Dino Market Values : Real and Nominal

Bill,

I agree 100%.

Every month, rather opening a statement from by brokerage house, I'm opening a statement with charges from Superformance, Dinoparts, Reoriginals, Mccann, Rutlands and the likes. Now that’s "Priceless" (I’m still in the restoration stage)
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You guys are making the wrong comparisons...

Lets compare apples to apples...

In 1972-1975 you took 5 vacations, golfed, bought a horse, whatever...etc totalling $20,000. 30 years later its worth 0$.
In 1972 you bought a dino. 30 years later, its worth $150,000.

Which is better?

Of course the best version is:

5 years ago you bought a dino for $40,000. Now its worth $150,000 ...

 

I think you have it essentially correct. How do you want to spend your (presumably) disposable income, e.g. trips, vacation homes, golf, boats, horses, etc. These are all great ways to enjoy your life. Driving a Dino is one more great way to enjoy your life! However, even if you were lucky enough to get that Dino for $40k five years ago, and it is worth $150k now, you likely have more than that initial $40k in it. Even if you did minimal to the car, it is amazing how $2k-$10k can easily "disappears" per year. You need to add up all the costs, not consider just the initial purchase price if you want to talk about appreciation. That was my only point.

RB

 

Those $50k Dinos a few years back typically came with a bit of deferred maintenance and hidden tinworm.

It's sure a lot easier to justify spending the bucks on a $150k car vs a $50k car.

 

5 years ago, $40k wouldn't have bought much in the dino world

 

http://www.rmauctions.com/CarDetails.cfm?CarID=r168&SaleCode=AZ08

http://www.russoandsteele.com/collector_car/1967_jaguar_xke_ots_roadster/7526.html

The top of the E-type market are late Series I OTS with fresh restoration. A car which has received high scores at a JCNA event solidifies the value. Trophy winning FHC cars have yet to clear $85K.

 

one reason for pricing increases is there are the same number of cars around, but there are more people interested/capable of buying them. the "one day i will own one" guys are starting to buy. a simple thory of mine, guys want what they wanted in high school. even though it's old, its what they want. the trend will be interesting to see as the late 70's cars roll around. there is very little that is desireable, but then again, most "muscle" cars weren't that desireable four years ago

 

I'm not sure this premise is true.

Imagine when the well-to-do Chinese decide they want to collect old occidental stuff!

 

I was watching an auction that included Reggie Jackson's muscle cars on ESPN2 the other day, and it seemed like a lot of really great cars were BOMBING - selling at 50% of recent prices, and his cars were really nicely kept. Meanwhile, a Dino sold at about $200k in spirited bidding. Really interesting. I mean the muscle cars were TANKING.

 

That was a rerun of an old auction, I guess. Should have known!

 

in the recent Christies auction in UK 2/06 "73% of contemporary art failed to achieve mid-estimate prices...the equivalent sales at Sotheby's and Phillips de Pury on 2/27 and 2/28 saw 61 % and 53 % of lots, respectively, unable to attract mid- estimate bidding" There are some on this site that have unique insight into the art auction world...chime in!!

 

Some of the FCHATTERS here may have a higher interest level in economics than you might have expected.

The data chart shown in the specific posting (claimed mileage/age) indicates that R SQUARED (I can't seem to get superscripts to work here) = -0.4585. R SQUARED cannot have a minus sign. A typo error?

As you know, almost all areas of economic endeavor present problems of transaction/information costs and asymmetry. Two specific examples of interest came to me after reading your posts. The first regards the way De Beers used to sell and allocate diamonds. Potential buyers were given a bag and a limited time to inspect the contents and decide whether to make a purchase.

