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How will the art market meltdown affect collector Ferrari cars?

Discussion in 'Vintage Ferrari Market' started by Platini 289, Feb 7, 2016.

  1. energy88

    energy88 F1 World Champ
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    Exactly! This is known as diversification or "not putting all your eggs in one basket." I expect that persons who have accumulated enough in life to afford a Ferrari(s) comprehend this principle completely.
     
  2. Super_Dave

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    Realize not in response to my post but I would not categorically say these markets are completely uncorrelated. It all comes down to the time horizon, and magnitude of swings.

    They have limited positive correlation over certain periods of time (can't lump everything you listed), sometimes have negative correlation, and sometimes (often) zero correlation. Sometimes, they can be correlated, and severely-so, for logical reasons.

    If they had no correlation at all, then we could have seen classic car prices remain flat over the past six years as the DOW rallied from a low point (that coincided with low car price too). Then I would say that a rotation into cars may make a whole lot of sense now, particularly for diversification.

    That is through the lens of an investor. As an enthusiast, it will come down a whole other slew of factors (biggest = how much I want / like the car, then the usual mix of affordability, willingness to buy today vs. tomorrow, do I care about a potentially depreciating vs. appreciating car etc).

    People viewed houses as solid investments in the U.S. leading right up to the crash in 08/09. Some other markets still view them as very safe "i.e., safe as houses" but if someone told me Vancouver or SF property was some great investment today as a diversification play, well... good luck to them but I think there are better ways to diversify, including into that asset class.

    The art market holds great analogies to the classic car market with one major exception -- it is an established, long-term market. We didn't see specific targeting of this market as a wholly new market, over the past several years. Or maybe we did, but I doubt to the extent of what has happened with cars.

    It is marginal buyers as a group that drive prices up. It is easy to see the cycle of hype give way to the opposite tone. When that swings, those marginal buyers start to leave the game, fast, and dealers need to unwind inventory builds.
     
  3. Super_Dave

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    Will defer to those more in the know as like I said earlier in the thread, I don't follow this market other than headlines. The headlines seem bad, and anecdotes too, but perhaps they are the ones off.

    I do follow NYC real estate closely and can say the high end in this market has lost its luster, and very quickly. It is yet another of those "store your $$$" markets that seem to underpin so many of the assets that rapidly inflated.

    Seems a poor approach to figuring out the worth of something and more akin to the very opposite of "smart money" but what do I know? I do know that this has happened many times in the past, however, and never with sustained results.
     
  4. paulchua

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    #80 paulchua, Feb 22, 2016
    Last edited: Feb 22, 2016
    It's nasty for sure, but once again the troll plays the victim, here SD facetiously insults my car. (sigh)

    Some advice to all that want to come to SDs defense: take a look at his history, you'll find that he's racked up more than 30+ individual members' disdain for a history of trolling and arrogant proclamations (often in contradistinction to earlier assertions.) Here is 20 for a start (these are 20 posts even before I even knew SD existed btw)
    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

    As much as he tries to paint himself as some 'victim' he is nothing but, actually the perfect troll is one that can poke people in the eyes, and convince others he's the one being trolled. SD, I got to hand it to you, you do have *that* down.

    hmmm, 27% drop and four years until recovery (excuse me) is *nearly* unscathed? (exuse me, not just "unscathed") Wow - talk about semantic gymnastics.

    Remember SD, I'm hard on you because *you* said you're an expert on markets remember?

    I do agree with you on some things, though. Yes, a good economy/general market will have a positive effect on other markets (wow, what an insight??!!!)

    Yes, economies have natural booms/busts, with recessions happening quite regularly, so in our current expansion, we are due (wow, again - this is some genius forecasting, every cycle has it's end and downturn? really? I didn't know that.)

    Yes, if I had the means or desire (neither which I have, unlike the many times you say you do however with your billionaire friends, or lottery winnings, or black magic) now probably is not the most prudent time for speculation into a high-end collectible Ferrari (Wow - you guys should give an award to me for groundbreaking economic scholarship)
     
  5. paulchua

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    Again, the troll back peddles, spends months telling people he is an expert in different markets...now he's saying "what do I know?"

    I guess this should answer your question SD, and why I keep calling you out. Just a suggestion, think before you post. If you are going to post as an 'expert' on any subject, and not prepared to back up your assertions, why keep doing so? Or worse, get angry at the people calling out your outlandish claims. (most recent: "NYC did not get affected by the 08 crash") - oh wait excuse me, NYC 'nearly' was not affected. haha

    As ttforcefed said, you're not the smartest guy in the room (even with your 2 graduate degrees from the Ivy League and your billionaire friends; which you've yet felt comfortable to disclose btw)

    Everytime SD posts, I can't help but be reminded of this guy.
     
