Arizona observations and analysis

Randy Grubb (the builder) is quite a metalworker. His background is in glass sculpture (high-end paperweights). The car could have brought more but it's somewhat of an unknown quantity. If he keeps turning out these masterpieces (this is at least number 3, all different) they could develop their own market. He also was the principal builder of the 3-wheeled Peterbilt motorcycle built on Monster Garage. It sold for $23K at BJ and was one of the few "Monsters" that might be worth more together than recycled.

 

LMAO

 

Isn't the American Muscle car market largely one of american buyers, and not the overseas buyers who are supporting the collector/exotic car market right now?
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I would imagine you are correct. There is zero interest from Euro collectors for run of the mill muscle cars and there would be no "Euro versus Dollar" effect on the muscle car market.
There simply can't be a continuing market for over 1,000 BJ muscle cars and resto-crap year after year. This is the year where the market came to its senses regarding valuation. Next year may see no muscle car market other than truly significant and very limited production examples.

Auctions by their nature succeed because there is excess demand and bidders compete with each other to snag the limited supply item.
When the supply is seemingly inexhaustible and the quality of what is being supplied deteriorates over time, there is no rationale for an auction to sell that crap. A dutch auction would be more appropriate, where the top price starts the auction and it counts down until someone buys it. It gets its name from the daily auctions of tulips and other flowers that have their world center in Holland.

It was actually quite hilarious watching Craig Jackson beseech the crowd with his "It's way under the money folks". Only way under from his POV as his commissions got smaller, not to say anything of the BJ owned stuff that crossed the block.

Less amusing, but really troubling was having Jackson or his staff bid directly on items they were auctioning. If that is not illegal it is certainly highly unethical. BJ has become the WWF of the auction world - entertaining, but fixed nevertheless.

 

posted in another thread -

OK, so do we think that the one asset class that will hold up in this deep recession is Red Ferraris's?? while like all of us i love the marque and love the mystical history, its a bit wishful thinking.
I don't know what happened in Arizona this weekend, since 1. I was not there 2.TV helps 3. it is a non homogeneous sample from year to year.
Like most of us, i have paid allot of money for my cars, and watched my recently bought toys jump in value every year. But i have to maintain honesty and analyze with the observable data as it stands not hopes and wishes.

The factors i would say:

1. The Euro is set for a fall in the upcoming weeks/months as this weakness spreads into Europe - you have not seen a mess until you looked into European bank's. This will tend to depress prices
2. US will dry up further, stocks are set to continue to fall
3. while other assets are easily observed, I dont think collector cars are as easily analyzed. Still, you can expect a slower reaction to volatile stock prices.
4. its not clear that the new money form Asia/ CES etc.. is buying collector cars, lets not depend on this to put a floor on prices.

ok so what do i think is the likely scenario (all estimates):

A. non intrinsic-value collector cars (American cars with 1000 or more production run, European secondary cars) will deflate by 60-70 pct in the next 24 months
B. upcoming collectible (308's, 330's, 246, 330 gtc etc...) will drop by 30-40 pct
C. event cars (mille -meglia eligible, historic racers) will drop by 30 pct
D. True collectibles (one offs, limited series, cars with significant history) will drop by 30%.

When you think of the above, its simply a reversal of the past 3 years, but NOT a scenario back to 1991.

Having said that, there is a non zero likelihood of a global recession that will see all asset prices deflate by 40%, thus cars will tend to underperform.

while i know these views are hard to accept, they are mine, and if you decide to discuss i plead of you lets discuss the matter at hand...

rgds
elad

 

Not disagreeing with your assessment but isn't direct bidding by Craig better than a "shill" in the crowd?

The prices seemed off compared to last year but at this level it still pays to scour the junkyards for a rusty 6 cylinder car and build something for next years drunks.

 

I cant wait until march, then october for the next two auctions, should be very interesting. If the car market tanks right across the board ill just keep enjoying driving my boxer that didnt cost $500K when I bought it, lol. What can we expect to see at the B-J auctions? Higher exotic content? They are on the rise so Craig might not bad-mouth them since they may become his bread and butter again.

