Mike Sheehan - The Ferrari Curmudgeon

Just bring his article in with you and toss it on the table when you go to negotiate a price on the Dino. Would be fun to watch and see how much of a "Hummana hummana hummana" you get from him.

 

I believe that is refered to as ...."Hoisted on one's own Petard"......Mark

 

Never trust a dealer to comment on prices of cars he sells or cars that compete with the cars he sells, or cars that relate to the cars he sells.

Prior to being an automotive journalist, I worked in corporations. Prior to corporate work, I was in politics. The same is true for all three -- the longer you spend having people ask you your opinion in a specific area, the more you believe your opinion is worth more than it is...and more importantly, the more your opinions and actions reflect your self-interests.

 

I think the magazine is great because it is entertaining and they try to make if fun and provocative. Mike always does the math the same for all the cars. need paint? 25K and up! etc. +++ you just spent 80K on a car worth 25K! There is some truch in it but he gets people talking which in his crowded field is something. I have always thought of him to be like Lee Corso started out on ESPN college game day. The old guy talking the counterpoint and getting the crowd worked up. Back in 2001-2003 he trashed C4's and Boxer's but when the market moved from 45-75K for these cars to 100-200K he found himself bringing these into the fold of "investement cars". The other funny thing he does is start many articles giving a macro economic view of the world as if he's some Goldman analyst. I am sure though that for guys like him the big buck cars are so much easier because he gets to fly around finding them and they don't balk on expensive repairs as much as the bargain cars.

 

What's that saying about opinions and sphincters...and everyone having one?

 

I respected his opinion and business until I was involved in buying a car he brokered.


We won't be doing business with him again.

 

I grew up in the 328/TR era, and IMHO the cars of the '60s are classics, while the new stuff is more or less disposable. Also, there are only 39 or so GTOs in existence, so I doubt the $20M price tag is a result of everyone being nostalgic for the GTO they grew up with.

There is huge black line between the pre-smog, pre-computer stuff of the early '70s and the technology showcases of today. Technology doesn't become classic. It becomes obsolescent.

I like TRs for their brashness and '80s over-the-topness, but really -- motorized seat belts, orange gauges, plastic all over the place... they aren't exactly timeless objects, just a bargain now that they cost less than a Porsche Boxster.

What he said.

 

The old cars have two big advantages (3 really) over the newere ones.

First, they are old. Old stuff is worth more, almost by definition. Hell - Van Gogh's paintings were worthless when they were new. Virtually any 100 year old watch has value.

Second, the old cars are a lot more rare than the new ones. Part of that is because they built so few and part because some have been lost over the years. Rarity increases value.

Third, the old cars were made different. They are less complicated and easier to work on. They were also a lot more hand built, which makes them easier to restore. Also, that hand built nature of them appeals to people who live in a world where everything is mass-produced - most likely in China. The old cars have more charm.

Thart said - the new cars have their advantages too. After all, I sold my 330 GTC (and my 3500 GT, and other old cars) and now have a 360. Sacrilege in MS's eyes I am sure. Why??

First and foremost, the old cars rrequire constant tinkering.

Second, the parts you buy for them are expensive and often crap. There is nothing more discouraging than spending a lot of time and money to rebuild your engine only to disover that the parts you bought to do the job were poorly made out of the wrong materials.

Third, the new cars work better. They drive better. They handle better. They are more comfortable. The AC works...most of the old cars don't even have it.

One big factor on future collectability and value of the newer cars that MS ignores is that tover the past decade there has been an EXPLOSION of potential buyers for used post 1990 Ferraris. 10-15 years ago there was no knowledge or interest in these cars in China, India, Malaysia, Indonesia....countries that combine to account for more than half the world's popluation. Now kids in ChengDu China (a little place over there you probably never heard of with a population of about 8 million) have posters of 430s on their walls.

It will be interesting to see how this quantum change in the world will affect the future of Ferrari. But it is very clear that Ferrari clearly sees the potential of these new markets. They are getting their name out very aggresively over there - staking out the high end beachhead in a places where it never even existed before. Theink about this - there are 2 (TWO!!!) Ferrari dealerships in Chengdu - more than in any city in the US.

I would also throw this idea out as another possible total lgame changeer. What would happen if the governements of the big countries suddely decided that enough was enough. That cars with mega power and mega consumption were social wrong. And made some law that every new car sold had to get a minimum of 20 mpg. What would happen to the value of the existing high performance cars. This isn't science fiction - it could reasonably happen the way things are going.

 

post Enzo is anything made after Fiat acquired their interest in Ferrari, that was 1968 I think, although not at all sure on the exact date.

At least that's my understanding of the term as a guy like Mike Sheehan would use it.

