GPI (Guitar Price Index) beats the Dow

The real "blue chips" these days come in cherry red and sunburst: pre-1965 Les Pauls, Stratocasters, and Telecasters are vintage electric guitar models that have skyrocketed in value. Some more recent instruments of distinction are also making Wall Street look like Tobacco Road.

The April 2003 issue of Business 2.0 points out that a $50,000 investment in 1998, if placed in dot-com bubblers Inktomi, TheGlobe.com and Inktomi, would have vanished. The same amount would have purchased a 1959 Gibson Les Paul Standard with a beautiful sunburst finish, a guitar now worth $150,000. "Fine guitars are functional art" that "made the tones of popular American culture," according to Gil Hembree, who co-wrote the 2003 edition of the Official Vintage Guitar Price Guide and is quoted by Business 2.0. Those older instruments were made in very limited numbers, and survivors in good condition are scarce. For example, Gibson made only 643 of the '59 Les Pauls, which Hembree calls "the American Stradivarius." (Incidentally, they sold at the time for $260.) Guitars owned by well known stars command a premium - two custom-built guitars played by the late Jerry Garcia of the Grateful Dead each sold last year for around $800,000 to $1,000,000. (More recently, the "Frankenstein" bass guitar -- constructed of the remains of 5 smashed instruments, hence the name -- favored by the late John Entwistle of The Who sold at auction for over $100,000.)

A Gibson ES model

Collectors are warned to deal only with respected dealers, and to beware of eBay deals that seem too good to be true (they usually are).

Read the complete Business 2.0 article

Browse the Vintage Guitar magazine site, and learn more about this year's price guide

Read more on the spring 2003 Entwistle estate sale