Sheehan on Prices: rising prices for the next two or three years ...

Anyone get the latest Michael Sheehan article? He makes it seem like the recent surge hasn't finished yet. Anyone else think the same?

"...All of this has helped to lift the overwhelming gloom that permeated the European economy mere months ago, although the Europeans are not yet buying in force. I predict that we are in the very early stages of another economic boom. My crystal ball sees good times and rising prices for the next two or three years, but five years out is simply too far to predict given today's geo-political climate."

 

Economic boom???

Lol

 

They smoke the good stuff on the Left Coast......

Of course "the rich will always be rich" , and there is a flight to tangibles as normal instrument vehicles sour....

 

Consider the source. Self serving? Nah... never.

Europe will shed classic cars in droves as it has economic problems -- which will last for years. Don't believe me? Look at what happened to Japan in the 90's. Unless there's a economic reason to own them, the market is getting smaller and smaller as people get older.

Forget China as the classic car savior. They do not care about classic cars. They've never had a car culture. To them, an old car is an old car. So, the market will be as always Europe and the Americas.

The market now is being driven by speculators more than enthusiasts. That means, when the speculators get bored with their "asset", they will dump them to something that will better make them some money.

Hold your cars and ride out the coming storm. Love your car, not what someone says it's worth. No matter what the price, you'll still be happy.

 

Look at his current invetory, then re-read the article.
His Dinos have had several price reductions recently.


His general points about exotics leading the market seem correct thoug. And there is something to be said for the Kirk White style of convincing the market to come up to your level with top of the market prices for good cars.


Disclaimer: I personally think M is a shyster and he still owes my company money. But I try not to let that color my opinions.

 

Where will the cars go? I don't think we're seeing a lot of stuff coming back to the US. In fact European auction results seem seem fairly strong.

 

I tend to agree with themajor.

However there seems to be a recession over here but in reality anything remotely desirable that hits the market and its gone within hours, so much for austerity!!

As i have said before people with hard earned savings in the bank worry immensly if it will be there tomorrow morning. So they buy something tangible instead. It happened in the 80's, 90's and 20's with many getting their fingers burnt, it makes you wonder if there is a bigger picture here, but i am a conspiracy theorist.

IMO i can see the current wave lasting a few more years as others have suggested.

 

Conversely...."as people get older"....younger people start to enter car buying age...as far as China....China has the GREATEST Upside!!!....as evidenced by the following article/facts.....Mark

Ferrari Reports Record Sales in U.S. and China
January 14, 2011 by John Rettie



Last year Ferrari sold 1,750 cars in the US and Canada, an increase of 20 percent over the prior year. It is certainly encouraging news as it hopefully indicates that the recession is over, at least for the wealthy.

Although the US still remains Ferrari’s primary market, it also celebrated a record year in some other countries. For example, it sold 300 cars last year in China and today Ferrari delivered its 999th car since it first began exporting there in 2004.

The keys to a Ferrari 458 Italia were handed to Johnson Zhang at a ceremony in front of the Oriental Pearl Tower where 15 other Ferraris were displayed. After Johnson Zhang symbolically turned the key of his 458 Italia, illuminating a screen with the number 999, he said: “It is a great honor for me to be here today. With this car I made a dream come true. The dream of every man. I’m glad that I can experience this very special moment for China. For me Ferrari is the symbol of success and the brand’s values are an inspiration for the upcoming goals I want to achieve.”

Ferrari is confident China will become the second largest market in the world after the US within two years. The average age of Ferrari a buyer in China is under 40 and 20 percent are women — a far higher percentage than elsewhere in the world, according to Ferrari.

 

I really don't think so! There are many "American" Ferraris offered in Germany / Europe. Have a look at auction results or proposals, I think prices for most Ferraris are even higher in Germany than in America.

 

I always try and relate these cars to what the kids think is hip.

My son, his friends, and my nephews have no desire in Dino's , boxers , or 69 camaros.

They love the new stuff, zonda's , Bugatti , sls amgs , Nissan GTRs .... They also like the lambos....today's 15 yr olds and tomorrows buyers, and the old stuff is too slow, no iPod attachments, and the a/c is not cold enough.

I just don't see this stuff going anywhere unless China, India and the newvo rich like it...once the baby boomers go in the next decade....I think a lot of iron will be hitting the market for cash.

Just my .2

 

New cars. They love new cars. They don't give a shoot about a classic Ferrari. It's just "old".

As I said, China is not the solution for overpriced classics. They don't want them like the Japanese did in the 90's.

 

And will fall faster because of it.

Here's the point. Forget what some self serving expert says are the values of your cars. They are just someone trying to push the already overheated speculative market. They have their own agenda and it ain't in the best interest of owners. It makes the risk of ownership greater and increases costs for parts and service.

What's important is that you like the car and want to drive it, not what someone says it's worth.

The day you treat your car like it was a gold coin or some shares of Apple is the day it no longer becomes fun to own.

It becomes a commodity. Is that what you want to think about when you turn the key?

This is not the first time Dino's have risen in value only to see them fall. History always repeats itself.

 

I 100% agree about the costs of parts and such preventing cars from being driven and enjoyed.