D

 

The Daytona and Dino make the Enzo era cut as they were in the works and debuted before the sale. SCM, along with others in the trade, tend to use 1973 as the cut off for the golden age. With few exceptions (288 GTO type cars), the tend to think that eveything that came after that time frame will just be a used car. But if you focus on safety/emission equipment as being the big change, then that would really depend on the car/make.

 

The big buck guys aren't dealing with Sheehan. As mentioned elsewhere, reputation precedes...

CW

 

Correctomundo!

CW

 

John, great post all around.

 

New cars are better to drive, no doubt about it. And A/C is nice for a daily driver.

But when you're talking about investment-level money, driveability is only one part of the equation. I would take an F430 to drive now and enjoy, but as an investment it isn't much ahead of this week's dairy products.

Everyone has some threshold beyond which the money you spend on a car makes you take a longer term perspective. I.e., probably most of us view something like a BMW 3 series as a (quality) driving appliance with a long term value approaching zero. At $40K or so that's all we expect.

When you get to $300K-$500K for a car, though, many of us are looking for intrinsic, long-term value. A 330 GTC, for example, is and will always be a classic -- yes, it costs 599 money, but 20 years from now you'll get most or all your money out of it. In the meantime Ferrari, Porsche, et al will have made many cars that supersede the 599. So, with the 599, you have a car with old airbags, dated computers and specialized parts that will be NLA.

I think Sheehan comes at it from this perspective. I have heard him call the TR and 308/328 bargains in Ferrari ownership, and I think he likes the 550/575M. But he clearly draws a line between the Fiat and Enzo eras.

One quibble with your argument about reliability: As the current "newer" cars become old they will require more tinkering, and there's a recent thread about a $2000 piece of plastic in the 360/CS footwell. I suspect the combination of obscene parts prices on depreciating modern cars won't help their investment appeal over time. The incredible depreciation on modern Mercs, for example, is due in part to buyers being properly scared that there is a lot of expensive stuff to fail.

 

Plus one

 

In 1969 an agreement was signed 49/51% in Enzo's favor...with a few details (set aside for Pierro)...he maintained majority ownership and FIAT was the minority.

That was the case until he died, in 1988.

Then FIAT got the rest to become majority owner, with Pierro maintaining 10%.

Enzo called the shots on the F4o design.
He drove the first protoype ( a valued one off now) and approved production before he died.

I personally would in no way call his deal to FIAT in 1969 a sell off, OR a sell out.
It was crafty like a fox, and thereby saved his beloved company to continue stomping azz in F1 until his death (admittedly lean years)

 

He was honest that it had a bad gearbox.I thought he was trying to sell me a pig in a poke.But now the same car is probably worth about 200K if a penny. So everything is relative, if I would have bought half the cars he sold in the '80s, they would have outperformed the Dow Jones average. I am not saying that will happen with cars from the 308 forwards but at least with the pre-'72 cars, if the tradition continues, they will go up.

This thought on the new buyers: Ferrari is opening up dealerships in India, China & Russia because that's where the new money is being generated. As the executives in the new firms in those countries become instant millionaires (well, I take that back, maybe just having $1 million isn't enough anymore to start living "la dolce vita" ) their new friends will point them toward the finer things of life, from Monte Cristo cigars to Riva boats to Ferraris. And then they enter the Ferrari owner field intent on buying something first to show off but a select few will become enthusiasts for the old and classic, James Glickenhaus becoming an example. Once he was just happy being a wall street maven or a movie producer, now he's trying in how own way to steer Ferrari back into prototype sports car racing and spending millions doing it. So I would say, unless Ferrari greatly increases their annual production, demand will always grow more than the number of cars they can make.

And I don't think superior technical virtuosity like that shown recently by McLaren, will make much of a dent on Ferrari classic car prices because you can't drive the old McLarens prior to the F1 on the street (though I have seen some people try to street legalize a Can Am car...)

 

I have heard of him but his opinion has no impact whatsoever on me concerning Fcar's.

 

True, BUT he "specializes" in used Ferraris. Not used VWs. He's not exactly picking them from the pink sheets, now is he?

CW

 

Link to another of Sheehan's stories regarding the "cheap" Ferraris.

http://www.sportscarmarket.com/columns/sheehan-speaks/2763-a-ferrari-328-with-needs-is-a-friends-bad-deed

Now I'll agree a crappy 3x8 isn't worth restoring, but as long as it runs and there isn't cancerous rust on the body a weekend mechanic can do wonders bringing it back up to a reliable running condition at a reasonable cost. Not every Ferrari has to be in concours condition.

Sheehan's opinion is obviously geared toward the perfect investment grade Ferraris and I can respect that. However, I would much rather see someone take a $20K 308, spend a couple of months fixing it up, and enjoy driving it. You won't make any money on it, but what price is it to to be able to say "that is my Ferrari" even if the paint has orange peel, the engine bay is slightly dingy, and the seats show some wear. Dammit man, it is still a Ferrari.

