I'll bring my Diablo to cars and coffee this weekend if you want to check it out Sent from my iPad using Tapatalk
When dealers use the financial aspects of ownership in their ads? Ferrari 430 Scuderia 16M - All Cars for Sale - Cars for Sale - Joe Macari "Unique opportunity to buy a ...snip!....; a fantastic investment prospect. "
https://www.hagerty.com/valuationtools/Market-Rating?utm_source=ExactTarget&utm_medium=email&utm_term=&utm_content=&utm_campaign=Hagerty%20Weekly%20News%206-17-2015
A 0.33 point index drop is only "noise." A drop to the 50 low level of 5 years ago would be real news and probably put an end to this thread.
Lamborghini Countach 25th Anniversary | eBay High bid at auction just a week and a half ago was 200k. And it looks to be the very same car. 60 percent difference in price. https://www.mecum.com/lot-detail/WA0615-215182/0/1989-Lamborghini-Countach/5-Speed/
what are the components of the index ? pre war ? 50's ? doesn't look to me like the muscle car market spiked like long hood porsches, etc
There wasn't an 80% correction in 1990 and there won't be an 80% correction this time. At the top of the craziness, a perfect 365 ft 2+2 went for 215k. Drivers were 150k. By the mid 1990s drivers were 50k. In 2004 I was at my dealer and could have traded my driver 365 2+2 plus 50k for a driver Daytona. (Financially should have, emotionally couldn't). This isn't a bubble, it is a souffle. The hot air will be released. The prices will drop. There will still be value in these cars. If previous cycles hold true, my guess will be a 50% +/- 5% drop. But hey, what do I know, I like 2+2s
a bubble collapse presumes a retreat of prices to previous lower levels and assumes no change in the surrounding economy... what is being overlooked is the advance of revenues generated by the purchasers enabling them to drive prices to new higher levels... those that have, are bring in revenues in greater amounts than ever before, making current values seem like chump change in the grand scheme of their ability to spend. The revenue growth on the income side is at record highs, the number of those making the charts with net worth in excess of 50, 100, 500 million + is growing rapidly. Lofty prices are only the concern of those not participating and being left behind wondering what happened. Current pricing is business as usual as long as those generating the revenues continue on at record levels of compensation / returns. Inflation at work... thanks to the many factors that plague the national economies.
+1 14M UHNW across the globe have 56 trillion USD of wealth - do you think they will be net sellers or buyers of Ferraris over the next 5, 10, 20 yrs? and thats not including the normal rich who can also easily afford Ferraris. id say net buyers. but that's just me
Great points. Question for the group: What % of these buyers are car geeks, let alone Ferrari geeks? Does that even matter? Or will the gross number of buyers simply outweigh the demand at an increasing rate? The fact is the supply of high net worth buyers is growing, therefore demand for things like Ferrari is growing-- like you said. The question is what is the distribution of buying niches amongst the incremental demand? And does that matter at this ratio? And when it comes to UHNW, at what point in net worth do buyers max out their interest in cars (in terms of financial instruments, enjoyment, and pride of ownership, nostalgia, etc)? The 14MM mega money guys + the immense number of super/high/very wealthy guys are absolutely more than enough to support strong/growing numbers in the car market, even if a small percentage of them participate, right now, but how subject to change is that % of interested buyers? As UHNW grows, it won't be all guys from $0-$,,,. Many will be growing their net worths exponentially but will already be starting with a lot. I doubt graduating from a net worth of $75MM to $300MM or from $600MM to $1B will significantly impact spending habits on blue-chip cars. I think a lot of the distribution will skew toward brand nice/easy/specced/attelier new car sales. I don't think there will be a commensurate demand for the vintage/supercar/enthusiast stuff we drool over. Granted, it takes less incremental buyers when they want a car that Ferrari made 300 of in the 1960's. Forest through the trees? Limited high quality stuff will continue to appreciate over time, barring catastrophic cicumstances, due to the sheer number of new buyers and limited quantities of Ferrari, particularly important models in low supply. Duh?
