is the bubble due to burst?

I think what you are seeing has more to do with this:

http://www.ferrarichat.com/forum/144885258-post310.html

 

Again, I go back to what Tom Shaughnessy told me over 10 years ago. Namely, vintage collector things, including Ferraris, lag the real estate market, e.g., Japan in the late '80s. When real estate is up, people feel good. When it's not, they don't. I think the deeper point is the collector market follows the broader market. So if you want to predict vintage Ferrari prices, I suggest you look around. Good luck!

 

it's time to drag out a Ouiga board that has never failed... create a chart with a large X in the middle... label one slope supply and the other demand... then proceed to fill in the variables, with one axis labeled price and the other volume... viola the answers will magically appear it works with actual data or with hypotheticals

 

Oh good points. I was just thinking to look in general since a lot of generalities discussed here. Thats a 31% reduction in lots.

 

i'd like to see a thread on these types of threads....

my home state of MI is buying shares in TSLA. i'm short. i think it is overvalued. i don't feel the need to make my case to anyone. in fact, is it not better for me to "let" the buyers be fooled and drive the stock to a higher over valuation ?

 

Theres no sour grapes, I sold my Boxer for a fat profit bought a Diablo which is a cooler faster car.

I am just shaking my head at the irrational exuberence of the justification of these crazy prices.

Those that dont think the market can fall 70% thats why these prices are up this high for regular cars, the Real Estate market in ares such as Vegas has taken these hits and were talking dirt property not cars which some though clearly not here would think a better investment and more solid.

At least I got out of this thread whats going on in peoples heads why these absurd prices, I can afford to buy but a 50% hit is a little too much for my ego.

Ponzi scheme prices artifically manipulated up till there are no more fools to buy higher then it crashes down. First began with Tulips history repeats and human nature has not changed in 500 years.

 

i'd praise to allah if we could see 300k f40s again

 

The very rare cars in high demand won't happen there you are into a category of very wealthy that the ups and downs of the economy doesn't effect they rarely need to sell

 

Good luck with that. The supply side will be relatively easy, e.g., aging owners like Jon Shirley selling his cars. The demand side is another story. You have buyers who are car guys, along with scared money looking for any kind of safe harbor, i.e., people who could care less whether they buy a car or a painting.

 

I disagree. Which isn't to say I am right and you are 100% wrong and an idiot etc... etc...

It just takes acceptance. Thats all. You cant forget that people don't have to sell. These aren't all no reserve auctions. People will choose to hold and as long as they do... that sets a market price. Picassos are in no risck of becoming 20k dollar items

 

All else being equal with the world we live in today, if F40s became $300k again I would add a second to my collection in a heartbeat.

I said before that it's expected that prices will go down. However, there will not be some crash to 60% across the board as others have said. Besides, if you're buying something because you love it, how much does the price truly affect you?

The value of a car is a very abstract part of the car itself. You can't drive the price on a beautiful day. You can't lovingly wash and clean the price. You certainly can't go out to your garage and stare at the price for hours. I think I've made my point.

 

The one thing I think alot of people underestimate is this is a global thing. Not just American. There are regions of the world that are becoming wealthy and you know what they want? Cars. There are new markets opening up and becoming wealthier every single year. There are some countries that have banned the import of cars older than 2008... and when they lift that ban... a whole new market emerges. Thats what happened to alot of muscle cars post crash. They went to australia because australia said you didn't have to convert them to RHD... I/we/people sold so many mustangs to people in australia that really mustangs in america are ALMOST becoming scarce because so many have left the country.

Also the scarier global markets get... I think people turn to high end collectible cars as a place to stash money in something physical

 

rub it in.......

short of nuclear war i dont see how they drop to $300k again.

 

Well, what about, you know, a few flash bangs, nothing nuclear, just enough to close the Persian/Arab gulf for a month or so?

 

Yep. It is clear the Chinese were the ones driving the art market up. They were buying stuff that had no meaning to them, just what their advisers said would be a great safe harbor. I dunno if the Chinese were involved in buying Ferraris, but it illustrates the point it's a big wide world out there.

