Maybe yes, maybe no http://www.fa-mag.com/news/silicon-valley-mansions-linger-on-market-in-real-estate-slowdown-26924.html Hey, I was just passing along what Tom told me, a few years back. Your mileage may vary. PS I did sell my last Ferrari in May of 2008. But it had nothing to do with trying to predict market prices.
This is pretty stupid. Just because one's country's past was debatable doesnt mean its current citizens should just suck.it up and suffer the consequences with their mouth shut. Do you blame todays germans for the holocaust? No. Ps: sorry Rob. Just couldnt let this go.
Ok back to cars. Just looking at the line up for pebble auctions, there is a lot of ordinary stuff but some great stuff too. Given there is no yield in most parts of the world (over $13 trillion of NEGATIVE yielding government debt now) I predict that really special classic cars are going to go through the roof. There, I have said it!
Mark, I don't think most would protest this. However, there are few *truly special* cars this August that may merit that end result. Is a Pagoda really north of $250K? Even the cleanest in the world? Valuations like that make me think as the fire burns hotter, more gasoline gets thrown on before an impending KABOOM... We'll see though!
I don't know the Pagoda market but I think the ordinary stuff will continue to be soft. My point is that really special collectibles, trophy real estate etc will be bid in a world desperate for yield.
Please don't take offense to my response on your recollection of Tom's view on F prices. It is just that years in the markets have told me that generic statements to predict the future based on some correlation that may have been are very dangerous. As we all know, correlation isn't causation so events parallel in the past need not be parallel in the future. There are many factors at play and while RE may be a big confidence indicator for assets, it is still just one indicator. RE is localized and cannot escape an area if there is a crisis. Cars can, more so than ever before. The world, finance, trade and markets are very different from 1989 and so causes and correlations of the next crisis will be different.
Just checked out the results on the Barret Jackson site. They have a new format for showing final bids now. Aren't auctions supposed to be transparent to show the public what the value of something is? Wouldn't want anyone to see those low bids now would we? I guess it's better than just erasing the car from the results like I've seen some of these companies do recently. Thou shall not allow the public to see any downward momentum! Image Unavailable, Please Login
and how about now? Markets from what the talking heads are saying are at or near record highs? Ive been watching and trying to pay attention to any hype over the market since 08. To me... it always seems the market/media or evil doer insiders (all this being said tongue in cheek) take advantage or push for instability. If the market is stagnet and makes a steady small percentage... no one cares and people don't make as much money. Active traders and what I would amaturely call those in the market business know and they use the volatility to buy and short and whatever. They would rather the market go from 17k to 18k all year round then average 17500 all year round.
I get your point. But no sales are not the end all be all when it comes to proving if a market is in a downward trend. Sales that are lower than previous on like items are. If someone had a 512bb consigned to an auction for 800k and the car no sale'd and the info wasn't made public. It wouldn't be an indication of a downward trend. it would be a seller with too high of expectations and a auction house either buying there kool aide or filling slots for an auction. The unknown is exactly that. Unknown. Drawing conclusions from things that are not known is well... not smart. There are many many many factors that go into these auctions and pricing and no sales.
Not at all. Plus, Tom is based in Southern California, which I'm guessing is heavily influenced by real estate.
Hmm, that somewhat cynical connotation is of course not what I meant when using that word... Market developments are never the result of only one aspect. The myriad of aspects that influences them is different every time, and the relative strength is too. That also determines what is a bubble and what is real, and if a development is a bubble, how it will unwind. As much as I have shown to hate to use just one aspect, one is imho currently particularly at play, and that is market anticipation on a dollar rise (and/or euro downfall). I suspect because of that Ferrari prices will in dollar terms be quite soft for some time to come. That said, a bond market turn can just as easily thread water into that statement. It is never just one thing.
There was a recession at the end of the last big sports car bubble in 89. It was no financial meltdown or crisis. And there need not be one this time either. Why? because these prices that have been created out of thin air by speculators are unsustainable as well as a crack-pipe fantasy
Actually there were some "small events" going on in Russia around 1989/1990... Preceding that, the 87 crash made people aware of the dangers of the stock market (if you look at the Dow graphs it is just a glitch...). That combined with other market factors, notably an increase in inflation fears, falling US dollar, unscrupulous dealers talking the market up as well as rumored fake ads in papers and magazines and lots of money coming out of Japan led to herd behavior, a big frenzy. I just don't see that today.
Bradwilliams has been saying the sky is falling for five long years now he gets some sort of high hoping the market crashes on vintage Ferrari owners. Not sure why...can you say schadenfreude? Eventually the economy will go down/crash. That's normal economic cycles..and the beauty of being a Permabear - eventually you can tell everybody "I told you so" Just glad be glad you didn't take his advice for the last 5 years, I see the Dow and S&P hit new record highs today?
So I always think the sky is falling. And I have called bull**** on Porsche Prices since the run up... However the argument of there does not need to be a financial meltdown crisis for the car market to crash isn't a "great" argument. Its too ambiguous and that logic would dictate that a crash is always looming. I agree that speculators have pushed pricing to ridiculous levels, and we have seen evidence of bull**** artists trying to capitalize on the 6 speed market 550 market etc... One thing that can not be denied is that much of this stuff was undervalued. 550s were undervalued. Many porsches were. SOME 6 speeds were. Some people go wrapped up in it... but they always do. My favorite is that the people who thought there 430 was worth 250k because it was a 6 speed and wouldn't sellit for 300k are never going to sell it for 300k... or 250k... or 200k. Everyone gets so proud of there stuff in the run up they forget to sell at the top. They enjoy the view too much. Now if you were never going to sell... then great! Enjoy your car like a car is supposed to be enjoyed! Have fun and wish you the best. I don't forsee a crash... I think a correction is going to happen... but not a crash... unless world financial markets crash of course. People will just hang on to there things this time around. Those that have these cars are not as leveraged as before and will be able to whether the storm this time around. The previous wounds for most haven't healed.
I do agree the top 1% best of the best in terms of cars will continue to widen the gap in terms of prices from the other 99% but disagree strongly in terms of trophy real estate it is quite weak peaked 2 years ago and no sign of a floor yet
Real estate yields, investment cars don't. Still great if you are buying just to enjoy, but if it's for financial gain, you need capital appreciation, as there's no 'income'. in fact, when capital appreciation moves off the table, as in today's market, all you have is negative yield - cost to keep, maintain etc. Those are the kinds of assets that are generally hit worst in a downturn, and i expect this market to follow suit.
All very true. There is no income. However, I will disagree with your last statement. I have several clients who owns lots of commercial real estate. They will litterly say... not another building. I have enough problems. You can't look at these cars as vessels for cash flow. Everyone buying one knows that. The "market" considers that before they even look at a car or car ad. Those looking for cash flow never would have parted with their money to begin with and entered this market. So I don't see much of an exit. These are easy things to own. Sure there is maintenance and storage... but many already have the storage and maintenance really isn't that bad. And some of the trophey cars are just started and never driven and they will be sold that way (yes that is unfortunate)
As owner for many years of a driver 330 GT (with patina), the only thing a change in the market does is change my insurance bill! Cheers Warren
Tell me who is your insurer. For me, whether prices of cars go up or down,,,insurance always go up...
Agreed. Check out my thoughts from our blog (below) on the current market, I also believe that the overall Bullish market has attracted a new breed of collector. I would NOT call them speculators, either, but astute individuals looking to diversify assets. The Bull in a China Shop | CURATED
