Sheehan nailed this market cycle!

If you are looking to the car world as an investment, sometimes you get tired of the car, and upkeep before it goes up.

My Dad always told me to only "invest the amount you can afford to lose". So we always bought the Ferraris as drivers. We passed up a 288 GT0 John Apen had when they first came out. He also told us back when the modern Testarossa was selling at over $200,000 that they would one day drop under $100,000. Now that was just something I could not imagine at the time, and thought there is no way a ferrari will lose money. Then 1990 came around.
Everything dropped 50%, and the art market the huge names lost about 80%, warhol,Jasper Johns, DeKooning, it was a blood bath.

Even today I can only buy what I can afford, which was a 1998 550 Maranello in 2012, certainly did not see it ever going up past $75,000 to me it was just a cheap V12 to drive. And, the 1977 308 GT4 which I bought as a pure experiment. My plan was keep it a year then sell it , just to see. As I have never bought a car for an investment, so I started with the GT4 as a low production. Only 320 were made in 1977, and about 70 came to America. So we have a car in which only 70 are in the US from that year, and of those how many are in top shape like mine, maybe 10 , I don't know. But I will have to keep everyone posted when the numbers come in. I am excited, like Clint Eastwood said "In all the excitement , I kinda forgot myself, was it 5 or was it 6". So I am excited in a positive- negative way. to see what happens. I will know for myself. I just for the life of me can't see any regular F430 ever going up, they will still drop. But having said that. I plan on buying one when the Dino GT4 sells. But, it in a way rubs me wrong, as I made money on the 550 , by MISTAKE, and now I don't want to lose money. But I know the F430 will lose money, but it will also be fun to drive on the Tail of the Dragon.

So I will test the bubble in real time, and keep everyone posted. will a car that only 320 were made world wide be desirable, or........ was it just hyped up, or will the first mid engine road going Ferrari stay strong, flatline, or drop. I really don't know.

Stay Tuned.......... It is mint condition, so we will see if quality, somewhat rare, cheap Ferrari will do in this "Bubble".

Let the Games Begin, and wish me luck. I don't think it will go overnight, but .........

 

I get it. Because Ferraris are so damn expensive, us non-billionaires have to be careful with our money. Been there, but ain't doing it no mo.

The problem with the Ferrari market is "investors." You now, the guy who has **** me money and thinks spending big money on a Testarossa (the 80's version, not the race car) is a cool way to make a buck. The fact the car has serious design flaws, such as differentials that break, doesn't matter because he not going to drive it anyway.

Or, the New-World-Order Billionaire, who needs to find a way of getting money out of his country without going in front of a firing squad, that blows a few million on a PF coupe that, again, he will never drive.

Or even US Billionaires who keep $250 million in their emergency cash fund. Did you catch that? $250 MILLION in what amounts to a petty cash fund.

Bottom line, the Ferrari market is irrational, and the older the car, the more irrational it gets.

Another bottom line is these are just cars. They leak oil. They rust. If you don't know what you're doing, they're unsafe at any speed.

But do you know what is even more irrational? Trying to predict an irrational market. I'll never forget: I saw a psychiatrist on TV who was being interviewed about a serial killer., and He said, "You know, we used to try and figure out what makes these guys so crazy; but, then, we realized they're crazy."

Gotta hand it to the ol' man, he knew how to build brand, even before people understood what a brand was.

 

Wait. I'm confused. You said you made money on the 550. That means you sold it. If you didn't sell it, you haven't made a thing. In fact, you've only lost money. So if you sold it, is that you say "BIG MISTAKE?" Because I think it would be a big mistake to sell a Maranello. They're awesome cars.

 

It is like playing with House Money in Vega. I am up. Will I stay up in the 550 really don't care, I like the car. When I was looking there were some in the $50,000 Range. I could sell it for $80,000 and MAKE money. If it is only worth $45,000 then I have lost money.

Just like owning a stock, you are up and you are down. when do you cash out. I hope on the up side.

But, I cannot afford to play the collectible car game, I can only buy drivers.
According to the Ferrari registry there are only 3 in this color in North America. Mine on the east coast, one in texas and one on the west coast. 12 world wide. Rosso Barchetta. I have people on here asking me to just name a number...... but , I did not buy it to resale. That will come later when I am broke. Then I may take a loss....... only buy what you can afford to lose. When I bought the car, I thought if I throw this thing in the lake , I don't care it is just a $70,000 car. Big Deal. But now ...... I feel different, I really don't want it banged up. But do I quit taking it to the Tail of the Dragon........ Not Yet. It is just a car with a clutch, there are 3000 of these things out there. How rare and desirable can it be down the line.
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John, nice car. And I like your philosophy, a driver is the better choice. The cost of admission is lower, and you get to have fun down the line without wondering about whether there will be a pot of gold at the end.