 

My videos

http://www.youtube.com/profile?user=TestShoot

 

Quite simply, no. The act of bidding by anyone employed by Barrett-Jackson is no better than a shill and it strikes me as a clear conflict of interest between prospective bidders and the facilitating auction house. To be perfectly honest, I believe it is far worse than a shill as it speaks directly to the low level of scruples BJ seem to hold as a company. If they outwardly show themselves straddling the line of impartiality to both their employees and the sellers involved with each of the 1,000 plus lots, how can they expect they would not be perpetuating the idea that other ethical concerns are able to be ignored as well, such as shill bidding by consigners, or worse yet... falsifying car history and production information. The lines of distinction between right and wrong need to be crystal clear from the get go or there will always be room for argument.
Even the public responses to situations Barrett-Jackson have faced such as the lawsuit and counter suit by David Clabuesch they have skirted clarity. BJ implied having no knowledge of pending legal action even though it was written in detail that Clabuesch was already considering the possibility on the sellers grievance form the day the sale for the ’70 Hemi ‘Cuda was short-gavelled. Now Barrett-Jackson is touting the settlement as a victory on their site (reached through mediation) and posting the "exoneration statement" by Clabuesch, yet there was a financial settlement of which terms were not disclosed. If they were looking for 100% transparency and to truly "defend our integrity" as Steve Davis (president) claimed, I would expect any financial settlement that weighed in their favor would have been mentioned as doing so, rather than just saying the terms would not be disclosed. It leaves a great deal of room to doubt the validity of the statement by Clabuesch, as it just may have been bought and paid for with that mystery settlement.
With all the controversy surrounding them at the moment, I was shocked again just this past sale to see the most simple auction act of dropping the hammer on a sold car has become an issue for them as roughly 20 seconds after the gavel struck on the 1938 Wrigley family Packard limo, the bidding opened back up as the auctioneer received a new bid and that seems a testament to the poor form BJ carries themselves with as both an auction house and business. Not a place I will ever spend any money.

 

Has Russo & Steel posted their results yet? Just curious to see if the market correction seen at Barrett-Jackson was also seen at Russo&Steele, or the other houses.
Kevin S.
Orchard Park, NY

 

I really don't see that happening at all. I think the newer models will still be depreciating, but the vintage stuff will not take a hit overall. I would bet that most vintage Ferrari owners own the cars for enjoyment and will not get in a inch with a NEED to sell. Therefore, the prices will remain stable or rise slightly. I hope you are right, because that would allow me to buy a great car in a few years, but I am not normally that lucky.

BT

 

I think you are expecting too much.

The act of having an immediate "do-over" for some of the cars if there was an apparent discrepancy with the high bid does seem to demonstate an effort to keep things above board.

An auction is a highly charged event and the yammering of the auctioneer is meant to confuse and stimulate activity.

I can't imagine spending my money there either but if these people want to be on live TV maybe this is the price.

 

High end paperweight, huh?

 

I think it was. A client of mine took six cars out there this year, sold 5 at BJ, one at R & S, he called me this morning and said it was bad at both places.

 

newgentry:
Thanks.
Kevin

 

Seems the 'commodity' cars are feeling the correction, some. Clones, too, but maybe holding up better than expected, still? The few rare musclecars present (Boss 9's, etc.) were strong - though not many one-of-ones to speak of this time around - Mecum may be the place for these? Entertaining show, tho.

 

phunny how 'way under valued' was -not- preceded by 'way over priced' in any BJ previous auctions...

 

True

 

2006 was the peak. 2007 BJ-Scottsdale was down 10% from 2006, and 2008 was down 20% from 2007...a 30+ % correction with no end yet in sight.

Also, keep in mind that the Green Mania spreading through the U.S. means that fewer corporate execs want to be seen with gas guzzlers now. All of a sudden innocuous hobbies have become a public relations liability for execs who are visible (read: high profile) to the public.

Firearms collectors saw something similar 30 years ago. Not just everyone can be seen making such hobby purchases.

I'm surprised that investigations haven't already begun.

This year the big faux pas was BJ restarting one auction some 20 seconds *after* the sold hammer had come down. Frankly, the original Buyer should have a case for the difference in price, as it was *his* car that got sold 20 seconds later (Packard??).

I could probably name another faux pas or two from previous years, as well...

 

This thread is further supported by a post I contributed recently about how, during BJ, I repeatedly saw TV
commercials by Spanky Assiter(BJ's head auctioneer) for -local- type auctions, such as real estate, etc.

Guess Spanky & Amy are readin' the tea leaves and not seeing $$$ with BJ anytime soon.