State of the Vintage Stratocaster, 2005, by George Gruhn

[Editor's note: For this year's state of the vintage Stratocaster coverage, we have asked vintage experts George Gruhn, Richard Friedman, and the Burst Brothers (David Belzer and Drew Berlin) to discuss, in addition to the state of the collectible Strat market in general, their take on what affect, if any, two events in 2004 have had on the market: The 50th anniversary of the Fender Stratocaster and the 2004 Eric Clapton Crossroads auction. Also, instead of a single presentation like last year, we will present three separate "state of the Strat" articles, the contribution below from George Gruhn being the first.]

State of the Vintage Stratocaster, 2005

by George Gruhn

2004 marked the 50th anniversary of the introduction of the Fender Stratocaster. Fender celebrated the occasion with reissue models as well as new variety Stratocasters to commemorate the occasion. While this was a great promotional opportunity for Fender, from my perspective as a vintage instrument dealer I have seen little change in the market for pre CBS Fenders which would be attributable to any 50th anniversary effect. It is my opinion that collectors seeking pre CBS Stratocasters are not influenced by an anniversary date nearly as much as by their desire to collect true “golden era” instruments which they regard as not only the ultimate in quality, but as true classic American icons. Without doubt, the 50th anniversary of the Stratocaster and the Fender company’s promotional endeavors to promote recognition of this event have increased public awareness of the model, but serious guitar collectors have been seeking fine examples of the model with fanatical zeal for many years.

Another landmark Stratocaster event of 2004 was the Eric Clapton collection auction in which a number of his guitars sold for record prices. His Stratocaster named “Blackie” which was assembled as a composite of several instruments and parts he bought in Nashville in 1970 when he was in town to do a segment on the Johnny Cash show with his band Derek and the Dominos sold for almost $1 million setting a record for the price ever achieved for any Stratocaster. My shop was in its first year of operation and was located only a couple of hundred feet from the backstage door of the Ryman Auditorium where the Cash shows were taped. Eric bought several Stratocasters from me at that time as well as buying a number of Stratocaster necks, bodies, and other components from Sho-Bud Guitars which was located right around the corner from us. I am not sure exactly what mix and match of parts from my shop and Sho-Bud went into Blackie, but what is clear is that this guitar was one of the most significant instruments in Eric Clapton’s career. From the point of view of a collector wanting a pristine original instrument, it would not be a highly desirable instrument, however, from a utilitarian point of view it was certainly a great guitar. Blackie’s selling price, however, obviously is a function of its memorabilia appeal rather than either its utilitarian value or its appeal as a vintage instrument. The same can be said for his ES-335 and several other instruments which sold for astronomical prices at the auction. I view the memorabilia market and the vintage instrument market as separate entities which operate quite independently of each other. In spite of the tremendous amount of publicity surrounding the Clapton auction, I do not anticipate that it will have a profound effect on the vintage instrument market.

I have been collecting and dealing vintage instruments since 1963 and first opened my shop 35 years ago in January 1970. When I started out in 1963, I saw remarkably little interest in vintage electric guitars of any kind. At that time the oldest Stratocaster was a nine year old used guitar and sunburst Les Pauls were only three to five years old. All Fenders were pre CBS and used ones of any age or color were readily available for no more than $100. The Folk music boom had generated interest in vintage acoustic guitars, but I saw remarkably little activity in the vintage electric guitar market until Mike Bloomfield started playing with Paul Butterfield. Once Rhythm & Blues started to attract mainstream attention, interest in vintage electrics exploded, but most of the requests I received for vintage electrics were for Gibson Les Paul models and Fender Telecasters. I saw very little activity in the vintage Stratocaster market until Eric Clapton started using them. It is my recollection that within a matter of weeks after he was seen using Stratocasters on stage, I started receiving numerous inquiries from potential buyers and prices began to escalate rapidly. From that time onward, I have consistently received more inquiries for Stratocasters than Telecasters. While Strats and Gibson Les Pauls sometimes have appeared to leap frog each other in popularity over the years, from 1970 to the present there is no doubt that the Stratocaster has been the most popular model Fender guitar and throughout much of that time has been the single most popular electric guitar model among all makes and models available.

I still vividly remember that Jazzmasters and Jaguars were far more popular as new guitars in the early and mid ‘60s than either Stratocasters or Telecasters. Telecasters were more sought by vintage collectors in the mid and late 1960s than Stratocasters and continued to be more popular in Nashville’s Country music scene than Stratocasters through the 1970s. Most players and guitar buyers on the scene today, however, not only view the Stratocaster as one of the preeminent guitars ever made, but have no recollection of any time when the Stratocaster occupied a less exalted niche. I have no doubt that the Stratocaster will continue to be the most popular Fender guitar in the foreseeable future, and in all probability will continue to out sell any other model by any American manufacturer of electric guitars for as far as my crystal ball permits me to gaze into the future.

Vintage instrument prices have risen dramatically during the past five years. The year 2004 has certainly been no exception in this regard. For more of my views on this matter, I suggest the reader go to my website, www.gruhn.com, and click on the “Newsletter” button to view my periodic newsletters in which I have presented my market philosophies at great length.

