Paul, excellent excellent post! And I don't even know craps or other gambling. I can tell you as someone who is a passionate owner of these cars, whether it is a Mondial or a 250 GTO or a 355 or take your pick, the financial side is something that is never on my mind when I am driving, looking, detailing, even smelling, these amazing machines. But money is work in another form and as I think most work hard for their money the valuation is an important factor. It sure is nice when the value of a car you own goes higher. But that doesn't change the way the car drives. And if the value were to go much lower- well, you're still driving a Ferrari! Sure feels better than when the stock account goes down and you're driving a desk...
Pictures unfortunately only tell half the story. As someone in the business, there is a big difference between a 'restored' car and a 'properly restored' car. If you are only looking for a car to put in shows and never drive, you can buy by pictures alone. If you are looking to enjoy the car you really need to have an expert evaluate the car and drive it. There is a big difference between a car that looks perfect and one that has a properly working heater, a solid electrical system, runs well, and brakes properly. It's not uncommon for someone new to these cars to buy one because they think they are getting a deal and then have to put many thousands of dollars into them to get then to work. That can lead to years of frustration as the talent pool of people who can really work on these cars shinks.
Hi Hp, my point was mostly aimed at market perception of value. There are always a number of cars on the market with prices all over the map yet with even greater variety in underlying value, skewing the market and collector perspective. Shiny, seemingly cheap examples remain on the market, depressing prices, while some other collectors become disappointed and less enthusiastic with classic car ownership because of having bought a 'cheap' polished lemon. A new paint job and nice looking mechanicals can hide a great deal of pain. While that is a rule of thumb with classics, the E9 is one of the best examples I know because the risk with them is extremely biased, for 80% of it is in the bodywork. A 50k$ example can easily hide 30k$ of serious bodywork, and unfortunately not a cosmetic problem for it goes further than a few rocker or floor panels - it's also a big safety issue. The mechanicals are important yet easy and inexpensive in comparison. If all is well, they're really great!
Art taking a big tumble. Classic cars will be next. Does this sound familiar?: "The drop in prices has been blamed macho 'willy waving' by auction house bosses, obsessed with selling the most art for the most amount of money and not looking at margins." Sotheby's and Christie's Auction houses report falling profits as art prices 'peak' | Daily Mail Online
The auction houses preferred to sell what was very easy to sell, as like as Picasso or Ferraris, for years. Now the game is over: try to sell Flemish painters, or Lancias and guess how much it's difficult to do...... Talent is the key and i'm not seeing it often.
"Willy waving"? Never heard the term before but after checking the urban dictionary surmise that the equivalent on our side of the pond is 30 seconds of fame on TV at a Barrett-Jackson auction. The article also contained a profound statement by British art historian Bendor Grosvenor: "He added: 'We have to get away from the idea of buying art as an investment. It's an illiquid asset and difficult to make money from. Always buy what you like and hope it goes up in value.'" Sounds like a statement proclaimed earlier by many in this very FChat bubble thread.
There was an excellent example of this comment on Velocity just last night where the TV characters bought a 1964 Barracuda, "restored" it, and sold it for $8,000 at auction and turned a profit of $125. It is difficult to believe that any car could be disassembled, painted, and receive a new interior for $7,875 ($8,000 -$125 = $7,875). Plus the car almost didn't make the drive across the auction block when the starter failed and needed to be replaced during the event. Talk about someone buying a pig in a poke.
Too true, too true. And there are a lot of recent buyers out there who are going to get burned. Even many good cars are not so good. The strandard of driving in the uSA seems to be if the car will run well enough to start easily and make tot he cars and cofee somewhere around the speed limit. How would these owners even know if their car was runnign properly.
