NBTHK Paper levels and their effect on value (discussion from forum to share)

This is an interesting topic with regards to NBTHK paper levels and their effect on values from the Nihonto forum which I would like to share:

Source: http://www.militaria.co.za/nmb/topic/12048-paper-levels-and-their-effect-on-value/page-2?hl=%20ryumon%20%20nobuyoshi

In summary:

Some years ago when the Fittings Museum collection was being auctioned at Christie's Darcy went to New York to look at the swords and the sword was attributed to Senjuin by the fittings museum but had no other papers and he bought it thinking it would attribute to another smith.  

  

http://www.christies... ... 400c019579

GBP 21,510 + 5378 (25% buyers premium) = GBP 26,999 (US$35,000 ~ 38000 depending on exchange rate)

After sending it in for Shinsa and it papered to Ryumon Nobuyoshi. Now, potential buyers who went out and sought opinions were told that the price of the sword was "too high" because it was "only Tokubetsu Hozon." People were assessing the sword by the papers using them as a cap. Since it was clear it had never been submitted to Juyo, people were making the error of setting the value as if it had failed Juyo several times. A couple of people kicked the tires, went out and sought opinions, were told by "wiser" people that it was too much for "only Tokubetsu Hozon" and walked away.

Later , the sword was sold to a friend of Darcy at $40,000 and there were criticism with regards to the price of $40,000 price for "only Tokubetsu Hozon." The friend submitted the sword right away, and it passed Juyo on the first shot and furthermore the koshirae passed Tokubetsu Hozon. So now after it got Juyo for the sword and TH papers for the koshirae. it looked like a much nicer purchase if you were using the "only Tokubetsu Hozon" judgment.

Same sword. Different papers. Opinions now change on the value of the item.

Some time later on he put the sword to auction again and it went for $56,000. The point here though is that the same sword at the same auction house, with a different attribution and different level of paper came out to a different price. 

Same auction house. Same customers. Same eyes. Same sword knowledge.

Different papers, different attribution, different price.

The price changes because with the papers settled the risk is removed, your-opinion-vs-mine debate is settled by the NBTHK on attribution, wave function partially collapses and value in this case is higher at Juyo. 

Why? Because the net opinions of the marketplace have enough people that use the paper to value the sword rather than the sword to value the sword that the market price is influenced. Wrong or right, the sum of the opinions of the market shift the price.

If you're good, you can pick the right sword that everyone is nervous over because they won't trust their judgment, and their lack of participation in the market as a result of that, lowers the price for you. Similarly when you settle the open questions, those people will return to the market with their opinions and if you were right in the first place, their opinions will now float the value higher.

So the sword went from being a very expensive "not even Hozon" maybe-Senjuin in the opinion of the market (I thought it undervalued so I bought it) to a reasonably priced Ryumon Nobuyoshi with Tokubetsu Hozon papers (in some people's opinion including mine) -or- a "too expensive for only Tokubetsu Hozon" sword (in other people's opinions, including every sword dealer who was not selling it haha) and then to an inexpensive for price paid Juyo Token Ryumon Nobuyoshi with Tokubetsu Hozon koshirae and then finally collapsed on a value of $56,000 in the open market.

Value is always what a reasonably informed someone will pay for it in a reasonable amount of time with a reasonable exposure to the marketplace. Sum of opinions include people who think a school or smith is crap and others who think a school or smith is superior. Some think one organization's papers are crap and others think they are great. Some judge the sword on its own without factoring the level of the paper at all, others look at the level of the paper and assign the sword a value from that ("only Tokubetsu Hozon").

All opinions factor into what the thing is going to settle at in the open market. Obviously in this case the sword is much more highly valued in the market as a Juyo/TH Nobuyoshi/koshirae than as a no paper/no paper Senjuin/koshirae.

Food for thought: Knowledge is power.