Any books on the late 1980's exotic car market bubble?

I was in College in the late 1980's and was fascinated by the exotic car market bubble, particularly Ferrari. I followed this religiously. I still have all the Ferrari Market Letters and DuPont Registry's from back then. I have yet to find, or hear of, any books published on the speculative boom and inevitable bust of the exotic/collector car market.

Has anyone heard of any books written on this?

Joe

 

Hi - I don't know of any books about the late 80s market crash, but having lived through it, I offer the following.

I was looking to buy a Boxer in the late 80s (wound up with a GTC, but that is another story).

My searches went like this - I find specific Boxer X that I am interested in offered by dealer A for $70K. Call dealer A and am told Boxer X is sold, but a less desirable Boxer (Y) is available for $73K. I keep looking and discover Boxer X (the very same car) is now being offered by dealer B for $75K.

This happenbed over and over. Boxer prices went from $70K to $100K. Cares were being switched from dealer to dealer with ever higher asking prices to create the impression that the real market prices were increasing fast.

The problem is that cars were not being bought by people that wanted to hold on to them - end users. Instead, end users were selling their cars into the market at the inflated prices.

Soon, no real buyers were buying and the market was saturated with over-priced cars. BOOM - the market collapses.

 

I lived through it and particpated in it as well. For a year or two I was car rich! Then poof, not so much

I feel like I could write a book about it.

 

Not specific to the market of the time, but "Call Me Charlie: the autobiography of Lord Brocket" covers some of the issues of the day.

Robert

 

I don't think so, but if you have access to complete collections of the best car magazines of the 70's, 80's and 90's, thats the best record of what happened, and there is a lot to read in between the lines.

 

In the UK, the Sunday Times classifieds was the place to advertise. Dealer would advertise new 911 Turbo's every week, in a variety of colours for ever increasing prices, telling prospective buyers who called that they were sold. After months they would advertise a real car for a huge price and sell it immediately. Until it all went pear shaped of course. Plenty of "dealers" lost everything.

 

"The reason for the collapse is simple," says Michael Sheenan. "Prices went too high. In 1985, everyone involved in the collectible-car market was an enthusiast. In 1989, they were all speculators. There are only so many enthusiasts who can afford $1 million for a car. The market finally ran out of end-users "

Road & Track, 02/94

 

All I know about the '87 stock market crash is that I was suddenly able to afford the rent on a brand new condo conversion in Hoboken, CHEAP!

 

Always liked this 2001 interview with Michael Lavers of who was there before and after .............

Makes a good read when you find yourself think maybe £800,000 Daytona's are quite sensible.
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Because we have opened this particular Pandora's box, anybody car to discuss the impact the Japanese had on Ferraris during the late '80s? I was involved in real estate on the west coast in the late '80 and saw Asians buying everything in sight. If memory serves me well, which it probably doesn't, I believe this is when Sony tried to buy Pebble Beach. From what I heard, a lot of the buying spree for Ferraris was fueled by a few Japanese collectors. Is that your recollection?

 

Yes, and there are lots of popular culture references of the moment, Sean Connery and Wesley Snipes in Rising Sun, the Natkatomi Corporation in Die Hard, everything was Japanese for a while and then suddenly Japan was in permanent recession for two decades.

 

I would love to learn more on the topic. Economics is a passion of mine, and the dynamics of market bubbles fascinate me.

However, realistically, nobody will likely make any money writing a book on this very specific and narrow topic. But it is certainly an excellent subject for a PhD thesis.

If anyone writes a paper on it, I would love to read it.


- Sam in Saratoga

 

I bought my 1989 328 GTS from the original owner in 1994. It had 900 miles on it. I think the window sticker was around $85,000. I paid less than that.

The original owner paid $140,000 for the car at the peak of the mania. The car came with the copy of the cashier's check. He told me he had bought three of them. (I don't know what he paid for the others.) He told me he flipped a Testarossa before he even got it. The way he described it dealers were calling him like stockbrokers as cars came up. It all sounded insane. He wasn't a dealer, just a Texas real estate guy turned Ferrari speculator.

