is the bubble due to burst?

While it isn't "technically" a ponzi scheme persay, it is very similar in two fashions. Firstly, that it needs MORE and more and more "investors" to continue to come in to support the fantasy prices that were created the past three years. There are only so many sheep to shear out there. Enthusiast buyers only buy so many cars.

And secondly, it is borderline fraudulent that many of the auctions are now scrubbing auction results and sometimes even listings in order to keep the illusion of upward momentum going and to never let anybody see downward movement. Auctions are supposed to exist in order to guarantee a degree of transparency so that the market and public know the going price and the trends in order to be fair to all parties considered. Doing otherwise is extremely dishonest and they should be ashamed of themselves.

Case in point, Mecum willfully neglects to mention the price appreciation in terms of years says 400 percent over 10 year period. Neglects to mention that almost ALL of it took place over a two and half year period. Wouldn't want anybody to know that little detail!

http://video.cnbc.com/gallery/?video=3000401208

 

Any buyer can do their own homework. It's not their job to do your homework; it's their job to sell cars. Just like an agent selling a house or broker selling stocks. Do your own due diligence. Why is the assumption that everyone is a moron? Anyone can find this information in the same way that you did and there is a host of sources.

What do you mean by scrubbing of results?

 

make a chart with a large X on it... label one slope as demand, the other as supply... plug in the variables of your choice... voila a Ouigy board that is never wrong

 

I think instead of trying to draw a parallel to a ponzi scheme, you've simply defined a free market.

 

Well 993 turbos were never 350k. They barely scratched at 200k unless its a turbo S obviously

And many people knew that those prices were aggressive. There were MANY people standing on the sidelines going... that doesn't make alot of sense.

Yes there are crack pipe prices. But there always has been. You can go on and on throughout history and make this example in virtually every market.

The biggest sign is that the cars are not trading at those prices. So carrera GTs were 800-900ish. and now there were several at auction that bid 550-600. And guess what... that didn't actually shake the car loose. So bidding numbers and trading numbers are always different. If people were cutting them loose that would be problem

Also, I think most of the people saying that Ohh those people are losing there ass because of this and that... really for many it is either an unrealized gain (or lack there of) or a loss. they either bought it when it was 300k went up to 900... didn't sell then and now its worth 700. Did anyone get hurt? Now if you were the guy that bought at 900 and you sold for 700 yes. (one of my friends falls in this category... but... since he is a guy who has enough gun powder to buy a 900k car... he isn't selling. He didn't buy it solely for the investment... and with the money he makes at his business... a 200k loss would be just a minor blip. Its not going to change his life one bit (other than maybe an angry spouse lol)

There are so many factors and the markets that doubled and tripled in price is such a small sector and those that bought did so with a large discretionary income that its not going to cause a catastrophe.

 

I am as skeptical as they come... but I haven't seen anything fraudulent that the auction houses are doing. They have reported all of my cars accurately. I have only missed a few mecum auctions this year overall. I have been to MANY MANY MANY auctions all over the country... and I love to try to find the bull****... but... I haven't seen any. The bull**** I see is the ridiculous estimates the bigger auction houses throw on. I don't know how they think it can keep going up and up and up... but... show me the difference between stupid and illegal and Ill have you arrest my brother in law.

Your point of the car running up over the last 10 years can be taken several ways. Many investment type people look at 10 year runs so it may not be conspiracy. Also, of course the auction house wants to try to make the market seem positive. There is nothing wrong with that. Its there job. I tell you what with the amount of money in cars I had consigned at Mecum Monterey and the amount of money and effort I spent getting the cars there... if that jerk jumped on TV and said the market was slidding back I would be ****ING PISSED.

The biggest thing I would like to provide a counterpoint on is... There does not have to be MORE and MORE INVESTORS. Its simply not true. There just simply has to be acceptance of the value and a person willing and able to write a check for that. More and more people do not have to come to market. That is a massive missunderstanding

 

Not at all. A free market in this case (investment idea) doesn't melt down and lose all or more than all of it's profits/gains in a matter of months or a year when all of the "investors" in search of a quick easy buck flee. A free market free from manipulation has gains and losses that are steady. And most investment ideas are based on businesses or something that actually produces a profit and are mostly transparent. Not a piece of metal with four wheels that produces nothing. Imagine an earnings call for a public company where the CEO gets on the phone and says "we will not be disclosing earnings this quarter" (because they were down). "Sorry folks."

