is the bubble due to burst?

This is my kind of fast reaction to recent events and this thread: which "bubble" has deflated more and faster? Cars looking pretty good and- psst!!

this is a secret....

you can drive them!!

AND!! these days the cost of fueling up isn't so bad!

Take those savings and buy a few shares of your favorite company- they are on sale! (or are on their way to being on sale)

 

I want super_dave back! The most contentious thread on FerrariChat is turning into a mutual admiration society. All the excitement is gone...

 

yeh..popcorn getting soggy

 

He brought it up to bolster his bubble bonafides... haha

I would disagree, I have many friends from your alma mater, each one is a class act such as yourself, I wish I could say the same about my school.

Be well my friend and drive in good health!!

 

Three years since the original post,.............still waiting.

 

oh, I dunno, I might be ready to call a top!!! Was perusing Fantasy Junction's website earlier this morning and was amazed at the number of listings that had an insert, "Price Reduction!"

 

I called the top in Monterey 2014 to a bunch of members on here who I'm friends with in real life. I might have been a touch early but I wasn't far off. That said, I still don't see the massive 50%+ crash that many on here called for. I didn't then and I don't now. There are a lot of rational movements down and up that healthy markets exhibit.

 

This is a very good point that I think even rational people can sometimes forget. You are 100% right. With all the talk of speculation, people do get wrapped up in the bubble popping or being... well... another bubble.

Sometimes things cool off from being red hot to "desirable" or good investment.

It does seem like todays society favors the zero score or the 10 score. An 8.5 is no longer good. 8.5 is an indication of leaning towards immanent doom

 

One thing that BW/SD duo don't understand that it's not the bubble talk that gets people riled up, it's the "why" behind the "why" so to speak. Every owner I've talked to on and offline knows that we *could* be in a bubble, it's not exactly groundbreaking insight. It's totally cool to talk about any subject under the sun (bubbles included.) However, if one take the position as aggressively and dogmatically as we've seen on a Ferrari fan/enthusiast site, one could logically assume within this context that acquisition of a Ferrari would be the end goal behind the dogma. Sadly, it's been shown many times however not be the case.

If one did not acquire a Ferrari before the run-up, (or in case of BW, sold them.) Do not plan to purchase a Ferrari on late model versions now; (they have been following the standard depreciation curve.) And stay silent when asked what Ferrari have they been 'priced' out of - no less than six times. One, of course, can only conclude the behavior as kibbitzing and perhaps from a position of envy, malice, and lack of character.

 

Also... we can't forget that the push for more outrageous asking prices were being pushed and pushed every single month... So... a price reduction doesn't always mean that the market is falling...

If they had a F355 for a million dollars and they reduced it to only 250k dollars that doesn't mean the market has fallen on F355s. It means they are delusional... and only slightly less delusional now.

 

that is exactly correct many of the estimates for the Scottsdale Auctions were based on the highest sale before and were unrealistic .. so cooling a little is not a bad thing at all..

 

That's known as the "driving in the rear-view mirror" valuation method. I'm sure the folks at Hagerty will be busier than normal this next cycle calculating their May 2016 assessments. Plus, a lot more can happen in the next two months given recent fallout in the financial markets. It will be interesting to see the amount of recent price change finally quantified.

 

That's exactly what happened in 08/09. The equity and credit markets collapsed, the car market fell 20% and then took off on a massive 300+ rally as people realised they not only didn't know what financial assets they wanted to hold but had no idea what currency they wanted to hold them in and moved to hard but portable assets...

The same thing is obviously happening again... You heard it here first..

Don't come crying to me when that 330 GTC you want is trading above current Lusso prices...

Buy now while you can still afford it!

Mark my words! 3 year from now I predict rusty mark 2 Ford Escorts will be 100k EUR+ and you'll pay 250k GBP for RHD models with the rare vinyl roof option! And you can forget about the RS2000 - they will all be locked away in collections never to be seen again!!!

 

And you can forget about the RS2000 - they will all be locked away in collections never to be seen again!!!