Desirability will be good despite 3000 made. Look at the Dino production numbers vs valuations, of which many gurus said they would linger and never become wanted classics.

 

Okay, I guess you and I have different ideas of accounting.

You know, I just had this discussion in the owners section. I have some Ferraris I bought that I'm way "up" on, per your philosophy. But I have no plans to sell them and hope I never have to. I bought them because I love them. No less, no more. If the market does crash and my F40 becomes $600k again, I'll still be holding it. So the point is that if you buy it because you love it and won't sell it, what's its actual value? Well, its real dollar value is zero because that's the total financial return you will see on it, regardless of whatever paper gains you try to sell yourself on.

Moral of the story? If you buy it because you love it, the ONLY dollar figure that matters is the cash outlay. If you can afford that and get that amount of enjoyment from the car, you win.

 

I guess that's probably true. I have never even considered something like that. I've never done that with my house either but I guess people do that.

 

+1

Avoiding unnecessary debt is a good policy unless you have a really really sure-thing investment opportunity or there is a big emergency. This is how so many people get into financial trouble when the easy-money siren song beckons.

 

The problem with that strategy is finding those very low risk, high yielding investments. I can only seem to find one or the other.

 

Except when your car quadruples in $ value it becomes more of an asett, corrospondingly use and how you look at it changes.

Lots of people took their 150k F40s to the track, and really used them, in fact in the 90s we saw 288s at the track, now pretty much no one does. Of course a billionaire does not mind wrecking his f40, they can get another. But the person who bought one as a really fast fun car for 150k, for most the car is now above their pay grade or in another category, so it changes use, and therefore alters the value profile to them.

Or take a 1970 air cooled porche, maybe you bought one for 8K many years ago, now at 150K how you use and regard it has changed and that changes enjoyment profile.

The good part as others have said, is you can sell your quadruple value car and buy something far less expensive that may be more enjoyable to drive. Or you use your quadruple value car less, and less hard(as many "collectors" do) and buy something else to fill in the gap, it all depends on budget, garage space and how much effort you are prepared to expend on keeping how many cars.. But cars have changing $ value consequences in terms of ownership that are realized during ownership regardless of whether you sell or not.

Those of meerly comfortable means who place their greatest value on driving and use
as designed tend to lament rising values as it causes a brake in the types of use they are prepared to put their now very valuable asett through.

Those who view the cars primarily as iconic art, for limited drives use, with pride of ownership derived from the model/badge, tend to love escalating values.
Of course most of us fall into the grey areas inbetween.

 

Funny a friend of mine looking at a "depreciating" 458 spider or a currently less expensive Tr. I advised the Tr because regardless of the current market you just know somewhere int he next car cycle its appreciating. But in the end his choice is over whats going to be more fun for him to own and drive now, in my case that would probably still be TR, in his its still a 458. But then I also figure I can get the 458 5 years from now when they are more fully depreciated. Point is, besides your driving preference, your age, what other cars you own and timeline is a big factor in these decisions too.

Actualy for me, I am hoping that in a more rational market the new instant collectables loose their inflated leggs, because of the moderns the one I really hanker for is a speciale, just not at 450k, for that money there are too many multi choices.

We have not seen as beautiful a ferrari in decades as the 458, and if the 488 is any guide probably wont for sometime again. Its NA, and I like more intense cars. Its the 288 of this era, and maybe just like the market took several dips for 288s and f40s over the past 3 or so decades we will sometime see a reasonable speciale for 200-300K..

 

That's fundamentally incorrect. It's a transaction based statement, not a value based one.

If you bought it because you love it and you use it differently because you can't afford to replace it but you won't sell it because you love the car more than the money that would replace it, my original statement still stands. There is no transaction threshold.

If the price goes up to the point that you want to sell it, that's transaction based and therefore you consider that particular car an asset.

Again, if the price goes up and it makes you use it differently because you can't replace the car and you love it so much, it's not an asset; it's a member of the family.

Besides, who cares if you use it differently? There are all kinds of ways to love cars appropriately and 99% of them don't involve taking them to the track. That doesn't mean that you love it any less or you're any less of an owner.

 

You seem to define rules above like they are hard,a car can be an asett and a member of the family, road tool and an emotional possetion, there are lots of mixed reasons why one keeps a car and sells one. the guy who sold his high provenance GTO and bought the kroymans collectiuon including the GTO did agreat deal, he clearly valued the drive over market forces or emotion of one car.