It is true in this case given where the prices were at the peak. Way too high, too much gravity below them. Now had the cars had a healthy, steady gain that was realistic, then yes, I would agree with you. But the only way to keep the scam going is to bring in more fools. There are only so many (with the money) out there. The typical car-nut (who is a rare breed to begin with, most people see them as a simple mode of transportation) and makes 150,000 to let's say a few million dollars a year is not going to step in and buy at these levels.

 

here is the definition of a free market economy

"A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. It is a result of a need being, then the need being met. A free market contrasts with a regulated market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or price fixing. In a free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy, and it typically entails support for highly competitive markets and private ownership of productive enterprises"

are you really going to say people have paid for cars at prices that are against their will? what has caused prices to go up is demand. Sellers raise prices and at some point there may not be buyers. I'm having a hard time understanding why we are even talking about this crap.

the car market is 100% an at will market. No one is forced to buy anything.

can someone tell me if I'm completely crazy?

 

Once again, spoke like someone who has absolutely no clue what he's talking about and everyone reading this thread is laughing at you, repeatedly.

1) When someone sells a car, do they make more cars and sell them to multiple people? Of course not. They sell one car to one buyer. And guess what else happens: they sometimes will buy that car back later. I've owned the same car more than once. One of the Ferraris that I own had the same two of its former owners twice because they missed the car after they sold it. The marketplace does not have to get bigger and bigger. There simply needs to be more desire to own a car. And that's an inevitable because enthusiasts get more and more passionate about their hobby as time goes on.

2) You've alleged here before that RM Auctions have committed fraud on a federal and International level: http://www.ferrarichat.com/forum/144451065-post2.html

Lots of us here buy and sell cars at auctions, including RM's, and have witnessed no such thing. It would probably be best if you spent some time learning about what you try so hard to discredit. Although it doesn't seem like truth telling or credibility are things that you hold in high regard so maybe you need not bother.

Whoa, whoa there. Stop talking like a rational person who understand the facts and uses big words properly. You're going to scare off the clowns and then this thread will have no place to go but to the bottom of the pile.

 

Maybe he confused RM Auctions with Miracle Cars?

If you say it will rain in the Sahara dessert every day, one day you'll be right I guess. Though I don't know how making this daily prediction helps anybody here in the almost 4 years since this thread started back in Jan 2013.

 

I feel like we are talking about the market/pricing for some miracle drug that heals all. we are talking about cars.

 

Sure they are pal. Just like when I predicted the demise, and how it would internally happen to a T at the beginning of last summer when everyone was still high on the euphoria. Then watched it all unfold exactly so since last summer. Yet you still give me no credit and refer to me as the fool. Hilarious. Oh well, Carry on with Paul, I'm sure he's still furiously posting away.

Yawn.

 

There was a demise?

 

credit? for what? you are completely out of your mind. Do you think you are Harry Markopolos or Michael Burry? you are talking to people who love their cars and have passion about them. This isn't some opaque investment in a fund or a bank/government related market.

 

Maybe some of the buyers thought their Ferrari would cure cancer.

 

HAHAHAHAHAHAHA!!!!!!


You think there was a demise??? and you called it??

 

Well let's see. The market was down 20 plus percent starting in feb. all the way through this summer where everyone said "It's summertime now, prices will be up!" Wrong. down further and further. Only the truly rare stuff is holding steady (some of it is still falling) and the high production cars are tanking hard and not selling.

Weren't you also the guy who made fun of me last summer who trolled me on B&I for taking on a gold futures position? How did that one turn out?

And I see you enjoy out-of-context posts as much as your lover Paul does. How cute and pathetic. Guess it's time to put this username on ignore as well. Have fun finding another person to talk trash to via internet. Hopefully they don't take your investment advice.

 

I cant. I really cant.

wait, I got it. Ashton Kutcher is about to post and punk us all!

 

First of all, what "market" are you talking about? If you look at the HAGI or Hagerty values there are no such thing as a 20% drop. Maybe 3% in some sectors. They divide the car market into individual segments as there isn't really "a market." A market, as you define it, would include cars that are simply used cars and those easily depreciate 20% in just one year, often. As others have said, the best classic cars are still making world records. It's a healthy market for enthusiasts.

