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#2155197 - 09/21/13 07:10 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Withindale Offline
1000 Post Club Member

Registered: 02/09/11
Posts: 1958
Loc: Suffolk, England
He told them it was because he wanted a Steinway B with a factory fitted player.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2155321 - 09/22/13 12:56 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
phacke Offline

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 549
Loc: CO, USA
Originally Posted By: Minnesota Marty
Steve,

However, I don't equate it to the 'brand' that is Steinway. It is beautiful architecture, but I don't believe that sales will suffer because of a change in location or interior décor. We have no idea of how the new location will look. A surprise awaits us all.

If it becomes a new 'icon,' it may become an image for Steinway in the 21st. century, rather than harkening back to the 19th.


I sort of agree with Mr Marty here. There is clearly a huge loss but there is a lot of potential for net gain. The 57th st area where the Hall is now seems to be going residential. They would get a lot more exposure, say, on 5th avenue between the Plaza Hotel and Rockefeller Center, which is on the regular domestic and foreign tourist path. Also, best practices in retailing, including store layout concepts, have come a long way since the 57st Steinway Hall was designed. Steinway Hall NY is beautiful, but it can be taken to a better situation and place. Any number of possibilities exist, high quality listening room, etc.

best wishes-
_________________________
phacke

Steinway YM (1933)
...Working on:
G. F. Händel: Suite in G minor (HWV 452)
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin

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#2155343 - 09/22/13 03:05 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dara Online   blank
1000 Post Club Member

Registered: 06/18/09
Posts: 1035
Loc: west coast island, canada
Best wishes to Steinway Piano and crew.
John is just a beginner in his new position so perhaps allowed some slack for his statement in the above video:

" In my viewpoint, I , you, can't have to many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

Haha, who do you think you're talking to John !
Ya sure.... not much of an expense and a great investment. Is that why you bought all of them all at once?
haha

Very smooth , slick presentation overall ... to be expected from Steinway, and whoever turned out to be the new owner.

Best wishes to Steinway in your production of wonderful instruments and further innovations in instrument creation.

Your manipulative control of piano placement in performance halls , world stages and schools...
and overall indoctrination of Steinway's excellent superiority complex,
detracts from, rather than adds to perceived value , in my opinion.

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#2155369 - 09/22/13 04:58 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Derek Hartwell Offline
Full Member

Registered: 07/03/09
Posts: 219
Loc: United Kingdom

All sounds very altruistic ! Very good for Steinway and all Steinway enthusiasts, but IF I could afford a Steinway or another piano equally expensive I'm not at all certain that Steinway would be my choice. The standard Steinway sound is not my favourite piano sound.
Nevertheless, I wish Steinway and its new owner well in the future! smile
rk
_________________________
Music Teacher (Piano/Theory/Musicianship)

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#2155378 - 09/22/13 05:19 AM Re: New Owner of Steinway, John Paulson [Re: Dara]
Michael Sayers Online   content
1000 Post Club Member

Registered: 02/15/13
Posts: 1160
Loc: Stockholms län, Sverige
Originally Posted By: Dara
Paulson:

" In my viewpoint, I , you, can't have too many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

I found these lines from the video to be problematic. For him to suggest that the supply of Steinway pianos will always be pressured by demand, with the result of ever increasing marginal value for each Steinway piano in the world for the future (or at least during the rest of our lives), seems to assume a lot.


M.

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#2155382 - 09/22/13 05:35 AM Re: New Owner of Steinway, John Paulson [Re: Michael Sayers]
Withindale Offline
1000 Post Club Member

Registered: 02/09/11
Posts: 1958
Loc: Suffolk, England
Originally Posted By: Michael Sayers
Originally Posted By: Dara
Paulson:

" In my viewpoint, I , you, can't have too many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

I found these lines from the video to be problematic. For him to suggest that the supply of Steinway pianos will always be pressured by demand, with the result of ever increasing marginal value for each Steinway piano in the world for the future (or at least during the rest of our lives), seems to assume a lot.