I like the soufle anology. In any event price changes are not linear across all cars. fact is 308's and BBs now fit into a classic style ferrari actegory, thye may decline somewhat, but they are now a different category. If a daytona goes to 500k a Boxer at 250K is still a buy for someone with less than 500k to spend. Maybe trs got hyped up, maybe the newer instant classics need to fall. Yes there are more wealthy in the world today, and if they want older ferraris the supply is finite, so what the new cutoff point. Is it before or after the Tr. By counting 308s and Bbs as classics we have expanded the classic supply, given more wealthy it logical, Trs may be a stept oo far given their numbers. Lets also not forget astons and massers have added to the supply by being collectable on a higher plane. When you get to paddle cars, the supply runs out. If not this cycle by the next we will hit the wall of available supply. Meanwhile if you look at the expesive and agressive marketign by some delaers, its pretty obvious that we have seen the peak on most ferraris this past spring and sales/prices have slowed. Dealers eventualy will need to move stock, so where a Bb was a 350k car it may well now be below 300k. TRs will go back below 100k, maybe into the 70s. 308's yes some really rare low meilage ones will fetch big numbers but the rest will go back below 60. Come to think of it, besides some big auction prices those are the real numbers anyway. Want proof of a slowdown, while a dino was a 400k car, now it will be very hard to find one selling for that, and most delaers will move one in the mid 300k range. Not a bubble bursting, maybe a slight deflation of the balloon, which could precede another surge next summer.
it doesn't matter. the guy who goes from 75m to 600m will then die and leave 100M to each of his 4 kids who and so on....the point is the more dollars in the world in the hands of people who have security is a good thing for hard assets. the rest is details.
...and the Fed has not messed with interest rates during this period of time. If the Fed adds 1% to interest rates watch the action change
Interesting Bloomberg article on bubble types: A Dangerous Combination: Bubbles and Debt - Bloomberg View Contains a link to the Jorda, Scholarick, Taylor study which was the basis of the article. Conclusion: bubbles and debt = a dangerous combination. To me, this explains in large part the 2009 crash in the muscle car market which was fueled in large part arising from home equity loans. For F-cars, I would expect that cars selling for over $200K would be fueled by the wealth effect and cash as ttforced (Post #1436) has advocated several times. However for cars under $200K, I have recently noticed a higher than expected number of cars for sale which have liens and have also noted a growing number of pitches for financing thru dealers and auction houses.
the high volume production cars, such as muscle cars and other lesser high volume period cars seems worrisome and definitely frothy... it is the sheer number of examples available and more coming on line daily. There is an entire industry that has formed to fuel rebuilding / restoring this group, driven by the values attached to the genuine original collectibles, rust buckets otherwise headed to the crushers are being revived. The supply of these cars is growing daily, in hope of cashing in on the nostalgia craze. The legitimate collectors are being diluted by the volume of speculators trying to make a quick buck. Do some quick math, the impression is almost everyone has become a collector or needs to become a collector to absorb the growing supply. The current situation mirrors the basic "supply vs demand" curve... which questions the sustainability new collector / purchasers coming into the market to absorb the overhanging supply. The newly created wealth is there to sustain the lofty prices, but is there enough of those with the wealth or interest to absorb the growing available supply
............what better way to go into a market crash than driving a Ferrari with a 90% LTV loan on it.
I know a person in Germany who, last year, inherited a six figures amount from his dead father. His financial advisor suggested him to invest his money in '65-89 aircooled Porsches. Now he owns nine of them. That's how a bubble rises...
If that was his only money that would be insane. Most I've encountered are not using their base money/ nest egg/ but rather "fun" money (my term). Hence I think the market will do just fine over time.
I don't get the exponential increase on air cooled Porsches. There are a ton of them out there. I dare say they were mass produced. Hundreds of thousands I suspect. Beautiful cars, but I would guess supply will quickly outweigh demand if people start selling them because of the profit they'll make.