Secondly, you called for a 60% drop and 13,000 point DJIA. Remember that? 3% is not 60%.

Lastly, not that it's any of your business but since you brought it up, my gold investment from last summer paid off with over 300% gains for me so I'm not sure what you're talking about with investment advice (Seabridge Gold, NYSE:SA, look it up). For the record, NO ONE EVER TAKE INVESTMENT ADVICE FROM ME (not that I give any as I am not fit to do so, unlike lots of others on here).

 

The name calling is a hallmark of a bad argument. (At least to me)

You guys probably have more advanced analysis but SCM says total sales:

http://www.sportscarmarket.com/news/monterey-car-week-auctions-total-345-million-so-far

2013: $308m
2014: $464m (+51%!)
2015: $397m (-14%; +29% 2013)
2016: $345m (-13%; +12% 2013; -26% 2014 )

(I don't have the data for earlier here right now)

Looking briefly at these numbers, its pretty easy to predict some kind of pullback from 2014 levels.

I think these markets are relatively thin compared to what we consider investment markets. Given the nature of what we are talking about here, I don't think the market is crashing or falling apart. I think its acting fairly rationally.

My question for the experts is where do we go from here? I don't know about where values go but I can tell you I'll be out driving

 

Facts are facts and talk is cheap. Let's analyze a cross section of the demise of the car market. While I generally chose cars I at least know something about, I hope that I have picked a wide enough range of cars to make the point. There are plenty more, but frankly I got bored of finding so many:


2011 Porsche 997 GT2 RS | Gooding & Company

1955 Mercedes-Benz 300 SL Gullwing | Gooding & Company

1990 Ferrari Testarossa | Gooding & Company

1988 Porsche 959 Komfort | Gooding & Company

1971 Lamborghini Miura P400 SV | Gooding & Company

1968 Ferrari Dino 206 GT | Gooding & Company

1955 Lancia Aurelia B24S Spider America | Gooding & Company

1967 Ferrari 275 GTB/4 | Gooding & Company

1994 Porsche 964 Turbo 3.6 S Flachbau | Gooding & Company

1972 Ferrari 365 GTB/4 Daytona | Gooding & Company

1998 Ferrari 550 Maranello | Gooding & Company

1972 Iso Grifo Series II | Gooding & Company

1976 Porsche 930 | Gooding & Company

1956 Porsche 356 A Speedster | Gooding & Company

1985 Ferrari 288 GTO | Gooding & Company

1969 Ferrari 365 GTB/4 Daytona | Gooding & Company

1972 Ferrari Dino 246 GT | Gooding & Company

1989 Ferrari 328 GTS | Gooding & Company

1999 Lamborghini Diablo VT Roadster | Monterey 2016 | RM Sotheby's

1977 Porsche 911 Turbo Carrera | Monterey 2016 | RM Sotheby's

1972 Ferrari 365 GTB/4 Daytona Berlinetta by Scaglietti | Monterey 2016 | RM Sotheby's

1965 Jaguar E-Type Series 1 4.2-Litre Roadster | Monterey 2016 | RM Sotheby's

1956 Porsche 356 A 1600 Speedster by Reutter | Monterey 2016 | RM Sotheby's

1993 Jaguar XJ220 | Monterey 2016 | RM Sotheby's

1990 Ferrari F40 | Monterey 2016 | RM Sotheby's

2004 Porsche Carrera GT | Monterey 2016 | RM Sotheby's

Bonhams : 1974 ALFA ROMEO MONTREAL

Bonhams : 1991 FERRARI 512 TR

Bonhams : 1981 FERRARI 308GTSi

 

no no no. clearly you are curve fitting. And remember: auctions results are only credible when results are below expectations or low. When auction results are strong then its manipulation and therefore a fake and unworthy print. duh!

 

Gross numbers are misleading. For example, in 2015 RM had an extra night of auction with the Pinnacle collection, which totalled $75MM. If you take that out of the mix, 16 was stronger than 15. A few high dollar lots can skew these numbers as well. So much for the demise.

 

Not to mention a great deal fewer cars in the regular sale because of the construction at the portola.

362 lots in 2015 vs 249 in 2016. And that's just RM. I would consider that a material reduction in lots.