All fair and balanced points you make here. My add is that stocks, art, real estate, vintage cars are materially inflated by the massive currency war going on. Virtually 0% interest in accounts is a sign of major problems. There is way too total credit market debt and the reason the Fed won't/can't raise rates is because all the asset values would come crashing down (hurting the banks which the Fed protects first). They have been jaw boning for over a year that they will raise rates. Won't happen. Interest on govt debt would go way up and bank assets would have major write downs. The wealthy are benefiting from the money printing because the rich own 85% of the stocks and bonds. Bonds are the biggest bubble of them all. It's just not sustainable. My costs (apartment maintenance, food and other basic items) go up an average of 4% per year (compounded). This excludes healthcare and education, which are way higher (both of which are controlled or heavily influenced by the state through massive regulation). Certain markets are deflating (electronics - free market dynamics and productivity), but the central banks are pumping like made to try to fight debt-induced asset deflation). They should let true free markets set the rates, but that won't happen because we (through Wilson) gave them monopoly power in 1913 and the dollar has been clobbered since then. Note that a $20 gold coin from 1900 buys the same goods (one nice suit for example) today that it did in 1900. It's an interesting time to say the least. I prefer to measure "real" value using barrels of oil or oz of gold as opposed to $US. I bet my Ferrari doesn't increase much over the long term when measured in oil, gold or silver. Buying a Ferrari now is still likely a good decision in that you are getting out of the $US. If you think they will raise rates for the long term, then the dollar could strengthen and the cars nominal value will decrease (real value doesn't change). I don't think they can raise rates for a long time. In fact, more QE is on the way given weak employment and stagnant wages, so the nominal value of the Ferraris will keep increasing. The crack addicts (banks and markets) will continue to get their drugs from the dealers (central banks).
All true. The best part is that the same guy owned all of those cars in that block of the sale. A true hero to the rest of us supercar owners. I won't speculate on why he sold but I wouldn't be surprised if he's lived an awesome life, driven his cars to the max, and now wants to retire to his mega yacht or something. Either way, I love the miles on the cars. When I'm 80 I think my F40 will probably be about 75k miles and I will have loved every minute of it.
good post! I agree with 95 percent of ur thought. I differ on your conclusion. hard assets will continue to appreciate because of the circumstances you eloquently articulated. I do think stocks will continue to get tired and go down but I view stocks and real assets as 2 separate and exclusive trades. rich people arent buying stocks - companies have been buying back stocks. ferraris and art - that's def rich people fueling it.
Anybody see the Lusso and 250 PF Cab prices at RM today? I wish RM would tweet all the results as they go. Thanks,
Also want to add that the relatively neutral prices today are likely net positive compared to several previous (but recent) notable auctions given the USD appreciation.
Mostly true but on the weekend of the amelia island sale, the dollar was at 1.05 per euro. It's at 1.11 now and was as high as 1.14 this week. Not a big deal but worth noting. I can't be sure but I think it was $1.15:1 euro in Scottsdale and $1.08:1 euro at retromobile.
Certainly small- but notable nonetheless as one of several drivers, especially as you scale up hammer price. Let's connect in Monterey!
Villa Erba high bids ? SWB Comp. - EUR 9.100 M ? California - EUR 10.250 M ? 195 Inter Ghia - EUR ???
Bonhams at Spa 430 Scuderia (s/n 169790) - EUR 143750 308 GTB (vetroresina 19699) - EUR 253000 (!) 365 GTB/4 Daytona (plexi 13315) - EUR 667000 Prices include commission.
195 was sold at 6m hammer. The swb with all the stories should have sold all day long at that price as should have the comparatively undesirable open headlight cal spider.
Thank you. I was referring to the unsold 195 Inter Ghia Berlinetta, not the 212 Export Touring Barchetta
Definitely. I think that I will be there for longer than usual this year as one of our clients is announcing their multi-year partnership with us either during the week or weekend.
Here is the thing. Most consumption goods, not just electronics, are much lower in price. Lifestyle cost "deflation" is very real. It is just masked by expectations. You can compare the basket of consumption goods the typical family consumed in 19xx with today and you get a lot more consumption per dollar of income. The CPI baskets are adjusted but what you truly get is very different over time. Even hard assets, outside the speculative bubbles, have inflated very little over time (per year). House prices have not risen very fast overall -- outside some very specific markets. QE and rates and impact on dollar are all going to unwind (and have been unwinding) and the USD will hold up very well. Why? Because of the other alternative currencies. In the end, there will be many views and theories. The system is highly complex but fundamentally what won't hold is when certain markets trade on speculation of higher prices vs. fundamentals. Money is not rationally flowing into hard assets because of views on fiat currency. Majority of people buying the cars have no clue how world financial markets work and -- furthermore -- if that was the cause the prices would have spiked years ago. All signs are pointing to the simple explanation that the marginal buyers are riding a speculative wave. It will fail at some point but hard to call -- maybe in 12-18 months from now? I don't like attaching false rationality to irrational behavior. The pricing and buying/selling behavior today only makes sense when viewed as part of a speculative bubble.
