’s a lot of that stuff out there because when you can build a sword for $10 or $15 and sell it for $300, $400 and $500 it’s certainly worthwhile to do it. It’s like I’ve told people before, if you’re going to get involved in collectables try and learn as much as you possibly can.

If you know you’re going to buy an object and you’re not quite sure of what it is you take what we call a shot at it. I’m going to give it a shot. I think I could buy this and turn around and sell it and make money. If it’s not going to affect your lifestyle if you make a mistake it’s a very good learning experience. I’ve got a lot of learning experiences in my life. I’ve got a warehouse that’s got quite a few different learning experiences lying around in it.

I turned around and said to my manger this is a reproduction and she was just horrified that I was going to be so mad at her because she had bought a reproduction sword. I said it’s not your fault. You took pictures of it. You showed me everything that I asked you. Perhaps I probably should have said did you do a sniff test on this, but it didn’t really occur to me because the pictures of the handle looked like it had wear and tear on it. Everything looked like it should but, again, the maker mark was one that was made up. There was no maker with those initials.

Once I got home and started going through some of my references on it I found that this was a made up maker and some of the other marks on the sword were not genuine as well. So what we bought was a nice old wall hanger and it’s probably a 40 or 50-year-old sword, but certainly not a Civil War piece. The amusing thing, I guess, is the fact that there was another dealer there who thought he was basically stealing this sword. He was going to pay too much for the gold and make up all his money on the sword. Yet, we looked at it and said okay. We could buy this sword and still make $100 on the deal which would take us out of the gold and make us $100 on the sword and move on to the next deal.

Where, in fact, it was a mess up and so we’ll lose money on that one. Is it going to affect us after being here for 37 years? I don’t think the one bad deal like this is going to hurt us. We took the shot on it, but I like to tell people there are certain things you want to look at, whether it be furniture, whether it be swords, whether it be different types of metals, whether it’s gold or silver. There are all kinds of things that you want to try and learn to look at when you’re out there spending your hard money to buy it.

Now, I looked around after this and I thought you know this is something I can talk about on Tradio because a lot of people say that Steve Duke seems like he’s a pretty smart guy. Well, he makes mistakes too, whether it’s me or it’s my help that I haven’t taught quite enough to. I’ve tried over the years to explain to the people out there what they need to look for to prevent losing money when they go into this type of business. I’ve had a lot of people lately come in that have been buying storage sheds. They see it on TV and man all these guys on TV make a lot of money. They’re stars because they do this. Let me tell you, after you’ve bought a storage shed there’s a lot of work involved in that. You have to pull everything out. You have to sort it and go through it. Now after you’ve done all of that you still have to get rid of that stuff.

I don’t care what you see on television. When they pull out these 30-year-old Toshiba and Mamiya cameras and they go this is a quick hundred dollar bill, it’s not a quick hundred dollar bill. It’s an old camera. That’s for the television and you’re not going to be out there selling that for a hundred bucks. When you get on eBay and you can look at them for $15 and $20 and they’re still not selling, why is you’re going to be worth a hundred bucks? You’re not a TV star.

Now, granted, in every type of collectable and every type of camera and things like that there’s always that one exception. There’s always that one that happens to be pretty rare. It could be typewriters. There are a lot of old typewriters out there. There are five or six of them out there that are rare. They look like a regular typewriter, but the particular model happens to be collectable.

Sewing machines, there are a lot of really cool looking old sewing machines. There are people that collect sewing machines. Are they worth a lot of money? Not really. I mean the big old treadle-type sewing machines; basically what happens with those is people usually will junk the sewing machine, put a piece of marble on top of the treadle and they’ve turned it into a really cool looking table. So, yeah, that’s got some value to it, but you have to know what you’re buying.

Every year at around Christmastime somebody will come walking in my shop with a handful of gold chains. They’re holding all this stuff and before they even get in the door I’ll look at it and say to them those aren’t real. Well, what do you mean? They’re not real. Now they look at me like I’m crazy. They come walking into the shop, they put it on the counter and they go now why would you say that? I said because you bought those from some guy whose car is broken down over in the public shopping center. He needed money and since you were just a really nice person he sold you $1,000 worth of chains for $300 bucks. Well, no, I paid $400. Okay.

What I’ll do is we’ll get out the file and we’ll get out the acid. We’ll file through the gold plating, put some acid on it and they’ll turn green. A lot of times you don’t even have to file it. A lot of the really cheaper fake gold chains have a very thin layer of gold plating on them or they’re just brass that are polished up really nice. You put acid on it and it turns green.

How can you prevent yourself from getting duped on a deal like this? First of all, always remember that there’s nobody out there selling dollar bills for a quarter. Yeah, you’re the nicest person in the world and I know there’s a store across the street that buys gold. They’d probably only give me $1,000 for these chains, but I’m going to sell them to you for $400. Now, if that makes sense to you then you’re just going to get stiffed all through life. You’re just going to have to learn these important lessons. It’s just going to happen to you, but if you sit back and realistically think about what somebody is offering you, okay, then there’s got to be a problem.

Now, you can do the sniff test on gold chains. Are they going to smell sweaty? No, they’re not going to smell sweaty, but if you take those gold chains and rub it between your palms pretty hard and you start to generate a little bit of heat and you sniff your hands and it starts to smell like metal, like funky metal, that’s going to tell you that those are not gold chains. Gold does not have a smell to it. You rub gold between your hands and you’re really not going to get that metallic smell to it. You may get the smell of cologne because somebody was wearing the chain and they had cologne on when they wore it, but you won’t get that real stinky metal smell. So save yourself a bunch of money and don’t get involved in it. Do the sniff test.