You mean the same idiot that told you that the art market would tank first before the car market at the beginning of last summer? And leads the way on the way up and the way down. (Pretty sure there is now a thread that was just recently started with that premise in its title). And the same idiot that told you that the top end of the classic car market (rare vintage cars) would tank before the "high production modern classics" would tank. And the same idiot that told you that the supply of cars on the market would begin to grow, and grow and grow. (up almost double the amount of cars on the market today than in early 2013). And the same idiot who was accused of being a speculator, when he was putting 3-4 thousand miles a year on each one of his cars, modding them with straight pipes, exhausts, and doing 600 mile road trips? The only fool is the one who thinks that they are ALWAYS the smartest one in the room. Fact of the matter is, classic car market expertise, I've owned more cars than x member and therefore am smarter are all one's own perception, nothing more. The smartest guys in the room, or should i say the wisest and least likely too be foolish ones in the room are the posters who started this thread and called this recent trend for what it really was. They deserve the credit, nobody else. And in typical fashion, the ones who attacked, laughed at, took people's words/posts and altered them to their liking, and to discredit anyone with an opposing view of what has occurred since winter 2013 (basically 2014), were more than likely between the ages of 30-45 years old and haven't been around the block enough times. And the gentleman who started the thread? Some of them may fall in that age range, but I'd bet money that many of them are significantly older. And the ones who are not are the ones who are wise enough to listen to the wisdom provided by the older generation. The only prediction I have left in me, which I shared with Super_Dave awhile ago is the level of personal insults. I'll bet that the personal insults by the usual suspects will become more and more frequent as the market continues to head south. Pretty sad and pathetic, but I guess some cannot control their emotions, just like the speculators who jumped on the bandwagon in the recent two years to buy cars strictly for profit and nothing more. They just could not and cannot help themselves.
Is is getting dangerously close to the Presidential campaign level of invective,,,all be careful we don't need that in car collecting, let's leave the insult debate to the real big causes... Obviously from a foreign observer,,,
Bradwilliams, you were actually the furthest thing from my mind when made that post so it's interesting that you "just could not and cannot help [yourself]" and have pull yourself into the conversation as if someone just had to be discussing you whenever the word "idiot" is used. For the rest of your personal insults, I can't be bothered engaging in your confused gibberish. FWIW, I don't know how anyone who calls a bubble 3+ years before it's an actual bubble deserves so much credit.
Dont waste ur breath sherpa. Bw will run to the mods. Although he shld be banned for that post. Bw can u show us the cars ur going to buy now that the market has crashed? Or r u too busy buying art first? Sent from my iPhone using Tapatalk
Why should he be banned for that post? I don't see it, especially compared to so many posts on here. I do find it odd that there are tons of posts on here talking up prices but posts that take a contrary view are condemned so aggressively. In the classifieds section (where I never post on prices, including prior to the rule) there are many people who say asking prices are "too low", and that prices are "rising fast" etc. I understand supporting others, but if people think the prices are too low, why not buy the car? For calling a bubble 3 years ago, despite not being one of those people, it is much more insightful to see prices as overstretched. The U.S. housing and credit bubble was called in 2006 by some people and that was, in fact, insightful. The timing element (what traders would trade on day-to-day) is a different story. But for the average person, it would have meant the difference between renting and living within their means for the next few years, and then buying a house 25% (or more) off what it was previously going for, vs. potentially being underwater on a mortgage or having a house in foreclosure. For the car market (topic here), knowing prices are wacky may help someone avoid paying 2x the price for an air cooled run-of-mill 911 than it was a couple years ago, only to be able to buy that same car in 6 months at 1/2 that price.
Dave, the issue is that everyone could see the prices were rising. Everyone could see the prices were rising quickly. However, people with experience could also see rising demand and the pockets in which that demand manifested itself. Additionally, this is not the first time that we have seen this so there was a template. The difference was the source of the money, the additional wealth in the world, the increased efficiency of the marketplace, and a host of other factors. If you put that all together and you had boots on the ground, you could see that we were far, far away from these Chicken Little type statements having any relevance to reality. If someone read these bubble statements at the time and chose not to act on buying a car that they loved because they feared a market crash was eminent, they would now be in the unenviable position of having to pay substantially more for said car than they would have when this thread was started - even with this correction and the further correction to follow. Not to mention that those are three years you could have immensely enjoyed the car that you will never have back. That's particularly relevant to many people. Personally, I have had issues that indicate that I can't count on living to a normal life expectancy. Three years of lost fun is material. However, if you say it long enough and keep saying it, eventually you will have the chance to say "I told you so," as the people who started this thread will say. Of course, timing and relevance will be ignored but that won't stop them. And of course, those with actual experience are decried by those on the sidelines with virtually no experience. It's not about being the smartest people in the room (in fact I know that the smartest people here are not even engaged in this thread). It's about sharing relevant and pertinent information that does good instead of harm. I'll say the same thing I always say: If you can buy a car that you love today and can afford it properly and responsibly, then you should do it. There are no guarantees of anything in life, whether they be future appreciation, future appreciation, or even the promise of a tomorrow itself.