That is a brilliant point.

Remember though that he is arguing for Steinway owners to hang on to their pianos (because of their increasing value as an investment) so that the number of used pianos coming on to the market will be severely reduced. They will become gold dust and new ones will become increasingly attractive as an investment. Add in the plan to increase global demand (through geographical coverage, enhanced product quality, and model/market strategy) and you have the stuff of Masters Dissertations if not PhD Theses.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2155398 - 09/22/13 06:37 AM Re: New Owner of Steinway, John Paulson [Re: Derek Hartwell]
Michael Sayers Online   content
1000 Post Club Member

Registered: 02/15/13
Posts: 1160
Loc: Stockholms län, Sverige
Originally Posted By: Derek Hartwell

All sounds very altruistic ! Very good for Steinway and all Steinway enthusiasts, but IF I could afford a Steinway or another piano equally expensive I'm not at all certain that Steinway would be my choice. The standard Steinway sound is not my favourite piano sound.
Nevertheless, I wish Steinway and its new owner well in the future! smile
rk

The tone quality of some pianos, however high, can stand in the way of making a really personal and unique statement vs. the very clear and open tone of the earlier Steinways.

For comparison, Schnabel's recording of the Beethoven sonatas on one of those older and very spiritual sounding Bechsteins is very spiritual sounding. But Hofmann's Casimir Hall performance of Beethoven's Waldstein sonata on an older Steinway is both very spiritual and has the ultimate dark and profound power when needed - I am not sure the latter could have been made to emerge untrammeled through the Bechstein Schnabel used to record Beethoven's sonatas.


M.

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#2155429 - 09/22/13 08:54 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Rickster Online   content


Registered: 03/25/06
Posts: 8569
Loc: Georgia, USA
Well, all I can say about this is that John Paulson’s dad couldn’t afford a new Steinway and I can’t either.

However, I have had my eye out for a good used one somewhere around $8K. smile

Rick
_________________________
Piano enthusiast and amateur musician: "Treat others the way you would like to be treated". Yamaha C7. YouTube Channel

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#2155439 - 09/22/13 09:25 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Dave B Offline
1000 Post Club Member

Registered: 08/01/11
Posts: 1973
Loc: Philadelphia area
I watched the video for the second time and still can't get past the sister crying.

I'm still waiting for that dark green Alpha Romeo Spider. I'll even be nice to my brother.



Edited by Dave B (09/22/13 09:42 AM)

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#2155448 - 09/22/13 09:48 AM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
Steve Cohen Offline
Yikes! 10000 Post Club Member

Registered: 05/26/01
Posts: 10490
Loc: Maryland/DC/No. VA
Originally Posted By: Minnesota Marty
Originally Posted By: Steve Cohen
First, Steinway Hall is a strong contributing factor in Steinway's sales in NY.

What is the percentage of pianos sold at Steinway Hall NY in comparison to total sales world wide?

I believe that the image and aura of the 'mother church' in NY is not a significant sales influence to the majority of Steinway buyers. How about the "Halls" in Hamburg or London? Do Americans, or others on this side of the pond, hold them in the same awe as the NY version?


I was a marketing consultant to Bechstein-America during the years that they operated on Piano Row. My services began a few months after the decision to open on Piano Row was made, and I remained involved for a little over two years. during that time I spent a great deal of my time with the sales force.

While I would agree that the impact of Steinway Hall as a facility was not THE deciding factor in Steinway sales there, it was, and continues to be a strong contributing factor. It "fit" as being a place where one could buy a unique piece of historic Americana, and it made competing with them all the more challenging.

On the other hand Marty rightly points out:

However, I don't equate it to the 'brand' that is Steinway. It is beautiful architecture, but I don't believe that sales will suffer because of a change in location or interior décor. We have no idea of how the new location will look. A surprise awaits us all.