I was just thrilled someone bought one for me in '89 and put it away for me until I was ready and able. Because I did not like the replacement at all.

 

Back in the Eighties, I had a shop specializing in the odd cars most people didn't like working on as Honda's were way easier.
Did Ferraris, Maseratis, Jags, Porsches, and every other odd ball car- Citroen Maseratis! By 1986 or so I was doing work for a dealer in Portland,
Oregon that hustled quite a few Ferraris. Backed by a retired car dealer, who sold several multimillion dollar dealerships, this dealer started buying up EVERY Ferrari Daytona Spyder he could get His logic was that there were only somewhere north of a hundred real spiders produced, and MOST are never available for sale. So if he was to buy every one he could get his hands on, he would be able to control the market. He did the same with the Maserati Ghibli Spiders. So I was DATING his secretary, who was responsible for placing ads for these cars in Autoweek. He'd list one for a month, at the beginning for 190K.
After a month he'd have her place and ad saying SOLD, and then list the next one at 290K. Rinse and repeat.Raise the price in 100K increments Didn't actually sell one, until the world realized these cars were JUMPING in value. I think he got around a half million for the first one he actually sold, and before it was over, they had reached a million. He bought and sold about seven or eight of them, which is pretty close to ten percent of the cars made. He did the same with the 330GTS's. He had SO many Ferraris, he was hunting for people to store them. I had a 1963 SWB California Spider AND a Daytona in a warehouse I owned, for a half year or more. At times I had a couple of million dollars of Ferraris in my shop.

So the Wall Street Journal did an article on Daytonas, as well as Autoweek. When you READ about it in the journals, you've MISSED the boat. These are the investors that lost their shirts, the johnny come latelys. IT was a heady time. He flew me down to Los Angeles to go look at Ferraris in his private jet. For a car guy, it just didn't get better than this. He WAS really a smart guy, but alas- kind of crooked. He DID manipulate the Daytona prices. There were other players involved like Mike Sheehan, but I'd bet the dealer in Portland ORegon did more to create the surge in Daytona prices than anyone. PLUS the 330's, Lusso's, 250's etc.
For me it was almost embarassing to work on SOME of the cars he found out in berry bushes. They'd get detailed to within an inch of there lives, but underneath, they needed FULL restorations. I pitied the suckers in 1989 buying these roaches. BUT the early cars were stunningly nice.

So because I went through the 1988 to 1990 cycle, the one that occurred two years ago, I saw it coming. Started buying them BEFORE the market got heated. But unfortunately just like in 1988, one has to learn- DON'T fall in love with your inventory. The bubble burst, and I kept them all. oh well. I love my cars.
The 250 GT California Spider I had in my warehouse, the one I DROVE regularly on Sunday mornings around a lake nearby, he sold for an incredible 670K.!
Jump forward thirty years and they're at 15 to 20 million!

 

I wonder what spark, or multiple sparks started the bubble? Yes, the Japanese and the other Asian Tigers had a lot of dough to spend in the late '80s. Yes, Enzo died in 1988. Yes, a lot of potential buyers who lusted after the cars in the '50s and '60s now had some money. Yes, California real estate prices were going through the roof. What do you think started it? Was it just a perfect storm?

 

The market was already at a fever pitch before Enzo died. Instead of going back to 1986 and 1987- what caused the rapid increase in values just
four years ago? Eerily similar to the 1987 runup. When rusty old Porsche 911's from the 60's and 70's are worth 50K unrestored, or unloved Ferrari Testarossa's
suddenly are selling for TWICE what they were six months earlier. Seemed the fever died down sooner, without cars jumping in value five hundred percent.
But still it happened. Look at Bitcoins! Something that isn't real doesn't seem to slow peoples enthusiasm down when they hit 19K in December. At least with a Ferrari, you have a real beautiful auto, that is truly a limited production item.