I'll leave with a link to this post by judge4re where he got a good deal on an 83 QV. A little work and he wound up with an excellent driveable car.

http://www.ferrarichat.com/forum/showthread.php?t=57486

 

Excellent post - both paragraphs!

LOL!

Actually, interesting little factoid, Sheehan started with VWs. He'd find dilapidated Volkswagens, buy them, fix them, and flip them. That's how he got started.


I haven't worked with Sheehan in more than a year, but his articles, when coupled with his buying and selling efforts, show a trend. When he's looking for a 550 for a buyer, he'll write about how they're money pits, and asking $80K for one is outrageous. But when he has one on consignment, he'll write an article on how amazing they are, and why you shouldn't buy anything other than a 550.

Do you remember those "I'm huge in Japan" t-shirts? Well Mike could wear one, and it would be true. He was the business back in the '70s and '80s, cutting Daytonas, keeping abreast of market trends and hustling 250 GTOs. He broke into the Japanese market, and is still a household name over there amongst collectors (albeit some of those collectors might use his name in vain). Now he takes on consignment the same cars he berates in his articles. He's really good at what he does - as has been noted by ilconservatore - which is why he's consigning injected 400s and not competition unobtainium.

 

While I think rarity trumps technology any day of the week, there are certainly those of us that find certain technological milestones very attractive as classic ownership goes. Here is a list of cars (some expensive, some not) that I lust after just because of their technology:

BMW 2002tii -- Who doesn't love a fuel pump more complicated than the whole engine in other cars?

Jensen FF -- First AWD sports car. First car fitted with *mechanical* ABS

Citroen DS -- I don't think I even need to explain this one.

Porsche 959 -- 3 computer controlled diffs to create an AWD supercar. This pushed the envelope forward. I wish they had built 20,000 of them...then maybe I'd have a chance at affording one.

Mercedes SSK -- Supercharger + self-adjusting mechanical brakes with over 200 moving parts...<swoon>

I love technology, innovation, engineering, and complexity. Right now I'm wearing a 1973 Bulova Accutron Spaceview watch. To me technology can be classic.

 

Sorry if my message is not fully relevant to the topic, but I think the last paragraph of PFSEX is spot on: it IS ALREADY HAPPENING in some places in Europe.

I am not saying that France qualifies as a big country...but there is a project under serious review here to forbid entry to, and circulation in, the eight biggest cities of the country for any car with emissions above 200grs/CO2 per kilometer. Which means any Ferrari, old or new, will be forbidden in those eight cities.

And if the eight biggest cities begins one day, more will probably follow.

Then what? Lets imagine that Avenue des Champs-Elysées or Avenue Montaigne in Paris, or the whole french riviera, from St Tropez to Monaco, is been put "outside limits" for Ferraris. Showing-off will be impossible. So about nine owners out of ten would not have anything to do with their cars anymore.

Add to this the growing tendency of automatic speed traps almost everywhere, difficulty to find any worthwhile stretch of road without a roundabout or a speedbump.
And the price of gas which is at about 1.60 euros for one litre of premium gas (that is more or less 5.8 euros per a US Gallon...)

Then I think that PFSEX has indeed a point here; I don't think that, at least here in Europe, these cars will stay "socially acceptable" for long. The clock is already ticking..
And then, I wonder what consequences this will have on their prices? so I don't think that, as far as cars could be considered as an investment, the future will be mirroring the past.
Except, perhaps, in the new emerging markets.

 

I just got an e-mail from him, which might be the same article as the original post.

So he represented the exact same Daytona to three separate buyers?

The first one was presented a "needs absolutely nothing" 365 GTB/4. That, upon a PPI, needed what turned out to be $12,000 in front end suspension repairs.

After that deal fell through, Sheehan then re-listed the car, without full disclosure about the front end end, but with a price reduction. ("Priced right at $xxx,xxxx.")

The second potential purchaser, and second PPI, found radiator supports that were bad, and also not disclosed. The deal starts to smell so bad that a third mechanic gets involved.

So Sheehan re-lists the same car for a third buyer, who wants an all-cash no-inspection deal. This fish is on the hook, but Michael insists on a PPI. Seller sells at less than promised, buyer gets less than expected, Michael helps the shop out in order to save the deal. Everyone is a little less than satisfied.

But the most important thing is that the same Daytona got represented the same way by Sheehan, although for less ("Priced right at $xxx,xxxx") money each time.

Is that accurate?

 

The one's on the hate side of Sheehan often recoil and wince at his blunt truthfulness. He's seen it all and is unimpressed in general especially with the used/neglected/non-collectible fleet era Ferraris.