The matter was addressed by a professor of mine, Yoram Barzel, when I was in school. The following summary of one of Prof. Barzel's papers was clipped from a footnote to a paper, "How Community Institutions Create Economic Advantage: Jewish Diamond Merchants in New York," prepared by Barak D. Richman, Duke University School of Law, for The American Law & Economics Assoication Annual Meetings, 2005:

fn. 27 To be sure, the diamond industry is already the beneficiary of several valuable economic examinations,
but previous scholarship placed its emphasis elsewhere. The early works focused on De Beers’ restrictive
sales policy, which bundles many heterogeneous diamonds together and charges the approximate average
price. Yoram Barzel first explained that this unusual practice prevented buyers from engaging in costly
efforts to examine and appraise individual diamonds before their making a purchase, thus permitting De
Beers to recoup some of those savings by charging a higher price. Yoram Barzel, “Some Fallacies in the
Interpretation of Information Costs” 20 J. L. & Econ. 291, 304-05 (October 1977) (“Had the contents of a
particular bag been available for appraisal by all buyers, each probably would have spent resources to
determine the properties of the diamonds. … The incentive for De Beers to engage in this peculiar form of
trade seems to be that buyers are now in a position to spend on the actual purchase of the diamonds the
amount they otherwise might have spent on collecting information.” see also Yoram Barzel,
“Measurement Cost and the Organization of Markets” 25 J. L. Econ. 27, 32 (April 1982) (“A consumer
who is convinced that he received a random selection from an optimally measured commodity will not use
additional resources for measuring. … De Beers’s diamond ‘sights’ seem a case in point.&#8221. Roy Kenney
and Benjamin Klein articulated a similar argument in their famous paper examining of “block booking,”
Roy W. Kenney & Benjamin Klein, “The Economics of Block Booking” 26 J. L. & Econ. 497 (October
1983).

If I remember correctly, De Beers (although not publicly discussing it) would allow a buyer to return a bag, or receive an offset on a future purchase, if the bag's contents proved to fall below the average expectation.

The second concerns a story about the "field" market for jade. At one of the graduate student lunch seminars that I regularly attended, Profs. Barzel and Steven N.S. Cheung discussed a situation in the jade market that in some ways is even more obscure - according to Prof. Cheung, in some jade mining areas, rocks (nodules?) were mined and presented to potential buyers/traders with NO or very limited knowledge by any of the parties as to the quality or the amount of jade inside. The question was how the market for jade thrived in an environment of such apparent mutual uncertainty. To me, this would have been like De Beers trying to sell a bucketloader full of dirt from one of its diamond mines without anyone having a guess as to the actual contents.

Other than mentioning jade in a passing footnote in his article, "The Fable of the Bees: An Economic Investigation," Journal of Law and Economics, Vol. 16, Issue 1, pp. 11-33 (1973) (Cheung, Steven N S) [a great and interesting article, BTW], I don't think Professor Cheung ever published anything specifically on the market for freshly mined jade, and thus, this matter is unfortunately now limited to an "oral tradition." I would have thought that under such circumstances that vertical integration at the early stages would have eliminated the "field" market for jade, but what do I know?

I have PM'd you separately.

 

Bought my 1966 Shelby in 1994 for $15,000.
Today it is worth $120,000.

 

Anyone have any new hard data to continue this useful thread? Thx

 

Except for the greatest equation ever: e^(i*pi) = -1.

 

I'm just a dumb Mechanic. Could I impose and ask for a further explanation of the equation above ?

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Sure. It's known as Euler's Identity:

It's based on the concept of complex numbers, which have a real and imaginary part. They can be expressed in the form a + bi, where a and b are real numbers, and i is the to x^2 = −1. (ie: i squared = minus 1).

The first person who discovered that the product of these crazy numbers (e, i, pi) equalled exactly -1 must had quite a surprise.

 

Sheehan has one of Jon Gunderson's Chairs and Flares cars for sale at just under half a mill USD

 

Apparently not.

 

Thank you.

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And in typical Mr Sheehan vernacular it "is priced at $xxxxxxx"

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I, much like you have not been following the Dino market.

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