is the bubble due to burst?

Inverted yield curve simply means yields are higher for shorter maturities, doesn't have to imply a negative return, just a lower return. e.g. 1 year yield 5%, 2 year yield 4% etc

 

Last time I checked, your zero coupon bonds didn't cost you anything to hold!

 

Mmmmmm, amongst most of us I think Bira is the one to explain and forcast anything relating to invests and money! I learned a lot from him.....BTW best advice was doing nothing in most cases.

Ciao
Oscar

 

inverted yield applies only to financial contacts that have a known beginning and known end... demonstrating public sentiment as to where the investing public is placing their money with respect to past historical behavior... buying a car is an open end experience without any terms relating to price and ownership during ownership, one can gaze into a crystal ball and make guesses as one pleases as to what a car market may or may not do in the future, making the metric of inverted yield as applied to cars, nonsense

 

Completely agree you can only know yield to maturity on a car once you have bought, taken into account all costs and sold. I wasn't applying an inverted yield curve to a car - agree it's not relevant I was just responding to the comment that an inverted yield curve implied a negative yield.

Anyway back on topic - I was pleased to see the Scottsdale auctions have mixed results. Good cars being sold for fair prices, driver quality cars being sold at a discount and crappy cars or cars with unrealistic reserves not selling. It's all indicative of a healthy market, the hype around the pebble beach auctions has receded and it looks like cars will go sideways or maybe even cool a little further. I'm not seeing a bubble - just a market that seems quite rational.

 

Well said, a rational market. Not sure why everybody thinks the market need stop either be a bubble, or is going to the moon. Not sure why people can't accept we have a rational market. Just because every car does not go up a every auction does not mean the bottom needs to fall out.

 

Agreed!

 

poetic
amen

 

Bubbles are usually marked by a flood of the bubbly item hitting the market once the prices have risen enough. Not sure about the broader market, but it seems like the volume of Ferraris at auctions has been fairly stable throughout the price rise, so this would seem to suggest a rational market.

 

What goes up must come down… At what point will the investor owners start off loading to take their profit? There will come a time. There always comes a time. Will it be a hard or soft landing? Who knows… but when will the herd lose it's nerve, take the money and wait for the next dip.

 

Agree the time always comes, but the herd is not buying 288s, or 4 cams, or tdfs, or swbs. The "herd", if there even is such a thing in the Ferrari market, is buying the lower priced cars. What do I mean by lower priced? I don't know but say cars that are under say $1m. The multi million dollar cars are in such strong hands now, the multi millionaires, the billionaires. Just like the 2008 crisis didn't really impact the high end, the next crisis probably will not either. However the $800k Daytonas, $500k dinos, $300k fiberglass 308s may take a beating, but I don't foresee any fire sales of SWB California spiders. The rare owner of that car that wants to sell, can do so with a quiet call to his richest friend. I think the market is permanently bifurcated into real investment grade vehicles and everything else. What is the list of the truly investment grade cars? I'm not going there, but anyone brave is welcome to start a new thread.

For real fans of the marque like me and many others on this forum, who grew up pressing their nose against the showroom glass starting in awe at these beautiful machines, who dreamed of nothing more than driving one, let alone one day owning one, it is a shame that the cars have gone up so much. I drive all my cars as much as I can. I wish they were just used cars that we could all enjoy and be left alone and not see headlines on CNBC about how classic cars are the "best performing asset class". The truth is that whether we like or not the market has changed for ever and I don't think we will EVER see an affordable cal spider or swb or ..(add your favourite car) again.

 

Well said. These are incredible cars.

I also dispute the notion that values which go up MUST come down. Not always.

 

there is a significant difference between market valuation ( what is presently being paid ) and a bubble... there are more elements to a bubble than price alone, NONE of which are currently present in the f car collector market... those parroting the concept of bubble are showing they are naïve and myopic in that they are overlooking the other elements that must be present for a bubble condition to exist and relying only on price. Frothy prices do not constitute a bubble.

 

Great post. There are very good collections out there where the lower end cars you mentioned are a part off for a reason. They are bought to make a well rounded collection. I think the Daytonas, Dinos and Boxers are still under priced relative to other vintage Ferraris and will not be susceptible if there is a down turn as your 10K worth of TR's and 308's.

Geno

 

I think it fits to this thread: Multi-Record-Smashing Mecum Auction in Kissimmee ... 10-Day Auction Approaching $70 Million in Sales: Anamera

 

I very much agree the bigger speculation/weaker hands are actually in the cars priced under $1million. I get asked often from non car friends is there a bubble after they read a headline of a $10mln, $20mln or $30mln ferrari that has just sold. They look at me a bit confused when I say I worry more about the dentist that just bought a $250k porsche from the 80's or the $500 k modern ford gt, etc, etc...

 

I remember being 17 yrs old, senior license freshly in hand, and we wld drive to wide world of cars after hours just to stare at the Ferraris - exactly as roma said, nose to the glass. ive only cried a handful of times as an adult, and 2 of those times were Ferrari related...when I took delivery of my first f car, my beloved 95 f355 when I was 27 and then when I took delivery of my f40 6 yrs later.

people buying f40s today are a much different demographic than when I bought mine - and I totally agree with a bifurcated market going forward.

 

Great story. I never cried until I got the cars home. Looking at them in the garage, I still have a hard time believing its real and its not just tears- its chills too.

I did the same thing- going to the dealers- but it kind of just showed me I had a distance to go and I kind of put it out of my mind until I felt I was ready. I guess everyone reacts differently.

 

You guys are very much it touch with your feminine side...

I've teared up plenty too!

Geno

 

I receive 'Trovit' email updates for various cars including Ferrari. Interesting to note the large (huge?) increase in volume of F-cars available coming thru these emails. Granted, most cars are 360, 599, 612.."later cars"...usual numbers 150-250, upward trending with today over 670 cars listed.

Jack

 

2 things have killed the Domestic Ferrari market:

1. Huge taxes. I think an F12 is something like e15,000 per year
2. Harassment from law enforcement. You will get stopped continuously and you literally need to carry you tax returns around with you.

 

Over a long term investment horizon, real assets do not come down in price due to deflation. This statement "what goes up must come down" will not apply to Enzo era cars which are today extremely rare pieces of art over a 20 to 30 year investment horizon.

 

Well said. Though a 308 is still a special car and not much more in price than a nice American Muscle car, of which they would have made hundreds of thousands and are easy to forge.

 

Oh c'mon that's nonsense. The market for muscle cars is just as discriminating as every other category. There were only ~1K Hemi roadrunners in 68 and every one is scrupulously documented. A 383 Plymouth is just a used car and priced accordingly.


Sent from my iPhone using Tapatalk

 

Not really. Take a Chevelle for example. SS cars were made in the tens of thousands. Total Chevelles in the six figures. Top examples can range from $60-130k depending on engine type. It is much easier to be fooled if you don't know these cars backwards and forwards and they are forged quite often. Yes, I realize some engines are more rare than others, but just an upgraded engine and trim package on an otherwise everyday car. A 308 is a 308 more or less. Yes you need to do your homework in both cases and yes I like American muscle cars, but few are rare cars that aren't upgraded versions of base models.