Will they relocate to a different, but equally influential location? It certainly is possible, and I am sure that is their intent, but it will be very difficult to beat the impact of Steinway Hall.
_________________________
Piano Industry Consultant- http://www.linkedin.com/pub/steve-cohen/6/b92/b80

Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

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Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2155482 - 09/22/13 11:09 AM Re: New Owner of Steinway, John Paulson [Re: Michael Sayers]
Furtwangler Offline
1000 Post Club Member

Registered: 02/22/07
Posts: 1536
Loc: Danville, California
Originally Posted By: Michael Sayers
Originally Posted By: Dara
Paulson:

" In my viewpoint, I , you, can't have too many Steinways. Ah, ya know, I don't view it as an expense. I view it as an investment, cause over time Steinways will increase in value."

I found these lines from the video to be problematic. For him to suggest that the supply of Steinway pianos will always be pressured by demand, with the result of ever increasing marginal value for each Steinway piano in the world for the future (or at least during the rest of our lives), seems to assume a lot.


M.






Michael

Some people on this forum would buy the Brooklyn Bridge.

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#2155654 - 09/22/13 05:23 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
SBP Offline
Full Member

Registered: 09/12/12
Posts: 258
Hey man, that's some prime real estate there!

On the topic of Steinways gaining value and beating out inflation, I don't think I've seen many used Steinways sell for more than their original price. Near new (in the last 5 years) and/or freshly rebuilt ones do tend to sell in the $40-60K range, but that's still not above the price that their original owner paid for them. That's still quite close to their original price, but not above it. So they do hold their value better than say, a Kawai or Samick of comparable size/price. Now, I'm not really an expert on used Steinways, nor do I have my dad's financial smarts, but that doesn't look like an increase in value to me smirk I'm probably wrong about that, though
_________________________
2012 Kawai K3

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#2155664 - 09/22/13 05:41 PM Re: New Owner of Steinway, John Paulson [Re: Minnesota Marty]
michaelha Offline
500 Post Club Member

Registered: 06/05/13
Posts: 873
Originally Posted By: Minnesota Marty

How could anyone possibly know the reasoning of Samick or Kohler?


Nobody "knows with 100% certainty" but there's a ton of historical data for similar transactions.
_________________________
Casio CDP-100
2012 Kawai RX-5 BLAK

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#2155684 - 09/22/13 06:10 PM Re: New Owner of Steinway, John Paulson [Re: SBP]
pianoloverus Online   content
Yikes! 10000 Post Club Member

Registered: 05/29/01
Posts: 19472
Loc: New York City
Originally Posted By: SBP
Hey man, that's some prime real estate there!

On the topic of Steinways gaining value and beating out inflation, I don't think I've seen many used Steinways sell for more than their original price. Near new (in the last 5 years) and/or freshly rebuilt ones do tend to sell in the $40-60K range, but that's still not above the price that their original owner paid for them. That's still quite close to their original price, but not above it. So they do hold their value better than say, a Kawai or Samick of comparable size/price. Now, I'm not really an expert on used Steinways, nor do I have my dad's financial smarts, but that doesn't look like an increase in value to me smirk I'm probably wrong about that, though
To the best of my knowledge all pianos, including Steinways, take the biggest hit in the first few years and usually sell for a loss compared to their original price during that period. In addition, the depreciation schedule in Fine's Piano Buyer shows that the depreciation for Steinway is only marginally less than other makes. If I remember correctly, this was also examined in detail in the Dummies(or Complete Idiots Guide) book on buying a piano where the author(a forum member)says that the depreciation for pianos is generally the same regardless of their make.

I think there is a sweet spot for selling pianos where many of them(and probably Steinway in particular because of their rapid price increases)can be sold for about what they originally cost. I'm guessing this might be after around 10-15 years, but some dealers might have a better estimate.

