is the bubble due to burst?

I think that you're underselling the kids. Old school stuff is attractive because it is different.
The visceral nature of old tech can't be replaced.

It always does.
IMO the Ferrari market will be driven by external influences. When and if there's less money or when there are better investments the market will "correct".

BTW Why do we only use that word for downward motion?

There will always be entry level cars. They may not be Ferraris but as long as there are car guys they will find something.

 

But Obama Care has done this to you. I too know of this, personally. Ahh, but this is for another thread and another day.......

Jack

 

2008 prices? You mean when full analog cars were available?

Lol don't hold your breath.

 

People seem to forget or overlook the fact that there have been 3 mini-crashes or market corrections between the Big crash in the early 90's and today's Bull Market.

After the crash that coincided with the 1st Iraq War, the collector market had a slow but appreciable increase through the 90's which ended with the Dot.com bubble collapse. The market had begun to stabilize and show some increases when 9/11 rocked the world and collapsed the market. That market began to climb back by 2004/05 only to drop again with the financial collapse in 2008 and has been roaring back since late 2009.

Moral to the story, it is unforeseen outside forces that will determine when this market collapses and how severe it will be. History tells us that it WILL happen.

 

as a note, we are fast approaching the birthday for this thread's first post. there will be more.

 

People have always complained about "kids these days" and they always will. I just finished reading "This Side of Paradise" (written in 1921), and the older people in that book are all complaining about how lame the young kids are these days...

 

I find the best way to avoid cranky old man mode is to spend time with my young friends and relatives. They're not half bad and it's becoming their world rapidly.
Having a cool car and a sense of humor helps too.

 

Ah but David, those cars were built in the hundreds of units, not the tens of thousands.

 

there must be more elements present than price appreciation alone for a bubble to be formed... at this time the other elements are not present... the money markets are controlled with very limited credit. Investments and collectables are not leveraged, they are fully paid for. There is no overhanging potential to liquidate to cover loses in value. Bubbles imply drastic violent drop in values fueled by the lack of buyers. Current values are driven by excess demand / large supply of buyers, until the buyers exit and become scarce, prices will remain high and under control as they fluctuate.

 

We're getting a bit crossed here. My comments were about cars of a much earlier era and their lasting allure even among today's young.

I suspect that as the "high" volume exotics cost of running outstrips the joy of ownership we'll sadly see their numbers decrease. At that point they will become "collectibles".

In a small way that's happened to GT/4s already.

 

Or a radio?

Or AC

Or sat nav?

Any yet the cars are still desirable. And the history is still desirable.

And outside events will happen. And the market will go up and down.

But you can't say you think it won't take a big tumble and then next say its going to massively correct- what does that mean except to say you think it will crash.

It could.

But I don't think it will be for demographic reasons (kids these days are only interested in their smartphones). That is an overused generalization. I think you will find that everyone's tastes change over time.

And I don't think a crash in likely. A breather? Sure. A mild correction is always possible. And subclasses are possible for larger corrections.

No one really knows so thus, the only generalization I will use when it comes to this market is: buy what you love.

 

"collectible" refers to the desirability of something and implies some "not readily available" to all...

production volumes refer to availability, while absorption refers to the interest to have / acquire.

not everyone wants the same thing, as volumes increase, the absorption falls ( the market runs out of buyers as the buyers are more interested in other things )

price points are exclusive, as a price rises buyers are excluded for the lack of resources, only leaving those with excess resources to buy...which is a self limiting quantity

the lack of buyers for the volumes available...in this case results in car values depreciating and the cars ( even exotic cars ) becoming less desirable or just another discarded used car looking for a buyer

price appreciation from collectability is not sustainable as volumes increase

 

Right you are. I should have said I'm really talking about vintage/ collectible cars. Just making a point that even modern cars are desirable by their target audience- even when they no longer might appeal to the old guard. Theres something for everyone!

 

something to think about...

has the current rise in the prices of vintage cars been the result of collecting or hoarding... there is a difference... as one is driven pleasure / joy, the other by avarice...

 

There's rarely just one motive.

 

I agree and like I said I think the demand side here is very nuanced.

 

that is a point.
i have been looking for another 512tr. so on the internet here in switzerland, i see that the 5 512tr's for sale, and about 6 of the testarossa's are all owned by the same dealer in zurich. he is hoarding for sure.

 

Not to say fickle.


There will always be a peak in the value curve as people begin to afford the dream cars of there youth and quality will abide over time. Beyond that the market is at the mercy of fashion.

 

Road trip...............

 

Any market direction will be what up-coming auctions have items sell for.

 

Keep in mind the high end collector car market is a very thinly traded market. These high end cars are now financial instruments. The whole world will be becoming wealthier in the next 30 years and there are very few high end things a guy can spend money on. Things like art and collectibles will do very well in future. What else can you buy? Things like multiple homes tend to lose functional utility over owning 3. One can easily own 2500 paintings, 10 classic cars or 250 motorcycles and still have functional utility and the items not take over your life like owning multiple homes,aircraft or boats.

 

so yellen basically announced qe 4 today. or is it QE 5? or is it 6?

 

Blog Post | Classic Cars Are Better Investments Than Art, Real Estate and Wine | Car Talk

 

As the bubble grows. it brings cars out of the woodwork in all sorts of condition ...
$200k is eyebrow raising

http://www.ferrarichat.com/forum/ferraris/472701-ferrari-246gt-dino-restore.html

 

I went to the new London Classic Car show earlier this weekend and there were four Daytona's for sale. One an immaculate early mileage minter in red on the Hexagon stand at £750K, which seemed about right to me. Joe Macari had a very nice silver low mileage left hander at £695K, which seemed sensible. Then JD Classics had a horrible left handed car, mileage not stated though they assured me it was "low" at £785K!!!! How JD could price their car so far above these other two seems a complete mystery to me but rather highlights the dealer practice of continually inflating prices pretty much irrespective of the quality on offer.

If anyone if daft enough to pay the JD price being asked I guess that is their responsibility but clearly a number of second hand car dealers display very little respect for potential purchasers when they are describing such second (third?) rate fare as: "great colour combo", "fantastic history", "desirable!" etc. etc. and asking sky high prices. This was the message I bought away from the show anyway.

All seemed a bit sad somehow.