A weblog reader sent some thoughts on the controversy of Herbert Axelrod and his valuation of his Stradivarius violins donated/sold to the Smithsonian and the New Jersey Symphony (touched on in a recent post). The perceived over-valuation seems to be fuel for the tax-reform fire currently smoldering in DC. This reader suggests that the claimed value may not be that outrageous, depending on how you assumed the instruments might be sold:
The problem with Strads or other high-end instruments isn’t that they have no appraisable value — it is that they have very, very limited liquidity. The market of buyers and sellers is so insanely small that the notion of more than one or two moving in the same month is highly unlikely…. Whoever did the appraisals is, in some sense, justified. If the question is ‘how much could one sell THIS VIOLIN for’ — and the question is then asked five, or ten, or twenty times, you look at each violin, consider the market as it currently exists (without that violin for sale, or any of the others) and value it.I think this is a unique situation — not only are you dealing with the difficulty of appraising rare (‘priceless’) goods, you’re dealing with a volume of them such that the value of any one decreases substantially based on the presence of the others.
The idea that this case is going to become the poster child for what is wrong with non-profits is, IMO, troubling in the extreme. There’s far more obvious and self-serving nonsense going on out there….
Thanks for the thoughts…keep sending them along.
UPDATE: In a bit of synchronicity, NPR featured two stories on Stradivarius instruments this morning, this one about a salvaged and restored cello, and this one exploring the Library of Congress collection of the instruments. The latter has some great commentary from violinist/commentator Miles Hoffman about what makes them so special to play (and so expensive to purchase).