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#2155782 - 09/22/13 09:26 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
Yikes! 10000 Post Club Member

Registered: 04/12/05
Posts: 10385
Loc: Williamsburg, VA
Most top pianos will sell for more than their nominal purchase price if you wait a while. How many will add 3-5% per year to their value beyond the inflation rate? Well, none. Pianos are a crappy financial investment. That's not their purpose.
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Grotrian 192 #156455

https://www.youtube.com/user/dhfeld/videos

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#2155850 - 09/22/13 11:14 PM Re: New Owner of Steinway, John Paulson [Re: Bob]
Ed McMorrow, RPT Offline
2000 Post Club Member

Registered: 12/09/12
Posts: 2194
Loc: Seattle, WA USA
Bob,
The action fitting procedure is designed to allow for about 2mm difference in string height from one piano to another. That is one of the reasons why the action mounting blocks are tapered and made over-long. So the action frame height can be fit to the string height. Of course for many years the NY Steinways ranged over about 4mm. But string height has always varied in Steinway pianos. And all factory fit actions over-center a little in the tenor and bass.

The last set of NY whippens, (repetitions they call them in NY), was a model of uniformity, every bit as good as the Renner part and maybe a little lighter. They also cost a lot.

If NY abandons the long standard voice up protocol-technicians can count on making more money 10 to 30 years from purchase-in hammer replacement. The voice-down hammers wear out faster.

Sorry to chase the OP OT.
_________________________
In a seemingly infinite universe-infinite human creativity is-seemingly possible

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#2155871 - 09/23/13 12:08 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
phacke Offline

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 549
Loc: CO, USA
Originally Posted By: Piano*Dad
Most top pianos will sell for more than their nominal purchase price if you wait a while. How many will add 3-5% per year to their value beyond the inflation rate? Well, none. Pianos are a crappy financial investment. That's not their purpose.


Hello Piano*dad,

An alternative view. You are the economics dept chairperson, but I don't see it quite so badly if you actually "invested" in (not played and used) an S&S many years ago. Feel free to poke holes in the thinking:

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$1786 = 8 MINUS taxes when DJI components change
Ref:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

Edit, inappropriate reference data

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, > 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer

It is assumed that the old S&S is stored optimally, analogous to fine Burgundy, oil painting, etc., and professionally resold. Maybe a New Mexico basement at altitude? cool and relatively dry...
Yes there will be a dealer commission bring the investment to market. But you get better selected sound board materials in the old piano as availability of good materials continues to lessen. S&S at the NY Hall was selling an old A for way above the price of a new one, and people on this forum have written it sounds better than the new stuff. I played it to and tend to agree, but I am not that much of a connoisseur.


Best wishes-


Edited by phacke (09/23/13 03:47 AM)
_________________________
phacke

Steinway YM (1933)
...Working on:
G. F. Händel: Suite in G minor (HWV 452)
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin

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#2155888 - 09/23/13 12:30 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
peekay Offline
Full Member

Registered: 08/31/13
Posts: 184
Your DJIA numbers are already inflation-adjusted. So it's beyond keeping up with inflation.

Your S&S numbers are not inflation-adjusted. You also don't take into account to cost of storage and maintenance over 100 years.

Seems like a flawed comparison.

_________________________
Working on RCM Grade 8

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#2155912 - 09/23/13 01:27 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
phacke Offline

Gold Supporter until November 11 2014


Registered: 10/18/12
Posts: 549
Loc: CO, USA
Good catch, Mr. peekay. Indeed the DJIA numbers seemed too bad. Here is the comparison again then. Stocks look better. I think storage costs could be made negligible with some knowledge however. The 100 y was just to get the long term trend line, the returns could be better or worst for more realistic shorter periods.