One can only hope

 

I thought you might appreciate this piece from Donald Osborne, whose opinion is well respected in the industry. Many seem to share his opinion stated here:

The 2016 Auctions Begin- Are We In For a Dickens of a Time? | Automotive Valuation Services

 

chris don't be such a simpleton and believe that stuff. those things are written exactly for people like you. as the brightest minds here have reminded us, look no further than dutch tulips, Arabian horses, and US subprime and there you will find the truth. You soon enough, irrespective of your 25m or 2.5B in the bank, will struggle to put gas in your car and pay your bill. Since I'm looking out for you I will do you a favor and buy all your cars from you today, no questions asked, for 2009 prices and you will thank me later as they all go to zero and we replace iPhones with abacuses. Disregard that you may not actually care about the value of the cars since you genuinely love them and don't own them for economic reasons.

 

Dutch tulips and Arabian Horses?

What about Tea leaf reading ?? Everyone always forgets about the tea leaves

 

What is interesting about this link is that if one clicks fully thru to the article, you arrive at Premier Financial Services (Vintage and Exotic Motorcar Leasing).

Now, we all know about the importance of the Residual Value on a car lease. A lot depends on Premier's view of the classic car market in X years as to what their proposed Residual Value would be. Of course, one would need to put a pencil to any proposed terms to see if a lease would be advantageous should eventual purchase be desired. Leasing might be a strategy to hedge the purchase of a classic car given the uncertainty of the market and downside risk. Just a thought for the more adventurous.

 

So true, what was I thinking!!

 

with all due respect the car market is not comparable to the arabian horse market in any way (during the bubble investors were able to get tax deductions for the horse purchase i.e. 5 year depreciation so they were buying much more then a horse).. the subprime again was influenced and mostly caused by government manipulation of both housing / real estate market and banking regulations ) .. and of course the tulip market was a complete scam...
so the government (USA) is mostly out of the classic car market run up .. ..
Now the car is directly affected by consumer confidence and the world lacks a whole lot of that .....
agree with your last statement if you buy only what you love and can afford it the rest will work its way out.

 

you don't need to caveat it with all due respect - I was being 100 percent sarcastic!

 

I hear that! I have bought/restored/driven 'collectible' cars since I was 15, but never spent serious money until '08 when I noticed that as the world was coming unglued, collectibles in general barely felt a ripple. If, as one fund manager told me last week, we have been flying through the eye of the same hurricane, and are now entering the back side, then your prediction should be as true now as it was in '08.

Yep, I can forgive auction houses a little aspirational pricing given the breathless trajectory of the last 5 years. I also think the 'priced right for condition' argument is stronger than many credit.

 

Re your last point, most of the top US & European restoration houses have a waiting list of in excess of 3 years as mentioned in the Retromobile thread. So even at the level, $5 million+, where restoration costs are a minor % of the overall car value you still have the nuisance cost of buying something that needs to sit unused because you can't get the concours level restoration you want for x years. I am not a billionaire so I can only guess at what effect that has on their buying, but it must have some effect?

 

Agreed. Anyone who is mystified at the big price gap between a 100 pt car or time-capsule original, and a very good driver, has never managed a restoration. Uncertainty, headaches, rework, unpleasant surprises and interminable delays, and your reward is being 'upside down' valuation wise... all while missing out on 2 years' use of the car!

 

2 years, it could be a bit more sometimes depending on amount of DIY, money and resources available. This thread is a good example: http://www.ferrarichat.com/forum/vintage-thru-365-gtc4-sponsored-vintage-driving-machines/65311-yo-ho-yo-ho-shaughnessy-barn-find-me.html

This problem holds even more true for unibody cars. I am a fan of the BMW E9 CS series myself, which can be very dangerous cars to buy and even to drive, depending on how much rot there is underneath that (often shiny) paint. In bad climates they rusted faster than Alfa Romeos or Fiats and on more dangerous places, often as quickly as within a few years, so there are a lot of examples that were patched multiple times. Such often nearly invisibly for the untrained eye. Because of their construction the repair is difficult and often problem areas get patched up so it looks good while it is actually structurally unsound and therefor an unsafe car.
This means there are many older restorations that look nice but actually are not, worsened because good new panels and other items have not been available until about 10 years ago. Many of these were daily runabouts for many years and because they were good mechanically, they were run into the ground. Now some of these get a quick cosmetic makeover and are offered for good money, buyer beware. If you have to redo one of the bad ones you can quite easily exceed its value. And some are just too far gone to do that with, what also means there always seems to be a supply of "cheap" examples.
Moral being, there is great variation in price and value.