Lets just say we enjoy our cars for different reasons, probably bought them for some different reasons and therefore how we ascribe value and value over time and the componants of value is different. Its not a hard computer program, although I get thats how you think, either or.

Nor one has to take a car to the track to use it as designed.

See some people think turning an origional ferrari can am car back into a p4 incresed its desireability becasue its now a more "beautiful and sucessful p4 and the change certainly increased its $$ value, I think it destroyed both. I think the change destroyed a period artifact, regardless of the $$ upside. However if that car had been turned in 1973 back into a P4 I might not have the same view because in 73 it was just an old race car not particularuily valuable or desireable, nor was it a period artifact then.

To me these cars(street ferraris) are primarily about driving as designed, on the road as and where you can, design and motor come tie for second. As they get older, your risk and awareness in terms of destroying something irreplaceable goes up, not only in terms of what its worth $ wise, also in terms of the dwindling numbers left and most importantly in terms of what specific car means to you. Yes in that sense its a member of the family, but its also still just metal and rubber with an $ value, there is an interplay of factors, its not all one or the other as you would imply.

So some of us who "can afford it" use it less or more sparingly because we want to preserve that car and or repect that vintage of car, we also respect the $$ value. Escalating values along with period of ownership, experinc e and design of the machine along with age of the machine puts the machine into a different category, nothing to do with what you can afford. Its an emotional and psychological view based on an interplay of a number of factors and those factors are not static.

On todays crappy roads with ****ty drivers and tons of cops are we more reluctant to use as designed, yes. Will insurance will buy me another one, sure, but it wont be that one and thats a factor too, but its not the only one. As I said there is an interplay of factors, how long have you had it, do you really love having it and driving it, it is still origional(virgin from factory), could you find another like it(less lilkely with time) and yes if you respect money regardless of wealth whats it worth. The value and origionality do affect use, acorss the entire spectrum, its the reason Nick Mason runs his GTO on track with "replacement engine and running gear) and other orig GTO owners run recreation GTOs with recreation data plates while the old one sits with its period pieces and value preserved in the garage.


None of which means last weekend at 6am the BBI didnt do a 90 min run or come close to Vmax because thats what its designed to do and thats what I always did with it. But I use it more sparingly and less often now because my interplay of values for the car has changed, and eys one of those values is it $ value. along with age origionality period of ownership and a whole host of other factors. Fortunatly I have other other more disposable machines to persue ultimate performance goals sio i dotn have to make an either or choice, and fortunatly I can afford financialy to wreck it, so when i do drive it I use it as designed.

Now if I didnt have other faster and more disposable cars, then my driving goals might mean that with the escalating values my best option would be a boxer sale so I can go where I want driving/car wise.

I think, based on when you bought, and the reasons why you have stated you bought most of your cars, you bought your cars as collector cars/ dream fulfillments for some fun use. From what you have said about your use it fits into value preservation and sparing asett to begin with.

Maybe you just started with most of your cars at valuable and collectable. If one of your cars did the transition from a cheap car bought for driving the wheels off to collectable, you might either alter use of the older car to more sparing, and if you couldnt afford other cars for the regular real hard core driving, you might have sold your financialy appreciated older car for something newer, more useable and disposable.

One of the great thing about appreciating older ferraris for real driving entusiasts is as value escalates and use becomes more sparing you can maybe afford to keep it but are way betetr off selling it to buy something more useable/disposable and better for driving, thats what many here apprently do, they are true driving enthusiasts and the ferrari world could use more of them..

 

Those two paragraphs contradict each other.

The issue is that you're confusing the love and appreciation of a car with the love and appreciation of certain ways of driving. Yes, they can go together but if you sell your 288 GTO to buy a 458 that you can use more, it's not the experience of the 288 GTO. A great many people would rather have a 288 GTO they drive on occasion than a 458 that they can flog anywhere, all the time. The 288 GTO experience is unreplicable, if that's a word. Fwiw, something like a 1973 Carrera RS driving experience is easily replicated by a top Porsche resto guru and that is why those cars are put away, a fake built, and the fake flogged non-stop.

If you bought a car only to drive at the track, well anything competent will do. If you bought a car for its unique driving experience that only that car possesses, nothing else will do. If you love it, there is no threshold at which you would sell it. That's my point. If you truly love a car then regardless of its value, only that particular car would do.

By the way, I think you are making a valid point but it's not a point about the car itself, which is what I was restricting the conversation to. Your point is about the driving activities and what's the best way to have all of those.

 

I feel like you guys are saying similar things- maybe from slightly different viewpoints.