  6. Enigma Racing

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    Agreed. You need lots of Monet to buy Degas to make the van Gogh
     
  7. nis1973

    nis1973 Formula Junior

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    Funny!
     
  8. Super_Dave

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    Hah.

    Unless of course you Vinci the Lotto
     
  9. paulchua

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    #85 paulchua, Feb 23, 2016
    Last edited by a moderator: Sep 7, 2017
    Awesome - this is great - never heard that one before!

    (cringe and wince, but not surprised...)

    Let me explain SD, you need lots of Monet (money) to buy Degas (the gas) to make the Van Gogh (van go) ..

    For somebody that comes here and brags they are part of the upper 1% with two graduate degrees from Ivy League institutions, an expert in markets, claim you are winner of the lottery, and on top of all that is a self-made financier with that hobnobs with your billionaire friends; it seems amazing to me you missed that on several levels?
    Image Unavailable, Please Login
     
  10. Super_Dave

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    Paul, I am only responding to your post because I found it truly amusing and ironic that you are calling me out for not getting a joke, when you are the one missing it. I truly hope, for your own sake, this is yet another misread on your part (okay, pretty much every post you've done that criticizes my math or anything else, falls into this category).

    Both Lotto and Vinci are clear references to Italian Renaissance artists. I clearly understood his joke and came up with a much worse one, off the cuff, but still in the same vein.

    Leonardo Da Vinci, where Vinci also means "win" in Italian (one of 4 languages I speak, if we're keeping track on my arrogance) and Lorenzo Lotto.

    Please just stop calling me out in every, single post. Not only is it incredibly juvenile, but I am now getting embarrassed FOR you.

     
  11. paulchua

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    #87 paulchua, Feb 23, 2016
    Last edited: Feb 23, 2016
    (sigh) no...I got you...it's just your 'joke' made as much a sense as this: "yup, like a bad self portrait of Francesco Michetti..."
     
  12. Super_Dave

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    I know you didn't get it Paul. That is okay. Really.
     
  13. paulchua

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    Super_Dave,

    Here is the same peace offering I offer BW. I will stop as long as you start to substantiate your claims. That's pretty much all I ask.

    If you make claim X, don't get pissed off when I ask for you to prove it? Pretty fair?

    What do you think? I give you my word of honor, as long as you substantiate any claim you make from this day forward, I will chill.

    Fair Deal?
     
  14. Super_Dave

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    Based on your past behavior your word is worth nothing, Paul, and I owe you nothing.

    What you offer is an ultimatum in advance of a "truce", not a truce. I have not been harassing you (or others) and I fully anticipate you won't hold up your end of any bargain anyways. What you are saying is that you will stop acting like an ignorant child, posting false, misleading posts, in any thread I post in, while attacking anything I say with your own misinterpretations of linked "evidence" as support.

    Because I have not been on some offensive against you, what you are proposing doesn't come close to resembling a truce.

    If, however, you propose putting me on ignore, so that we no longer intentionally ever cross paths on here again, I think that is something I can live with and will be to the benefit of this entire community.
     
  15. paulchua

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    #91 paulchua, Feb 23, 2016
    Last edited: Feb 23, 2016
    You're right, you don't owe me anything, but this is a forum correct? Where opinions are to be exchanged? What is a forum worth if one is not allowed to question OR back up an assertion? If I say X, and somebody asks me to back X up, what does it say about my character if I don't?

    That's is the crux of the issue here SD, you've consistently made *very bold* claims, and when initially asked fairly and courteously to prove claim X, you do not...after a while it enters the realm of comic relief, and that is why the moderators have turned a blind eye, because after repeated 'no-shows' one can only assume either you are in the witness protection program or a habitual liar.

    It's pretty much as simple as that. I'm willing to stop attacking you when you start substantiating your bold assertions (the latest being NYC(Manhatten) was *nearly* unscathed during real estate meltdown) - I show charts and data (from the Fed no less) that run counter to it (unless you think a 20+% drop is 'nearly' unscathed) - and you get mad at me and call me a troll.

    This is a forum where ideas are exchanged is it not? (yes even strongly)
     
  16. 166&456

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    #92 166&456, Feb 23, 2016
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    Wow. Amazing.
    Also item 04 in that list of articles is interesting, as I think there are two extra factors at play and this illustrates my thinking, its up my alley if you will. First, the concerted effort of central banks and governments to curb cash money (a big mistake if we let that happen imho). And second, it is not just the yuan, it is also the Euro that in my view is in serious peril of (further) devaluation. Dollar denominated assets will probably still be OK for now.
    A third one may be that banks (like JPM) today are not looking very solid - again.
    Assets that are relatively mobile and independent of currency - like art, cars etc - will all be sought after for some time to come as the world slowly becomes a less stable place.
     