Best wishes-

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$79.51 = 188.7 MINUS taxes when DJI components change
Ref:
http://www.scaruffi.com/politics/dow.html

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer


Edited by phacke (09/23/13 03:50 AM)
_________________________
phacke

Steinway YM (1933)
...Working on:
G. F. Händel: Suite in G minor (HWV 452)
J. S. Bach, Sonata No. 1 in B minor (BWV 1014) duet with violin

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#2156507 - 09/23/13 10:28 PM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bob Offline
3000 Post Club Member

Registered: 06/01/01
Posts: 3876
smile
_________________________
www.PianoTunerOrlando.com






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#2156603 - 09/24/13 01:56 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Bellay Offline
Junior Member

Registered: 09/23/13
Posts: 1
Loc: Banned
Hello everyone!I am very nice to see you all.And hope you have a good time.

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#2156668 - 09/24/13 06:29 AM Re: New Owner of Steinway, John Paulson [Re: phacke]
Rich Galassini Offline
9000 Post Club Member

Registered: 05/28/01
Posts: 9296
Loc: Philadelphia/South Jersey
Originally Posted By: phacke
Feel free to poke holes in the thinking:

100 y span taken to round-out short term macro factors:
Inflation , y2013/y1913 = $23.62/$1 =23.6
Ref:
http://www.usinflationcalculator.com/

Dow Jones Industrial y2013/y1913= $15000/$1786 = 8 MINUS taxes when DJI components change
Ref:
http://www.macrotrends.net/1319/dow-jones-100-year-historical-chart

Edit, inappropriate reference data

Steinway dealer Steinway M mahogany list price y2013/y1913 $69900/$930 = 75.2, > 3x inflation
Ref:
Mr Verhnjak old ads: http://www.pianoworld.com/forum/ubbthreads.php/topics/2113063/1.html
& Larry Fine's 2013 Piano Buyer

It is assumed that the old S&S is stored optimally, analogous to fine Burgundy, oil painting, etc., and professionally resold.


I love what you did here phacke. I wonder how other brands would fair that have been around for a century. Is Steinway unique in beating inflation in their retail selling prices or has it simply become more expensive to make a great piano?

How would Mason & Hamlin, Bechstein, Bosendorfer, and others fair in this same comparison? I don't have the answer - just asking the question.
_________________________
Rich Galassini
Cunningham Piano Co.
Phila, Pa.
Dir. Line (215) 991-0834
rich@cunninghampiano.com
www.cunninghampiano.com

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#2156702 - 09/24/13 08:42 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
Yikes! 10000 Post Club Member

Registered: 04/12/05
Posts: 10385
Loc: Williamsburg, VA
Ah, Phacke, my amusement for the morning!

Economists are often accused (and sometimes rightly so) of assuming their way out of problems.

zero storage costs? Hmmm. Space …. the final frontier. Climate controlled storage has a price in the market. One hundred years of it isn't free. Using your own space (if such a thing magically dropped in your lap) isn't free either … opportunity cost.

Oh, I think you would also have to pay for insurance. If you don't, you bear more risk. Fires burn down houses, even ones with Steinways in them. Risk is cost.

Hey Rich, don't pianos depreciate if they are stuck in a basement for 100 years …

[just got an image of the usual fright movie in which someone hears a noise in the basement, grabs a candle, and …. oh, the horror]

Speaking of more realistic comparisons, pianos are bought to be used. So, if you had dumped $930 into some package of assets that paid a 3.5% real return on average, that basket would be worth around $29,000 today (in 1913 dollars). What does the hulk of a 1913 sell for to a rebuilder today? Wild guess … under 15K in today's dollars.

That's not a good "financial" investment. But it might have been one heck of a purchase.

The ground is not covered in $20 bills for us to find with no effort. There is a reason for this. Even if the federal reserve periodically dropped money by helicopter all over the streets, it would tend to get picked up pretty quickly. Point: obvious profit opportunities don't tend to last. People pick up the bills. How many Steinways are sitting unused in perfect climate-controlled storage in order to beat the crap out of financial markets 30-40 … 100 years in the future. Not many, I'll warrant. No bills waiting to be picked up.

