Early 1990s crash of collector Porsche and Ferrari values...how did it happen? | Page 4 | FerrariChat

Early 1990s crash of collector Porsche and Ferrari values...how did it happen?

Discussion in 'Ferrari Discussion (not model specific)' started by MonoSpecchio, Dec 11, 2015.

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  1. Carbonero

    Carbonero Formula Junior

    Sep 2, 2009
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    Fascinating thread. Lots of good thoughts, but:

    There is one point that I haven't seen mentioned, nor alluded to.

    Who, exactly, will continue to support the "up" movement of the collector car market which some seem to believe will rise forever? Upcoming generations seem to have very little interest when compared to fathers/grandfathers.

    Millennials Don't Care About Owning Cars, And Car Makers Can't Figure Out Why

    Ownership, not to mention upkeep of a vehicle demands a certain level of commitment which seems to be lacking. Where then, is the passion WE afford to our collectibles? How about generations after that?

    We'll be gone, but the cars will stay... but for how long?
     
  2. sherpa23

    sherpa23 F1 Veteran
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    You asked me no such thing. The only thing you asked me was how old I was, which has no relevance.

    My point was that the segment that is largely buying collectible cars is not deeply effected in a negative way by higher oil prices. In fact, higher oil prices leads to a boom in this segment. I never said that low oil prices and weaker economy are good. Regardless, the point was that BigTex said that a spike in oil prices caused a crash in 1989/1990 in collectible cars. I said that makes no sense as how can a whole hobby (I use that specific word) be wiped out by a spike in something so tangential to the hobby that the number of people it would effect in a negative way would a very small minority. I wasn't referring to the economy as a whole. Besides, low oil vs high oil are two very different problems.
     
  3. LV Eric

    LV Eric Formula Junior

    Apr 1, 2006
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    lets say i owned a long haul freight company and drove a ferrari, fuel goes up $1/gal

    those are facts

    now lets say i have 100 tractors on the road covering 700 miles/week each thats 70,000 miles a week. Thats a lot of fuel

    I drive my Ferrari 100 miles a week.


    Does fuel prices matter to me? the Trucking kingpin???


    At the pump prices as you stated mean zero to Ferrari drivers, however what businesses they are involved in are for the most part tied to oil. and i know if i owned 100 trucks and fuel goes up 33% i'm not at RM Auction looking for another Vintage Ferrari.


    Macro Economics not complicated,

    best
    Eric :)

    aint mad at ya but look wide not narrow in life
     
  4. sherpa23

    sherpa23 F1 Veteran
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    I completely get that but that's not on its own is not going to cause a widespread crash (75%) reduction in prices across the board. There were many other factors. I didn't say that it would have no effect. What I said was that high oil prices on their own are not going to bring down that entire market on their own. That is a wide view, not narrow.

    But what do I know?
     
  5. TooTimidAndCheap

    Jul 19, 2015
    105
    Can someone give an example of the price action of a particular car?
    Price in 1985,87,88,89,90,95.


    I'm curious where they bottomed out at.
     
  6. Themaven

    Themaven F1 Rookie

    Nov 2, 2014
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    Interesting argument and I'm sure it has merit - and this is the article that's always displayed in support.

    However, when I am taking cars I am reviewing through the tourist throngs of central London, it's not the all old guys who are pointing, open-mouthed, and shouting, "Dad, look at that Ferrari/Lamborghini/McLaren/whatever."
     
  7. Bas

    Bas Four Time F1 World Champ

    Mar 24, 2008
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    I definitely think a crash of the market will happen, but not nearly to how cheap cars where in the 90s or even mid 2000s (F40's for 250K euro for example). Prices will adjust themself soon, I think, I think up to a 40% adjustment for ''suddenly popular'' cars and ~25% adjustment to blue chips like F40, F50, Enzo and Ferrari classics.
     
  8. boxerman

    boxerman F1 World Champ
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    Car kids are always a minority, and the percentage of kids really into cars wont change, just as the percentage of kids into science wont change. All the rest of the kids might be into transport pods though, and that could be an issue for GM. But car kids, they will always want a ferrari or lamborghini etc.

    Lets also not forget than in the exotic sphere many are now bought as fashion wealth statements, and thats a branding issue that has little to do with actualy driving or cars.
     
  9. Themaven

    Themaven F1 Rookie

    Nov 2, 2014
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    Good point..and some of those consumers think old cars are like old shoes or last year's D&G.
     
  10. LV Eric

    LV Eric Formula Junior

    Apr 1, 2006
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    Yup, yup, & yup.
     
  11. tundraphile

    tundraphile F1 Veteran

    May 16, 2007
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    11,000 308GTB/GTS variants were built between 1976 and 1985 IIRC. They are not exactly rare.
     
  12. AMA328

    AMA328 F1 Rookie

    Nov 12, 2002
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    ABQ-67me68-OKC :)
    Your experience reminds me of the early spring of 1989, when I sold my 308 GTB to get $$$ for my incoming 328 GTB. Way before the web, so I think I just shoved ads out in Hemmings and the FML(Ferrari Market Letter). I was able to tell the exact day both ads hit, as my phone started ringing almost nonstop, with all sorts of characters wanting to be my new best friend; at least, until they could get their hands on my car. Was really sumpin' else. Blew my mind, as I really didn't expect the huge response.

    $$$ makes many people do weird and stupid stuff...
     
  13. AMA328

    AMA328 F1 Rookie

    Nov 12, 2002
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    ABQ-67me68-OKC :)
    If you search, there may be some old threads here on Fchat about this, but offhand, I don't recall anyone putting together charts or spreadsheets on this.

    Best bet may be a manual deep dive through old copies of FML or Hemmings. Time consuming and a pain, but if that data was never digitized, you'll have to go analog.