I also 100% think the criticism against Sheehan is ridiculous. Go to the 308 section and people bash him for saying prices aren't going to rise, go to the vintage section and see people bash him depending on the most recent article, but others agree with him based on the same article. He has to sell cars for owners, find cars for buyers, and make everyone happy. It is really pathetic we bash home from every angle, yet he seems to sell more cars than either you, I or just about EVERYONE on F-Chat does. You don't sell cars as a broker by consistently screwing buyers, sellers or enthusiests.

I have not Spoken to Sheehan in a couple of months, so I am not speaking from inside info. I do know I get quite a few calls EVERY month from people looking for a Dino. These aren't clients of mine, just people looking for honest advise. I have not EVER taken or received a fee from ANY buyer or seller.

ALMOST ALL OF THE PEOPLE I HEAR FROM ARE REAL PEOPLE WANTING TO BUY A CAR FOR THEMSELVES. Not INVESTORS OR SPECULATORS. I don't know how many calls are feilded by others by INVESTORS OR SPECULATORS.

There is a definite shortage of cars in the market AND there is a greater number buyers than I have seen in the last several years. It is the old Supply/Demand curve in action.

One thing I can guarantee you, is that brokers (whether Sheehan or others) sell more cars privately than they sell pubilcally.

More cars are transacting behind the scenes than I have seen in a VERY LONG TIME. This means those cars aren't even coming onto the public market. AND that isn't because they are being sold for cheap.

 

I'm not sure what demographic you're addressing specifically but I'm 31 and own a 250GTE, dino and an iso grifo. I have a few modern exotics too but have not bought a modern car in the last 5 years ex daily drivers. I have no interest in selling any of the cars i own despite recent appreciation (and offers). I also have 4-5 friends +/- 3 years of my age who own dinos, 330GTCs, astons, AC's, MGs...none of which are speculators but enthusiasts. With regards to China and also just aggregate demand we're not talking about cars that are available in the tens of thousands...most of these cars only have a few hundred examples available globally (or a few thousand in the case of the dino) so it does not take much demand to move prices higher when supply is finite.

as a side note, i wouldnt pay anywhere near the asking prices for some of these cars especially some of the dino's listed lately in the high 200s...but thats just me.

 

I'm 33 and top of my list is a 275 gtb/4. No way I can afford them at current prices and I highly doubt you're correct that once the boomers die the old cars will have a precipitous drop. I hope you're right, though, as it'll mean I could possibly get one to put next to my 355 someday.

Besides, if that were the case (as the older generations died off, the older cars got cheaper), the 20's and 30's Bugatti's, Duesenbergs, and Rolls would be cheap, but they're not.

 

Excellent points!!!....No country is garnering wealth at a greater pace than China, those with new found wealth will look to buy those commodites that has previously been unobtainable....& for some...that will be "Vintage Ferraris".....ecomonics is relatively basic...."Follow the Money"....that would be China.....Mark

 

this is the point. how many investments can you see and touch and drive, and more importantly, transfer to any thriving economy and sell in any currency you like at nearly anytime? of course vintage cars are not as liquid as paper investments, but the upside is that they are more fungible across a broader spectrum of circumstances. and in the meantime, they are fun.

sheehan talks his book. everyone does. every one of you, and i myself, do the same. he may not know that much about the world economy, but he feeds the canaries in the coal mine - ie he is a good gauge of the ww interest in vintage ferraris, and that tells him what he needs to know about ww disposable income.

frankly i think he is right. i buy very few stocks, or other traditional investment stuff. i buy participations in things i can see myself, and i buy real estate, art, and cars. can i be disappointed ? of course. but on the land, art, and cars, i rarely get a report saying that somebody screwed up and half my acreage disappeared overnight, or that one of my paintings is a fake, or that i have complete engine failure and will have to sell a car for pennies on the dollar. and many people are starting to think this way - they want to get away from the bs that the banks and investment advisors are selling, and they end up collecting valuable stuff.

 

For me prices seem quite fair compared to other investments. There are for sure always some crazy proposals and auction results with silly high pricing and I don't know even one car dealer / broker not trying to push the marked in order to achive good results - but this is quite normal I think.

It also doesn't make the risk of ownership greater!

 

Another factor to the Dino, are that Restorations are consuming the low end market. As each resto contender gets purchased and a high end renovation ensues, the pool of those in the lower price range declines forcing the average price to increase

 

Except that's NOT what happens.

What happens is a lot of junk get's refreshed for quick buck and thrown into market (usually in auctions where there's little transparency or inspections) where idiots pay way over what they are worth. Then, the next guy with a better car says "hey... if he can get that for his, what can I get for mine?"

Does anyone get suspicious when those guys on TV who are selling gold keep telling you gold prices are bound to keep rising?

Same story here. Follow the money for the root of this thread.

 

Just sold my Dino £195k.........took 12 days!

 

congratulations! well sold !

 

Yes, well done. So what's next? 3x8, Boxer, 355, 360?

 

This is a sentiment echoed more and more by individual investors and to some extend institutional investors. Classical behavioral finance. Individual investors will invest in tangible assets (hard assets), which btw is also a big theme currently with institutional investors and drive the prices up. Early investors will profit massively but quite a few will be left holding the bag when the bubble eventually bursts.

 

A private ad appeared on Pistonheads the next day for an early carb 308 GTS.......went and bought it! Fabulous car, and i could have bought almost 8 of them for what i sold the Dino for!!!!
And now i can pay for my new house with no more mortgage.......plus i have a car i dare use now.