There have been times and places where people did use real goods in place of financial assets in order to store their wealth. Back in the 1970s in places like Brazil one could see lines of 30 VWs all in a neat row on large farms and estates. Financial markets were in a state of collapse because of hyper-inflationary policies pursued by populist governments. Wealthy people turned to a crappy second best way to keep some asset value. What they couldn't spirit out of the country or turn into gold they used to buy autos, which even if they depreciated in the climate, held their value better than cash which collapsed by the day.

I wouldn't be surprised if some people in those circumstances converted some of their wealth into unused Steinways!




_________________________
Grotrian 192 #156455

https://www.youtube.com/user/dhfeld/videos

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#2156722 - 09/24/13 09:11 AM Re: New Owner of Steinway, John Paulson [Re: Rich Galassini]
Derek Hartwell Offline
Full Member

Registered: 07/03/09
Posts: 219
Loc: United Kingdom
Originally Posted By: Rich Galassini
[/quote

How would Mason & Hamlin, Bechstein, Bosendorfer, and others fair in this same comparison?

It may or may not be relevant, but Bosendorfer are owned, I understand, by Yamaha.
Bosendorfer may change (or be changed) but Yamaha's(foreseeable)future seems assured with the company's going from strength to strength !
rk
_________________________
Music Teacher (Piano/Theory/Musicianship)

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#2156726 - 09/24/13 09:17 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Withindale Offline
1000 Post Club Member

Registered: 02/09/11
Posts: 1958
Loc: Suffolk, England
Originally Posted By: Piano*Dad
I wouldn't be surprised if some people in those circumstances converted some of their wealth into unused Steinways!


How would they have fared, I wonder?

Do you, does anybody, have any figures over the past, say, 125 years for the price of a Steinway D at actual and "present" values compared to commodoties such as a loaf of bread or whatever yardsticks are used for this sort of thing?

Please rephrase my question as appropriate to fit in with economics terminology!
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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#2156731 - 09/24/13 09:22 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Thrill Science Offline
500 Post Club Member

Registered: 09/04/11
Posts: 520
Loc: California
One of the secondary reasons I bought a new Bösendorfer over a new Steinway (the primary reason is that it sounds and performs better) is many of the outrageous statements Steinway and its dealers make.

For example:

http://www.steinwaypianos.com/kb/resources/investment

Quote:
The fact is, the appreciation of a Steinway is even more impressive when you look past the previous ten years - and take an historical look at appreciation over the past few decades. The numbers are nothing less than remarkable: Today, if the owner of a vintage Steinway grand decided to gauge the value of his or her piano on the open market, it is likely that the piano would command a price 4.3 times higher than the original retail cost. As the first chart shows, this figure is based on a representative sampling of Steinway grands of all ages - pianos which were created from before the turn of the century up through 1978.


Quote:

Furthermore, Steinway vertical pianos (uprights) command a handsome resale value as well - selling, on average, at a price 2.2 times higher than their original cost. Of course, as interesting as these figures are, there is one important point to keep in mind: When you own a Steinway, you possess a timeless creation that is passed on with pride as a beloved family heirloom. No matter how financially precious your Steinway becomes, you will find that it is a treasure with which you do not wish to part.


These statements are pure nonsense. A 50 year old piano of any make isn't worth much as a performance instrument without a minimum of $20,000 of work. (It may still make a nice piece of furniture to put your family picture frames on.)

Bösendorfer doesn't do any of this. Maybe its because people who have the cash to buy one know a thing or two about what an "investment" is.

I'm 50 years old now; if in 25 years, I'm still in need of a "performance instrument", I fully intend to ditch my then worn-out Bösendorfer and get a brand new, top of the line something else (or pay the $$$ to have it restored to new specifications).