Think this all depends on what Ferrari's management does from this point forward. If they follow too deeply down the road of increased efficiency at the expense of passion, then I'm not personally too worried about the value of today's NA Ferrari's in the future. The CGT was a perfect example of too many cars sold into the market too fast. Hell, the dealer I bought mine from had 2 Black Basalt examples in the showroom (!!!) I had my pick, got my asking price, loved the car, and saw the value depreciate over 25% very quickly (below the already discounted price I paid), and waited 9 years for the value to start to ramp back up. The reason IMHO was desire (of the nostalgic kind), for a car of this caliper without so many driving aids. This wild goose chase for greater efficiency and less CO2 for cars that contribute so little to our atmosphere given low relative production numbers plus low absolute miles driven per year, can only mean good things for buyers of NA stock today. Creating Passion of all kinds may become a diminishing commodity in the future as the world "guilt-trips" itself into banality. Your mileage may vary
Sorry, what do you mean by "all the stories" and do you mean that theb owner should have been happy with the bid and perhaps set his reserve too high ? Thanks
So, I guess I would like to pose a question that has been beaten around on here a bit but not directly addressed. What will make it burst? Or what will bring this to an end? Or what would/will cause a correction? I firmly believe we are in a bubble. I see it, I smell it, I feel it. BUT I struggle with what is going to make the music stop? Stock market adjustment to cause the music to stop? I don't know... US still one of the safest places in the world to park money. I couldn't see more than a 10% correction on the dow. Even then, I think that might cause more people to buy cars as an alternative asset/investment Cash? It seems like all these cars are purchased with cash. So no loan issues or HELOCs etc... I am not sure how many people get a loan on there stock values or even how that works (Absolutely no clue, but I know it exists) This to me seems like the most likely thing to happen. If there is a call then that forces the cars they bought to be liquidated. Investor/new money in the car world ending? I know there are many people buying from a list right now to buy cars. They have no business buying cars as investments. They are given a list from a car guy they go shopping and typically buy the wrong car for too much. Then the guy who sold it to them says, well I just sold my ugly color combo high mile repainted car needing 8k in service for xxx... I am going to sell my good one for xxxxxx. When the uneducated or new money gets there fill and things calm down will prices remain? Lots of thoughts above I know. Curious to hear others
Well, if we knew the answer to this question ^^^^ we would all be gazilionaires… That's the thing about bubbles, not many see the end coming until it has arrived, by which time its too late to exit gracefully. There are any number of possible catalysts… Bond market implosion, Europe self-combusts, China picks a fight with the US, Russia picks a fight with everyone, China picks a fight with Japan, San Fran disappears, terror attack, etc etc. The list of catalysts is endless and not predictable. All we know is that no economic situation stays stable for ever...
Who are these people "buying off of lists?" Do you personally know of any? I know a lot of people that collect cars, but not one that blindly buys cars off a lists provided to them by a "car guy."
I'm not convinced that all these cars are being brought for cash. Look at Gooding's website and you will see that is lists Ferrari Financial Services as one of its sponsors. Doubt they would 'sponsor' an auction house if there wasn't business coming their way.
Well I heard this too, and was the main reason it didn't go higher I believe, although don't have specific source for the stories....This may be wrong of course...I think perhaps he probably should have been happy with what it went for and taken it. The problem is for a lot of these high end sellers is that they are not fussed particularly and don't need to sell and in fact selling a car like that then gives them another problem. What do you do with the money again? So they therefore set a high bar, if it gets it, it gets it. If it doesn't ....well they just sit on it.
I think we may have a missunderstanding on the buying off a list thing. Its more of a non car guy wanting to get involved in investing/collecting and compiling a list of "good investment" cars to purchase based on his online research and going and talking with other collectors at maybe a cars and coffee and people in the car business. So the guy says ok... I should buy one or all of these say 10 cars.... Early 911 930 turbo 964 turbo 993 turbo Any air cooled 911 Dino Ferrari 550 etc... etc... etc... So then he goes out and finds a car he thinks is a good car and buys it. But, he doesn't realize what makes a good car, paintwork, color, miles, originality etc... and just buys because he saw it as a deal. Its not necessarily people buying blindly off of a list in the sense of being provide a list such as this: 2003 Ferrari 575 xxx,xxx 930 turbo xxx,xxx 993 turbo xxx,xxx 964 turbo xxx,xxx "Contact so and so the car broker to buy" What I am trying to say is that there is generalized list of cars to purchase focusing on a certain 10 or 20 cars or a couple of segments (making up numbers here) that are focusing demand by driving uneducated people to just those segments. Its sort of proping up the demand for the segment that ends up becoming a self fulfilling prophecy of rising values. I hope I made that a little bit more clear and not more confusing LOL. And yes, I see people buying off a suggested car list. I am in the business
When Scud owners claim their cars are going to soon be at $400k...bubble http://www.ferrarichat.com/forum/360-430/488816-considering-buying-430-scuderia-help-2.html