  17. energy88

    energy88 F1 World Champ
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    Gentlemen:

    TRUCE!!!

    This is beginning to be like watching talking heads on Financial TV. In the end, the viewer must make up their own mind on which view to believe.

    I concur with Paul's point that it is nice to back up statements with reasons or data. For example, my background has been in the Oil & Gas industry for 35+ years and some of the talking heads on TV stating without reservation where oil prices are headed next makes me cringe. Most are just opinions or spouting off or gaming the market. I particularly listen for reasons or newly emerging data to support the stated opinion. Some of the stated reasons I can easily dismiss from experience, or know it to be a one-in-a-million possibility, and sometimes an analyst presents original thinking not considered before but within the realm of possibility. In the end, I am free to accept or reject the analyst views and develop my own opinion of the direction of the oil market.

    Paul presented FRED data challenging Dave's statement that the NYC real estate market remained largely unscathed following the 2008 financial crisis. However, I'm not sure that FRED data properly addressed the NYC market as raised by nis1973 (Post #64). My interpretation of the FRED data (Post #69) was that the drop in value was indeed on the order of 27% as Paul stated; however, the drop occurred over 5 years over the graph which averaged out to a little over a 5% drop per year (more of a change in trend than a crash).

    In an effort to validate Dave's point of view, I utilized StreetEasy data (Zillow) on the NYC Condo market:

    Manhattan Condo Price Index (CPI) | StreetEasy

    That data showed a drop of 20% over 2 years (average 10% per year) and then gradual recovery to old levels by 2013. Thus, Dave's statement that the NYC market did not get that bad is mostly true in my opinion. I believe this is a case of seeing the glass as half full or half empty.

    I believe Dave brings a lot of original thinking to the table on markets and FChat members are free to accept or dismiss his views. Remember, sometimes the truth hurts and forewarned is forearmed. There is no need to be uncivil. After all, the nature of most markets is to do something surprising that no one has fully anticipated.

    Peace!
     
  18. paulchua

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    Thanks John, you make some very valid points. Thanks for posting and being peacemaker I'm all on board. My only ask is if SD makes bold proclamations, I will ask respectfully for *proof* and or substantiation, that's all.

    If he makes claim X, my only ask is he provide proof of that claim; if so; I promise, I'll shut up. Also getting angry when asked respectfully and repeatedly ignoring valid questions is not my idea of being civil.

    Otherwise, I will continue to call him out as a bold faced liar that uses these boards to troll and play victim when people call him out.
     
  19. davemqv

    davemqv F1 Rookie

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    For what it's worth, as someone who works in the art world, there hasn't been an "art world meltdown". That gets floated annually along with the "death of painting". Art world is doing just fine.
     
  20. nis1973

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    Paul, SD is not the only one making bold proclamations. There are easily hundreds of posts on this forum that boldly state that ABC car will be worth X dollars by spring, and five times as much in ten years (or that it must have surely already sold at some other record price). Most of these are merely a speculation backed by little more than the poster's passion. I do find some of what SD posts interesting but I'll agree with you that he often does it with a sense of superiority that is at best annoying. You are completely justified in calling him out on that. I think you are diminishing your point, however, by doggedly confronting every single post he makes and trying to impose standards on him that many of us don't always live by.
     
  21. ttforcefed

    ttforcefed F1 World Champ
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    nis this pompous pontification has been going on for over a year - go see threads that I posted in from q1 2015. SD wants to gain credibility? very simple - reveal and prove that he has the ivy league degrees he claims and show us proof of what cars, if any, he owns. all fair game considering these are things he has claimed. prove that he actually worked on a real trading desk, and not some back office paper pusher. simple stuff.
     
  22. paulchua

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    This is a very well written post, and I cannot deny the wisdom of it. Appreciate your words advising temperance. Thank you.
     
  23. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3
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    Interesting to note your last two sentences. It would seem to me that any post GFC systemic changes have been watered down in the quest of continued bank profits. Would be interested to know what sort of financial correction would be required to actually bring enough demand for any form of real change to the banking industry, maybe a 1929 style depression?. I note that Goldman Sachs made a significant Hillary Clinton donation so maybe that change is going to be ever more deferred........ Regardless of change to the system, society changes and that may be the greatest risk to the Ferrari market. Would be interested to have your input.
     
  24. paulchua

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    Thanks Dave for your input. Every art dealer has given me this advice that I'm sure you know all too well: "Buy what you like, that way you'll never be disappointed"

    :)

    Cheers and be well.
     

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