The fact that everyone could see prices rising quickly is ... obvious. What isn't obvious is the real lack of any good reason for the magnitude of the price rise vs. what people perceive as causes. China, inflation, oil wealth, greater wealth overall, new investment class, rarity, last of era, etc. were all cited. Classic rationalizing of something that is in fact self-perpetuating -- prices were going higher because they were going higher. A speculative bubble isn't healthy for any market. Speculation is what drove prices higher, not any of the reasons that were (and are) constantly touted <-- my opinion. Nothing wrong with discussing this in an open forum, without resorting to attacks (direct, or indirect). I'm okay with opposing views too. As for someone deciding not to buy because they fear prices are too high and will come down. There are multiple types of buyers. For some, the financial impact of a $2mm car becoming a $1mm car is a rounding error to their net worth. Or a $500k car becoming a $200k car. For those people, there is no reason to delay purchase because of mispricing. I overpay, or have little price sensitivity, to a bunch of things that others may be more (or less) price sensitive to as well, and it is a conscious choice. But if the price change is potentially meaningful, then perhaps it is fine and healthy for someone to delay a purchase. Or at least go in eyes-wide-open and not anticipate the car will be some sort of investment and keep going up. You can see countless posts on here that discuss cars as investments and going up over time. That is a very, very dangerous assumption for the vast majority of cars that have recently spiked in price. Again, I think anything that causes someone to sit back and give it a second think is healthy and a positive contribution. Especially when the "rah rah" cheering of pretty common cars that didn't get much attention a few years ago gains volume.
Thank you for your kind words Caeruleus11. All your points are dead-on. I completely agree with you views! One of the questions that came up from a new member here was this: "What set's Ferrari apart from other automakers? One of my answers was the 'passion' of owners and enthusiasts. I will say that I am guilty of over zealousness in defending my Ferrari friends here. Some of the commentary (and I will be the first to acknowledge that I may be wrong) seemed like trolling. It's hard to distinguish at times since we do have many trolls. I'm trying to give folks like SD, BW, the benefit of the doubt, and engage only in constructive and positive exchange of ideas. Be well and drive your cars in good health my friend!
I think these are words of wisdom - I've heard this repeated from my friends in the automotive world as well as the art world. Buy what you like and admire, drive, eat it, wear it, and sit on it in good health! Life is short, death is long! Can't go wrong with this philosophy.
One more thing, one individual cannot be the arbiter of who is the smartest and who isn't, particularly on a message board. I think that may be part of what rubbed BW the wrong way, this implied notion of a certain crowd on here who have a shared opinion, acting as though they are above others who hold a different view. Some have positioned it as owners vs. non-owners, or having something to do with age. I don't think you personally meant for it to come off this way but when someone feels they can judge who is indeed smartest, it implies they are in a position to judge...
Super_Dave, I think all views should be accepted and not denigrated with personal insults or off the topic attacks. Your point here an excellent one, I agree wholeheartedly. I apologize for my past remarks, as I sincerely thought you were a troll. If I may respectfully inquire to move the conversation forward. I agree that the high-end market is at a high watermark. I do not have the desire to acquire an Enzo era car (pre-1969) or even say an early Fiat Era era car (Boxer, F40, F50), and to be completely transparent; I would not have the means even if I wanted to. So the price action at these auctions is irrelevant to my personal situation in all scenarios. To put it another way, if the price doubles tomorrow or gets cut in half, it has no effect on me. The saying, of course, is the tide lifts all boats (and can drop all boats as well) - so I agree with you on your premise. I do have friends that own these cars, so all things being equal, I can only hope for positive things for them. My question is simply this. What did the recent price action affect you in a negative way? Perhaps the answer is it did not; this is fair. If this is your response, my question is simply this. Do you feel inflated Ferrari values are negative for the automotive world? Or is your viewpoint just to warn would-be buyers that buying a Ferrari in today's climate would be unwise? If it is the latter, do you discount the raison d'être to acquire these cars for most people here? The personal satisfaction of ownership and driving these great vehicles, true - one may overpay in today's climate, but to put off a purchase may squander the precious time each of us is allowed on Earth to enjoy and fulfill one's dreams. I argue one should should use prudence and overextension should not be exercised to achieve these goals, but assuming one does not engage in 'mortgaging' the house to obtain the car of their dreams, do you see this as a completly negative thing? Thanks in advance and I hope you find this a positive post. I also hope you respond to what I consider fair queries.