    Personally, I don't think there was a single catalyst to the drop in the 1990s. More likely, market had run way up, stalled and a variety of other negative economic factors were starting in play and the music just stopped. As I recall, when the Iraq invasion began, the overall mood in the U.S. was pretty negative. 'Atmosphere' affects collectible markets, too.

    It can take people quite a while to watch and participate in a years long run up in prices, but when the fall off begins, everyone heads for the exits at the same time and you get a very time compressed tanking in the market.

    I see variations like this in the stock market all the time, but there the liquidity is such that finding a buyer is not an issue. There it's all about price and timing. In the car biz, liquidity is much, much more of a problem. Gotta find a buyer before you can even begin discussing pricing.
     
  14. paulchua

    paulchua Cat Herder
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    #89 paulchua, Dec 21, 2015
    Last edited: Dec 21, 2015
    I don't think anybody disagrees that a huge spike in oil prices will have an affect on macro economics, just see oil embargo in the late 70s. But outside a black swan event such as oil spiking back to $120+ a barrel for a long period time, normal swings of oil in itself is not a guarantee of ensuring global slowdown.

    To further my stance, recent events have shown it is unlikely for a spike to occur due to the feckless nature of OPEC we have seen recently. With prices nearing 10-year lows - OPEC decided to *maintain* (read:increase) production to further ensure market share and bolster struggling government budgets. Russia is pumping oil out into the market as fast as she can, same with socialist South American countries to maintain their social subsidies

    Combine this with the fracking here domestically, the desire to lift the export ban, millennials preferring high mileage cars with zero performance, new CAFE standards, and the start of the electric car love affair - all these will contribute to subdued demand. I have not even mentioned China's slowdown yet.

    If oil spiked to $120-$150 barrel for years be a needle? Of course!

    But I myself have not seen anything that will cause this, especially once sanctions are lifted on Iran in 2016 and we have yet another huge stockpile of oil hitting the market...
     
  15. paulchua

    paulchua Cat Herder
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    #90 paulchua, Dec 21, 2015
    Last edited: Dec 21, 2015
    of course a crash will happen, that's just how markets work. It's in vogue to take this position nowadays after 2 big crashes. All doomsayers will be right eventually. But in the end it's not really a very insightful or helpful viewpoints because everybody is saying it. There is not a day that doesn't go by where I see some financial article with the headline "Crash is imminent" it's everywhere...I've found that it's when nobody is saying it..that's usually the sign to take the short position..

    ;)

    in terms of collectible cars, I agree now is probably not the best time to purchase (from a purely speculative angle), however if one is taking this position as a lament to missed opportunities, I would recommend one jump on the valuation bandwagon, the higher the disconnect from real value, the stronger the fall. Of course this is itself is a risk if a 'fall' does not occur, but given the strength of convictions I've seen, it shouldn't be a leap of faith - but a rational calculated low risk.

    If one is seeking to denigrate the run-up prices from any position outside envy, the wise position is to bolster the rhetoric so when the 'fall' does happen it will be even more 'severe' (higher the disconnect, the harder the fall)...then one can enter the position. Any other commentary can risk appearing as a person that "wasn't invited to the party" so to speak, and just disparaging those inside.

    Cheers
     
  16. rdwinelover

    rdwinelover Formula Junior

    Feb 27, 2015
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    Buy a stockpile of gold and silver as a hedge.

    You can always line the trunk of your exotic garage queen with gold bars. ;)
     
  17. Splitting Atoms

    Splitting Atoms Formula 3

    Sep 18, 2011
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    The export ban was lifted with the new budget that just passed.
     
  18. paulchua

    paulchua Cat Herder
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    oh good! my hope is the cost of fracking continues to go down. One of the best things to happen to the US was energy self-reliance.

    Cheers
     
  19. ralfabco

    ralfabco Two Time F1 World Champ
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    I thought the buyers are different to some degree ?

    I (heard) the 1990's buyers were often investors.





    I also realize today's serious buyers often take into account the potential investment qualities from a collector car purchase.
     
  20. TooTimidAndCheap

    Jul 19, 2015
    105
    Not looking for a research project, just one anecdotal example.

    For a given car, can anyone remember the asking price
    1) price before the bubble
    2) price at peak of the bubble.
    3) price it crashed down to.

    I am specifically interested in comparing #1 and #3
     
  21. Peloton25

    Peloton25 F1 Veteran

    Jan 24, 2004
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    bamaman likes this.
  22. TooTimidAndCheap

    Jul 19, 2015
    105
    #97 TooTimidAndCheap, Dec 21, 2015
    Last edited: Dec 21, 2015
    ^^ Great prediction. Thanks. I'm hoping for an example of an "everyman" Ferrari, not the outlier holy grail that went from $13mm figs to $3mm. Ouch.
     
  23. ASK328

    ASK328 Formula 3
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    Insert "correction" as opposed to "crash"?
     
  24. lear60man

    lear60man Formula 3

    May 29, 2004
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    The Enzo Ferrari market was suppressed for a long time. If an 'adjustment' happens it will be in the 20% range.....not 2008 prices. I think Housing will also take a drop due to intrest rates but not a tumble as some have suggested. My clients are still charting private jets like no tomorrow.
     
  25. Themaven

    Themaven F1 Rookie

    Nov 2, 2014
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    Pre 1970s cars have nowhere to go now
    Some interesting value in some of the 70s and 80s eg certain BBs still. Others have overshot a bit, eg average condition Testas, 328 GTS
    The best 90s and 2000s cars have a way to go yet, but only the very best of the undervalued cars.
    In short, nobody's going to buy a Ferrari today and retire on it in 10 years and this is good, flushes out the debt financed speculators.
    But are all of our Ferraris all going to be worth a lot less in 10 years? Sorry, but no way.
     

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