 

i dont even think thatll do it

but my checkbook is ready

 

I mostly follow the art market but still keep track of the car market even though I am no longer really actively in it. What I have seen acrossed the board in art,cars and other luxury markets in the last 20 years is the hollowing out of the middle of the market due to the aging and decline of the middle class. Low end things doing ok. Middle markets are hard to sell and declines from 2005 are steep. The best of the best still sells for big money. I see a generational shift from the pack rat mentality of the WWII generation and their kids the boomers to a younger generation that is more into experienced based spending verses material possession spending. Of the 10 young wealthy people I know under 50 they live in modest homes with maybe one or 2 nice pieces of art, leased luxury cars and they travel the world about 50% of the time. ( All of them have spent the summer traveling overseas). All of these people have no desire for multiple homes, cars or large collections and they lack the social status they once had. Material possessions take time and interest. Value is added to items with high social status with an informed society. With a less informed society the social status of owning an 18th Century painting by Bouche or a drawing by Hogarth loses appeal as your social peer group does not know what these things are. They do know that you just spent the summer in Siberia and are now in Bali on a meditation retreat then off to Ocala in the winter for some horseback riding. Rare Ferrari's will still hold their value but I see the middle market cars soon selling for 1/2 the cost of restoration.

 

Interesting perspective. I don't agree with nessecarily all of it... but I really love hearing your experience. I think there are some good points to what you wrote.

my questions is what do you consider the middle market cars?

 

IMHO in 20-25 years from now, I'm betting only a select few will even consider owning a gas powered car, no matter what it may be.

Our kids (although very aware of cars because they grew up with gear head dads) may have a slight interest, but not enough to pony up 1 million for an under performing gas guzzling polluting car when they get to be our age. Times change and change fast. I hope I'm wrong.

Just look at the new battery update for the Tesla Model S. With the new battery and a computer update, that 4 door family hauler can accelerate to 60mph in 2.5 seconds. Thats faster then the Porsche 918..and LaFerrari which costs over 1 million.

 

Middle market- Jaguar, Porsche 911, Vette ect., 50's American Cars, Ferrari 308, Mondials ect

Any coach built French or Italian car will do OK. You are not going to see people build huge collections like Ralph Lauren ect In the past a lot of wealth and collections were build by people that stayed in their city running the business they owned. Todays wealthy travel more and can do the management of their wealth anywhere in the world. Why have a bunch of stuff if you are never home. In today's life we are dematerializing. Your books are on kindle, family photos on the cloud. Networks of professional contacts are world wide. If you have a diner party it will be at a restaurant and not at your home. Why have a home filled with art and fine furniture if no one comes over and your are hardly ever there. ( I sold my house in main line Philly and my 2 beach condos in the last two years as they were just a pain to deal with. My farm in GA is enough to deal with. I should have sold the 18th century furniture 20 years ago. I got 1/2 of what it was worth in 1995) Classic cars are just another thing to deal with. Most young wealthy people do not want the obligation. What fun is it when you want to go for a drive and the car will not start again. The world is changing.

Any one on here in the high end jewelry market? Have you seen similar declines in the middle of the market

 

Ya... but kids still love "vintage" clothing...

I can have a picasso on my wall and change it to a divinci or whatever with a Flat panel LED or whatever kind of display

A vintage Rolex is infinitely more valuable than an apple watch.

A 250 GTO is not as comfortable nor as fast as a 288 gto... or a 599 gto... A 599xx is much faster around a track than a 250 GTO and yet is worth an incredible amount of money.

 

My guess is as things truly go digital, there will be an URGE to own a high end collectible sports cars for the EXPERIENCE alone. The worlds big, getting bigger, getting richer and in the aggregate more people not less people will be into these stinky old cars. Dont forget inflation, which will be coming in a big way in the next 20 years. Thats another reason why rich people buy cars they understand hard assets and dont like to look just at stocks/bonds all day. Acquire good assets when the money is cheap and hold on long term to see the reward. Youll see what happens to currencies over the long term. Value of money is always in decline.

Everything has risks. Rare sports cars are important historical items. But in truth, some cars are not worthy of the values being paid today. And I would argue some are still cheap in todays environment. Nothing goes up forever and if you believe that, your a fool tobegin with.

Enjoy what you have, cherish it and keep it in good condition and over the extended term it should work out.

 

What is this experience you speak of. Storage fees, Insurance that covers only parades and shows. I have owned 9 fantastic vintage cars at one time and I was one of the few people in my car guys group that drove/raced their cars. Most of these high end cars spend 99% of the time in the garage. I think the functional utility of driving these cars in todays traffic is greatly diminished from what it was 20-30 even 40 years ago ( I am 58 and been into these cars with my dad since the early 70's).

 

I'm not in that industry but reporting shows there is a downturn.

Hard Times for Luxury-Watch Dealers - WSJ

http://www.watch-insider.com/wp-content/uploads/2016/02/comm_160101_a.jpeg

 

Yup... yet... they are still collected prized and taken care of.

Art doesn't do anything but sit on a wall. My 2 year old can draw pictures and I can hang it on the wall too...

one of the original prints of the declaration of independence is just a piece of paper with writing. A gutenberg bible can be replaced by another bible. And you would never handle that with bare hands etc...





collectibles are just that... collectible.