While rising prices and increased demand are great from a dealer’s point of view and help investors who are already holding a large number of instruments, there is more to a healthy market than monetary value alone. Just as Blackie was assembled as a composite, numerous other Fender guitars have been assembled in a similar manner. Some have a mixture of all genuine Fender parts from similar age instruments while others have parts which, although they may be genuine Fender components, may vary in age by decades. Still others have Fender and replica parts mixed. Since replica necks, bodies, electronics, hardware, and even decals are readily available, buyers and collectors must be alert for total forgeries. Unlike acoustic guitars and most Gibson electrics which are relatively difficult to disassemble, Fender guitars are build virtually like an Erector set in which almost everything it interchangeable. While numerous acoustic instruments and Gibson electrics have been refinished or customized over the years, the percentage of Fenders which have been modified or even assembled as forgeries is vastly greater if only because it is so easy to do. Refinishing an acoustic instrument requires a great deal of skill and doing a similar job on a Gibson electric guitar with a bound body and fingerboard and glued in neck is also a job requiring expert professional training. While a truly good refinish job on a Fender is no easy task, due to the ease of disassembly and the lack of binding on the body, many people have plunged right into the task whether they are skilled or not. As the years go by, a higher and higher percentage of Fender guitars have been modified. As prices of original Stratocasters, especially custom color examples, have risen dramatically the number of expert custom color refinishes has gone up at an equal if not greater pace. Back in the 1960s when I started out, it was very easy to distinguish an original finish from a refinish. If it looked professional, it was original. If it looked like barn paint applied a broom, it was a refinish. There was remarkably little in between. Today, there are hundreds if not thousands of professional refinishers some of whom are extremely skilled even to the point of doing very convincing imitation aging to give the finishes a vintage appearance.

Unlike a stock broker who has access to virtually unlimited numbers of stocks at the current market price and who does not need to be concerned with authenticity or alterations, a vintage instrument dealer, buyer, or collector is faced with a very limited availability of prime condition original instruments and must be an expert to determine authenticity and originality or must trust the integrity and knowledge of the seller. When I first opened my shop it was no problem for me to find numerous fine condition original Stratocasters as well as other makes and models which were highly sought after. Today it is a far more difficult task. Stratocasters in particular are not offered to me at near the rate they used to be. Whereas back in the 1980s and early 1990s I could go to numerous guitar shows and buy clean original pre CBS Stratocasters without difficulty, today market conditions could not be more different.

I just got back from the January Columbus, Ohio, guitar show a few days ago. Thousands of guitars were on exhibit and vast throngs of people came through the door, many of whom were carrying instruments for sale. I did not see any interesting pre CBS Fender Telecasters or Stratocasters for sale in exhibitor booths. I have been told that there was one 1961 original Tele which I missed, but that there were no unadulterated pre CBS Strats on display which I missed. Those dealers who had them left them at home since they don’t need to bring them to the show to sell them for premium prices. I did not see or hear of a single clean original pre CBS Telecaster or Stratocaster that was brought in by the public for sale. While the Columbus show is not as big as those in Philadelphia, Dallas, Texas, or Arlington, Texas, the Columbus event is quite sizeable and is indicative of a general market trend. A high percentage of the clean original pre CBS Fender Stratocasters which are still in existence are already in collections and are not currently for sale. Many dealers are collectors themselves and are inclined to hold on to their best Stratocasters, especially when they view them as better than money in the bank. When I get pre CBS Fenders, I sell them at what I consider to be a proper market price. My personal collecting interests lie more in the area of acoustic instruments. It is my philosophy that if I sell an instrument at the going market rate today and reinvest that money in other inventory which I can then turn that I will in the long run do better in business than simply holding inventory in a personal collection. The fact remains, however, that in spite of the fact that I am able to sell clean original pre CBS Fender guitars and basses for far more today than I could have achieved in the past, these instruments account for only a very small fraction of my total business. I am simply unable to purchase or consign enough pre CBS Stratocasters in clean original condition to fuel the business.

While prices today may seem so high that they don’t look like good deals compared to even a year or two ago, I do not think the market has peaked. Not being clairvoyant I cannot tell how much higher prices will escalate, but supply and demand are still clearly driving the market for pre CBS clean original Fenders upward. If a person is looking for a utility tool, it is certainly possible to buy a very playable new Custom Shop or even Masterbuilt Fender for significantly less than the cost of a similar pre CBS original. While I am firmly of the opinion that the pre CBS models are the true “classics” and are unsurpassed in quality, it is very evident that Fender is today making new guitars which are of extremely high quality and are eminently suited for use or stage of in the studio. I am equally firmly of the opinion, however, that from an investment point of view the vintage originals are the ones which will perform the best. My advice is to study the instruments and learn as much as possible and then to buy based on that knowledge as well as the integrity and reputation of the seller. While there are still some “sleepers” out there which may be great bargains, most deals which look too good to be true aren’t good deals at all. If you are not an expert and totally confident of your ability to examine an instrument and determine originality on your own, it is more important today than ever before to deal with reputable sellers who will offer written certification of authenticity.

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About George Gruhn

George Gruhn is the co-author (with Walter Carter) of Gruhn's Guide to Vintage Guitars, which is the comprehensive field guide to vintage fretted instruments, and the companion volumes Acoustic Guitars and Other Fretted Instruments and Electric Guitars and Basses. These books chronicle the history of American stringed instruments, and are beautifully illustrated and exhaustively researched. His articles are published in numerous magazines.

George moved to Nashville in 1969 after getting his bachelor's degree from the University of Chicago, and doing graduate work at Duke University and the University of Tennessee. In 1970, he established Gruhn Guitars, which is one of the largest dealers of vintage and used instruments in the world, located right behind Nashville's Ryman Auditorium. The "guitar guru" has been a featured columnist for Pickin', Frets, Bluegrass Unlimited, Guitar Player and Vintage Guitar. He is the former vice-president of research and development for Guild Guitars, and his designs are currently featured on a line of Tacoma guitars.

Notable customers have included, among many others, Eric Clapton, Neil Young, Johnny Cash, Lyle Lovett, Vince Gill, George Harrison and Paul McCartney.

Website: Gruhn Guitars
Email: gruhn@gruhn.com
Telephone: (615) 256-2033

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