Retracement VS. Reversal? Impact on Luxury Market (including Ferrari)?

Stimulus (quantitative easing) will again cause asset price inflation like it did QE1+ after temporary demand shock subsides. That in turn will lead people to buy things that are perceived to hold value...assets (stocks, real estate, art, jewelry, collectibles, etc, including blue chip cars).

 

First of all a big thanks and congratulations to you and your wife. The work that you guys are doing in these tough times are going to be much appreciated by your community.
Second of all, most luxury items IMO will not come back the way that they did after the financial crisis. That was a different era. People don’t fall for the same trick over and over again.
People have lost loved ones, their jobs, and large parts of their personal net worth. Your priorities are not going to be

 

Sorry, hit send too quickly!
Anyway their priorities are not going to be to go out and buy luxury assets any time soon.

 

The consumption of luxury goods will subside for a little bit, but as people forget about this latest bump in the road..it will go back to normal until the next time. OR..it could make people just say "frig it" I'm going spend on stupid stuff!! I could die because some idiot ate a bat or whatever.

 

You talk like a) this is the end of civilisation, and b) humanity will just stop aspiring to a better quality of life.

In every crash and crisis, there are some that are irreparably hurt, some who suffer temporary setbacks, and some that actually benefit to a greater or lesser extent.

But this is not be the end of the world, and like every other crisis, this will likely usher in a new wave of opportunity, which will ultimately benefit those astute enough to see the opportunities and capitalise on them

As for luxury goods, they are aspirational. Just because people suffer setbacks, does not mean they stop aspiring to a greater quality of life, which includes luxury items. Have you/we stopped aspiring to own Ferrari’s? For me personally, the answer is no. Would I rush out and order another tomorrow? No (especially as the factory is closed until further notice). But do I expect to at some point in the future? Absolutely.

At this point, it’s a matter of the luxury brands surviving the next (I’m guessing) 18-24 months - longer for some, shorter for others.

But if they can survive, demand for luxury items will most certainly return

 

a good friend of mine is friends with some local prominent restauranteurs in town. guys in their 40-50s

they are getting pounded. not sure if they are going to make it but if they do, all are considering cutting back operations and their lifestyles.

 

https://www.texasmonthly.com/news/tilman-fertitta-coronavirus-interview/

 

jeffries priced those fertitta bonds on friday i think double digits yields

 

Unless the whole world collapses (and hopefully we're not there) there will still be demand for luxury goods - but in any situation, there is a level of balance. The new situation (whatever it will be) after this crisis will have its level of balance, and the big question mark is how far this new level will be from the previous level.
Initially it will probably be lower, because people will be more cautious, being more concerned for their future.
Longer term previsions are more complex - over time people will forget the fears, and could even want more immediate satisfactions to cope with the anxiety.

 

I've gone from "cautiously optimistic about retirement" to "this is a damned bloodbath, and I'll be working as a Walmart Greeter when I'm 80."

But I've not even remotely considered selling my Ferrari. Don't know if that answers your question or not.

 

I think an important "positive" to come of this is:

This is the last coronavirus that will be able to cause a panic.

Why?

Simple,

We will have at least 2 cures for it!

* HydroxyChloroquine + Zinc (and maybe Zpak if some secondary infection is present)

and

* Leronlimab

Both are in clinical trials right now for C19/coronavirus impacts and results and both are doing well in their respective trials

Thus, by the next time another "wet market" mystery coronavirus shows up, we will calmly see it dispensed with ease.

 

If it were true, that would be great. But the planet's response to Corona is such that I've most of any faith I had in the sensibility of humanity. The next irrational disease will simply bring a new, more robust round of what we're experiencing now.

 

Rahul, gratitude and sympathy to all you physicians and medical professionals, as well as everyone else on the front line. You signed up to save lives, but not this, to be there at risk of massive viral doses, when the rest of us are just locked in our homes worrying about our businesses - if we are lucky.

I work in the luxury business which has essentially pressed pause for the next six months. To answer your question, it's impossible to know what happens next there. There will be big suffering for a while. But demand for stuff springs back very fast after catastrophes. Examples: the roaring Twenties; Germany's economic boom less than 10 years after the Holocaust; Russia fuelling the new luxury market in the 90s less than a decade after the deprivation of the 80s, and so on.

Our situation now could go on for months or years, many will die. Others will lose their livelihoods, and I don't kid myself that I could be in either or both or those categories. But demand bounces back, and despite EVs and the like, Ferrari is still the number one luxury brand in the world.

 

A 348 is cool looking in a way a brand new Ferrari might inspire a different reaction..kudos and enjoy. I have driven my Ferraris more, recently, also - mainly because of a curious combination of lockdown and unseasonably good weather in England. In affluent Hampstead, two joggers gave me the finger - with impressive eyesight, they started when I was 200m away, and continued as I drove past. I could have been a physician or a psycho, but it was against their rules. I am glad you are amid less intolerant people.
And we all need joy right now.

 

You know what they can do with that Finger!