This is not an "investment". It's like a car. They wear out. After a point, it's better to discard and replace. Steinway's Concert Bank pianos are pulled out of service after 8-10 years, and then buffed up and sold to people who just want a huge "Steinway" in their living room.


Edited by Thrill Science (09/24/13 09:40 AM)
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#2156744 - 09/24/13 09:57 AM Re: New Owner of Steinway, John Paulson [Re: S. Phillips]
Piano*Dad Offline
Yikes! 10000 Post Club Member

Registered: 04/12/05
Posts: 10385
Loc: Williamsburg, VA
Here's another way to look at the "piano as investment" nonsense.

Let's make the silly presumption that a piano didn't depreciate at all no matter what you did with it (stored it, played it, whatever).

So, you put $930 into your new beast in 1913. Today, a new one sells for 70K, and so your perfectly un-depreciated one sells for that as well. Silly, I know. Work with me.

OK, your total annual rate of return is roughly 4.3%. A lot of that "return" is just inflation. So let's subtract out the average inflation over the same century. That will give the "real rate of of return." Well if you do that, your real rate of return on this "asset" that is stored without cost, risk, or depreciation is about 1.1% per year. The real rate of return on financial assets over the same century was quite a bit higher.

All we have really shown is that the selling price of a new Steinway has gone up a little bit faster than the inflation rate. That's it. A lot of things have gone up in price consistently faster than the inflation rate, and a lot of things have gone up more slowly in price than the inflation rate. Top shelf pianos, actually, are one of the few durable goods whose price has not gone up more slowly than the inflation rate. This is because there has been much less mechanization of the manufacturing process than in, say, the making of automobiles.
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#2156772 - 09/24/13 10:48 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Michael Sayers Online   content
1000 Post Club Member

Registered: 02/15/13
Posts: 1160
Loc: Stockholms län, Sverige
Originally Posted By: Piano*Dad

All we have really shown is that the selling price of a new Steinway has gone up a little bit faster than the inflation rate. That's it.

For pianos as financial investments I tend to think of true collectibles such as one-of-a-kind art case pianos.


M.

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#2156780 - 09/24/13 11:08 AM Re: New Owner of Steinway, John Paulson [Re: Michael Sayers]
Ed McMorrow, RPT Offline
2000 Post Club Member

Registered: 12/09/12
Posts: 2194
Loc: Seattle, WA USA
Absolutely true. One of a kind art cases are unique items.

Since the supply of stock Steinways continues to grow-collectability does not factor into rational pricing.

The present musical utility is the biggest factor in determining price for a used Steinway or other fine piano. If it plays and sound wonderful, and no mechanical weaknesses are present, the rational value comes from comparing the used one to new similar models.

That is why properly rebuilt Steinways are the main competition for new Steinways. They can represent the best value. The really good ones are priced a little low in todays market due to the weak economy. So if you find one today and you agree with Mr. Paulson's "Bullish" buy of the company-you are a savvy investor-just on a slightly smaller scale. And with todays low interest rates-a "leveraged" purchase of a perfectly rebuilt Steinway, will be your best musical investment.
_________________________
In a seemingly infinite universe-infinite human creativity is-seemingly possible

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#2156783 - 09/24/13 11:14 AM Re: New Owner of Steinway, John Paulson [Re: Piano*Dad]
Withindale Offline
1000 Post Club Member

Registered: 02/09/11
Posts: 1958
Loc: Suffolk, England
Originally Posted By: Piano*Dad
This is because there has been much less mechanization of the manufacturing process than in, say, the making of automobiles.

And one might add changes in design and materials.

Last Christmas there was an amazing kingfisher blue Rolls Royce Silver Ghost, "the best car in the world", sitting outside The Bull in the village.

They don't make them like that no more, they don't.
_________________________
Ian Russell
Schiedmayer & Soehne, 1925 Model 14, 55" upright
Ibach, 1922 49" upright (project piano)

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