I think we just have the herd mentality, that caused the runup in 1988. The real car guys had the market to themselves and were investing in the thing they loved. Then the rest of the world found out cars were an appreciating asset and they climbed on board, messing it up for us car guys who had their secret little world invaded. In the 1990's the car world was back in the hands of the enthusiasts, as the monied investors had gotten burned climbing in at the peak. Now it didn't hurt that guys like the dealer in Portland Oregon, did their very best to add to the hype and hysteria, by advertising cars selling at ever increasing prices over a period of a year in Autoweek. What's the saying- there's a sucker born every minute. So yes it WAS the perfect storm, but carefully manipulated, by some shrewd dealers.

 

Thanks

 

I can't say that I'm RIGHT about the 1987-1988 surge. It's just my observations, from being in the thick of it. I could completely
be off the mark. But all of the bubbles seem to be the same, just the commodity changes. I'm DUMBFOUNDED over the bitcoin
surge. I think these people are NUTS! I understand lusting after cars. Whether they appreciate or not, it's a JOY to have them to drive.
They're frankly really affordable art, when you compare it to paintings that are just so incredibly overhyped, and make the prices of Ferraris, or other
collectible cars seem positively cheap. Forty-Fifty million dollars for a PAINTING, or a car that can put a grin on your face?? No contest.

 

I think October 19, 1987 had a lot to do with it.

Joe

 

If the price if anything doesn't make sense--wait it out. Many others maybe decide they agree. Current 3 pedal car prices such as the 355--I can't fathom.

 

It's all here for you in the notorious "Bubble Thread" in the Vintage Section. Lots of opinions, history, and experiences related. Comparisons to other markets and investments. A long read!

https://www.ferrarichat.com/forum/threads/is-the-bubble-due-to-burst.395802/

 

Thanks to everyone who participated in this thread. Didn't find a book, but I got a lot of insight.

I love F-Chat!

 

I think this chart that someone posted about the current stock market can apply to any asset bubble.

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I'm sitting on the sidelines waiting for the Ferrari market to settle back down to reality with regards to F430 and earlier cars -- and then will decide whether or not it's worth the $$$ and effort. In the meantime, there are so many new cars being introduced that can be enjoyed for far better prices -- and which offer much better performance / technology. $130k TR's and $70k 308's -- with services, aging engines, etc. -- I'll pass. Should've hung on to my TR and 308 QV that I only paid $49k and $29k respectively back in early 2000's. Even the 348 / F355 prices are crazy, especially considering the engine-out services and performance level. I paid $70k for an F355 GTB stick (actually traded the TR and 308) in '05 -- sticky interior and all -- and thought that was even a bit high (Ferrari dealership). Later on, I traded it for a new Maserati CC Coupe -- boy was that a mistake!

Knowing all the idiosyncrasies and "what can go wrong" that go along with those models, it's hard to fathom getting back into one of them considering the current market. Even entertained the idea of a 360 / F430, but still can't justify it. Perhaps, in reality, that ship has sailed. Maybe a 456 / 612 would be a better choice now. Honestly (and this is coming from a passionate Ferrari fan / former owner), I'd rather spend the $$$ on a either a new Camaro ZL1 or a Mustang GT 350 / GT 500 and not bother about the service costs, parts, etc. . Thought about the mid-engine Corvette C8 (if they actually build it), but already have a C7 Stingray so don't need two 'Vettes. Guess I'm just getting older and don't have the time nor patience anymore to deal with aggravating ownership. Grandkids probably have a lot to do with that! Sorry if a bit off-topic...just my two cents about the "current" market.

 

I do have stacks of magazines and many 'specials', example "road and track". Anyone remember Tower Report? I was very active during that era, attended many car shows and auctions. It was a kick the first time around. No one had ever seen valuations like that for a 'car'. My passion for cars outweighs my passion for $$, so like the last time I have a boatload of cars whether up or down in valuation, no matter.