I think people here might be letting their own personal insecurities get in the way of common sense. Let me say this another way: this board is very heavily loaded with exceptionally smart people. There are some who I feel (my opinion only) are exceptionally smart. I haven't noticed if they've weighed in on this thread at all (maybe because we are the dumb ones). It should go without saying that anything that I say here on anywhere else is my opinion and you know what they say about opinions. When I state something that I know factually, I usually preface it with "in my direct experience" or something else indicating that I have witnessed it firsthand. As far some people thinking they're above others because of their views or others disagree, that's not the case. What's an issue is when those with no actual experience talk like know it they know it all. It's not unique. I'm sure Tom Brady and Peyton manning hear the very same thing every Monday morning by people who have never touched a football outside of a family barbecue. I personally welcome opposing views as long as they come from a place of fact and personal experience and knowledge. When it simply comes from the sidelines from someone who has never been there or done that, that should be noted accordingly. It doesn't necessarily make them wrong but that view shouldn't hold the same weight as someone who has actually done whatever it is that's being discussed. This is not too different from being approached by a 14 year old kid when you're driving your car and he says, "why didn't you buy this or that or this other car? Road and track and motor trend says they're faster 0-60 by 0.01 seconds and the top speed is 4 mph higher." Well, you didn't buy those because they're ugly and they drive like wooden trucks with no sense of occasion or enjoyment but a magazine speed test doesn't say those things. The point is that people can quote things all they want but there's no substitute for your own personal experience and knowledge. I hope that makes sense.
Thanks, Paul. I have been in and out of the market for Ferraris for a few years, but "most" were not impacted by the price rise, so it really has not impacted me. The cars I was most focused on were: 360/F430 360 CS The 360 CS market and manual F430s have taken off. That said, the biggest price gains for them were after I decided to go a different route, so no real impact to me personally. I think any rapid price increase hurts most owners and buyers, outside perhaps long-term investors and near-term speculators. Owners and non-owner enthusiasts: Negative: generally pressure to be more careful with cars and mileage if prices unexpectedly increase in price. Harder for people to buy cars that may have otherwise been in reach. Positive: price increase improves care and restoration of perhaps neglected cars. Long-term investors: savvy ones won't care. If they bought pre-increase, they can rotate out of some cars and into others, or just keep them. No harm, no foul if they don't need the cash. Speculators: ones not holding the bag when the music stops benefit, while others get hurt pretty badly. I'm pretty indifferent to the outcome to this group as anyone buying purely for the flip should be aware of the attendant risks. As for your question regarding forewarning of others of the risks of buying. Anyone buying these cars are adults and can decide on their own. In a message board such as this, there is a sharing of views, in particular on things at the forefront of people's minds. To me, the real interesting stuff is the change in engines to turbos, and the elimination of manual transmissions... and what is going on in the used car market. You can see all the threads discussing value (usually to the upside) and you can see all the banter in posts on where the market is heading. There is a lot of interest in discussing this, though I think it is (well, was) mostly biased to the upside. I have stated in the past some of the big indications that things were funky, not the least of which were the types of justifications thrown around in support of price increases. The other is when certain cars and sub-variants of models were rare because of initial low demand (rather than other supply-constraining reasons) this rarity is now perceived as though it is inherently valuable in itself. Like me custom ordering the only zebra stripe paint job should automatically make it a collector due to rarity in 20 years... and seeing the prices zoom up only 6 or 7 years after the fact. As for all the points of living life to the fullest, I agree wholeheartedly. I made my first expensive car buying decision after my own "it's a short life" moment. But there is balance, and there is a middle ground between mortgaging the house for a sports car, and looking to see where good value is, if that matters to someone. Hopefully I have addressed some of your questions.
Good point, if this was WebMD.com I argue posts by actual physicians with experience in the subject matter will carry more weight. Not to say a layman is automatically wrong, but common sense dictates that folks close to the action, will have a certain context that those who are not will lack. Btw Sherpa congrats on your record sale last year, didn't realize that until last week!!!
It caused my insurance bill to grow markedly, and I drive the car somewhat less, i am more focused on keeping it stock and pristine. On the other hand I feel more comfortable spending $$ on a whole host of little things I always wanted to straighten but never seemed quite worth it.
Remember that this is a market, and knowing through owning a car (or even several cars) does not mean someone is in a better position to judge a market vs. someone who hasn't. Similar to home ownership. Someone can own one, two or multiple homes (and did, back in 05, 06, 07...) and not have a clue on whether the market is on anything more than hot air vs. a solid foundation. There are some people on here who have tremendous collector car market experience over the long-haul and I do give their posts particular gravity. But being a home owner doesn't qualify someone to know the home market, so why should car ownership give any additional credibility? Something to consider, no?
