I love the used machinery business because it is a competitive treasure hunt every day. It asks us for impossible calculations about realizable values for illiquid, flawed, sometimes rickety, filthy objects that often have little tangible worth when we are asked to buy them.

Here’s an example of the type of situation we consider at my company Graff-Pinkert every day. A firm has a 25-year-old screw machine or rotary transfer machine that it does not need at the moment. It has long been written off the financial statements, yet the potential seller feels it still has value but doesn’t know how much. He calls dealers for comps, checks eBay for similar machines, and considers whether he may use it again soon himself. He advertises it or calls us and probes for an offer. We feel the piece may have enough potential value that would make it a worthwhile addition to our stock, but we need to determine whether it is badly worn and will require substantial expensive refurbishing, or if it can be sold in its present state, which usually means full of oily chips, a nasty appearance, and out of production.

If by chance the machine shows well and is still running good parts, it becomes inviting for our broker competition, which hopes to turn it quickly for a modest but quick profit, without doing any of the difficult work of returning it to its original state of productivity.