I’ve had people come to me hundreds of times over the past 20 some years that we’ve done Tradio and say you know what? Man, I did that sniff test and I bought a gold chain from some people who needed money and I’m wearing it now. I had a jeweler look at it and tell me it was gold. I said okay. Well, then you did good. Don’t feel like the lone ranger. We’ve got gold chains laying around the shop in piles that different employees of mine have bought over the years. They didn’t test it right. They didn’t do a good test on it.

Although, it’s funny, a lot of the new stuff that comes out now if you put acid on it a lot of times it won’t be affected at all. When my employees show me a chain that they bought and I say well, did you test it? They say yeah. They put acid on it and I go and I put acid on it and I go well, I can’t be mad at you because it’s holding up with the acid. Now the other thing is you go get a magnet and you touch that magnet to the chain. A lot of times it won’t stick right to the magnet, but if you lay it on a piece of paper and you hold the magnet close to the chain you’ll see it start to move a little bit, just a slight magnetic attraction to the chain. This tells you that it’s not gold.

Don’t let anybody tell you that it’s gold. If it’s attracted to a magnet it’s not going to be gold, whether it be silver color, a white-gold color or a yellow-gold color. The fairest metals are not attracted to magnets, so gold and silver will not stick to a magnet. Again, it doesn’t even necessarily have to stick to it. It won’t be affected by the magnet whatsoever. So this is another way to keep yourself from buying some kind of fake stuff.

We buy a lot of antique wristwatches. We buy a lot of vintage stuff and there are a lot of very rare watches out there. I mean there are watches that are worth $100. There are watches that are worth $10 and $15,000. Are you going to find them at garage sales? Yeah, believe it or not they’re still out there. There are lots of people who don’t know any better. They’ve inherited all kinds of stuff and they throw it out there in garage sales.

I had a dealer in my shop yesterday from Germany. This fellow traveled all over the world buying antique pocket watches and wristwatches. Very, very knowledgeable gentleman, probably one of the sharpest guys I’ve ever met as far as when it comes to certain models of wristwatches. He told me the story of how he had bought a hundred pounds of wristwatch movements. Why would he be buying wristwatch movements? Well, number one, he repairs watches. Number two, with the high gold prices lots of times some of these really rare watches were scrapped. They were ripped apart, the movement was thrown into a little box and the gold case was sold for the scrap value.

Now, there are a lot of dealers like I said who’ve opened up stores who have no knowledge whatsoever. They could have been selling shoes last week and now they’ve opened up a gold store and they’ve got some pretty girl out there with a sign that she’s waving back and forth, which is really professional out there on the road. You happen to say this guy must be professional because he’s got some girl waving a flag in a bikini so I’m going to go sell him my gold rather than someone who’s been in a town for 40 years. You’ve gone in there and sold him a really, really rare watch and he gave you $50 or $100 for the gold case. He turned around and scrapped it.

Well, this gentleman had bought a watch movement, looked at it and he knew it was pretty good and he put it on the Internet. A dealer from New York called him up and said how much do you want for this watch movement? He said a hundred Euros, which is about $125. He paid very little for this movement because he bought 100 pounds of them, but he knew it was somewhat rare and he was going to sell it for $125. The dealer said okay, I’m going to wire you $125 plus the postage and shipping. I want that watch movement and the gentleman sold it to him.

Two weeks later he started getting all kinds of emails from France and Germany about this watch movement. Do you still have this movement? We’d be interested in buying it. He said no, the watch is already gone. They said well, could you tell us who it was sold to? He said I’ll talk to the gentleman and ask if he would mind if I gave you his phone number. While he was talking to one of these dealers, the dealer started to explain that there were only 100 of these movements made by this particular watch company and they were made to be put in a watch made by Patek Philippe, which is a Swiss watch company who handles extremely high-grade watches, high-profile watches; expensive watches.

What is a Patek worth? It could be $1,500 for a little nothing watch. It could be a $100,000 watch, depending on the type of movement. They said do you have any idea what that movement is worth? He said no, not really. I sold it for $125, I’m very happy. They said the last one was sold ten years ago in the watch case, which made a huge difference, but in the watch case that watch sold for $80,000. Now, the movement, because he didn’t have the case, certainly wasn’t worth $80,000 anymore, but it was worth somewhere around $20 to $30,000.

Kenny:
Cool.

Steve:
So do people make mistakes in this business? Of course we do. We’re human. You’re going to make mistakes. You’re not going to get the top dollar all the time. As a matter of fact, lots of watches that I sold this gentleman yesterday were pieces that I paid $1,000 or $2,000 for and I happily made myself $100 to $200 on each of those watches. He’ll turn around and put them in his inventory and he’ll probably make himself $500 or $600 when he eventually sells them. That’s what business is about.

Sam’s doesn’t buy all that merchandize to breakeven on it. You’re going in there and yeah, you’re getting a good deal on it, but they’re making money on it. That’s what the secondhand business is about or any kind of business, but there are all kinds of ways to try and prevent yourself from making mistakes. There are all kinds of books. There are all kinds of people that you can talk to. Believe it or not, we’ve got a website and on our website we’ve got some of the older Tradio shows that have been recorded that will give you a little bit of information. We’d love to have you look on our website. Go in there and read or listen. I think we’re starting to put them in Kindle books even.

If we can help you, we’re more than happy to take a look at the items you’ve bought. If you want to sell them again, we’re always happy to give you a price on them. This is what we do for a living. If you have any old or antique wristwatches, I would love to buy them. A lot of that stuff I collect for myself, the pocket watches and wristwatches. If you’ve inherited stuff or you’ve bought a storage unit and you’ve got stuff like that lying around in it, stop by Westchester Gold & Diamonds. We’re in the BAERS Plaza behind ABC Liquors.

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