I think the best statement is this one:

There seems to be this tension between those who just enjoy the physical object with supposedly no thought whatsoever of the financial side vs those who seem to only think about the financial side. I am sure there are those who fall into both camps but I am also sure there is a large number who fall somewhere in the middle. I have a feeling that's the majority of us. Lets face it, these are not insignificant investments for most of us. So the money matters. But on the other hand, I think the primary reason always has to be the love of the cars. And I've learned over the years that can be at the track or just looking at it in the garage. I don't think anyone should judge you so long as you feel the passion and can appreciate the car. As long as it makes you happy. I can tell you both really love your Ferraris. So that's all that counts in my book

 

Well said !!

 

Even on track its not just about competant(although to some that is the only measure) its also about experience, hence the birth of vintage racing or why Chris Harris loved the F40 so much more than the more competant F50. In that sense whether on or off track its not just about raw numbers, if it were we would all be driving the latest and greatest.

Rowan Atkinson did what 40k miles in his F1. From what I have read nothing else comes close to the F1 experience, in fact from what Rowan has written and I am paraphrasing, you could spend a lifetime exploring that car and still not know all it had. Yet for 11 million he sold it. The reasons he gave are after he wrecked it once and values were stratospheric he realized he wouldnt be using it as he had before, no longer exploring its limits, and he had had his time and experience with it. Think about what cars he could buy for say 5 million and pocket 6 million. In his book more utility, more pleasure and more use from the sale. It wasnt purely financial, the car after time could no longer do for him what it once had, because values and rarity had changed the equation limiting the fullness of use.

Would you keep one really valuable car that limited its use, or go for 5 other cars, even if each was not the same as the single f1. Me I dont think i would sell an F1, but if I couldnt afford to have any other car I might. I might sell the F1 get a carrera Gt, some newer Gt3, some older ferrari and who knows. I would probably have more driving fun with the 5 cars than the single one I used sparingly.

Part of "loving" a car for many is being able to use it to its limits, or on the road regularily and doing so often enough that mileage is not a barrier, that was Atkinsons use of his F1, time value mileage changed that equation for him. Yes part of the love is the design noise shape and experince that another model cant offer, your 288 analogy, but there is a balance of factors, and we balance differently.

Chris Harris says the F40 is "the" car to drive in your lifetime, but then he was comenting while excercising one to the limits on track. In the case of the F40 the full driving experince on that car is imo at the track or maybe somewhere in Eastern Europe. To the extent it makes no sense to track an older pristine car, put too many miles on it, and or drive it to the limits, you might still keep it because the money does not matter to you so you dont care about "limited" use, your enjoyment balance may come more from other factors than in extracting maximum go from that car. Alternatively someone might find that for $1mill they could buy 4 cars that cover more bases more of the time for some small asthetic loss or no asthetic loss. To the extent life is short I found once you hit your 50's the goal is to get of much of life experience in as possible, one really valuable car that sits too much in the garage may not be worth 5 that can really be used and enjoyed all around, dependign of course on your defintion of use.

I get that for most owners these days, their enjoyment from a F40 may be more towards the asthetic, just looking at it, driving somewhat cautiously at say 70% capacity to a cars and coffe etc. In that sense a curent owner might keep the F40 for a lifetime because this "limted" use still perfectly suits their desire and the iconic admiration for that car enhances their experience.

But if a major componant of or crucial componant of your enjoyment comes from teasing the car(particularily a sportscar) along the edge, getting full feedback from the machine, using it in anger, then escalating values may mean the car is less valuable to you, vs what else you could get with the money, assuming you had to make a choice.

I know one person who bought a 288 new, used to bring it to the track in the 90s, doesent now because of value. He keeps it becasue he loves it and its an appreciating asett he drives on occasion, however he has said that if he needed the money to buy some less expensive more useful cars(to him) it would go.

As to whether something new/digital can replicate or subsitute the older car experience on or off track, you make a great point and argualby not, eitehr to drive or astheticaly, although the 458 is no slouch asthticaly. Yes a modern car can be faster on track, but it may well not offer the fullness of the older car experience, thats why vintage racing was born even in the 70s when it wasnt money thing but a pure experience thing. Its why the old lady at LRP with a real GTO who just finished a vintage race told me she bought it in 65(when it was regarded as old and crappy) instead of a then new corvette. Its also why recreations(not kit cars or fakes) are so popular now and gaining in popularity, because many people want the "full" driving and asthetic experince of an older car and dont care really about the show or value part of the equation, nor do they want to worry about destroying an artifact.

These days as you rightfully point out, there is a very big dividing line between anologue and digital car experiences, its actualy a chasm porche 911R excepted.

To use your aircooled porche example, if one owned a careera Rs bought for say 50K way back when, and you enjoyed really really using that car, on and off track as intended. Then practicaly the options are to keep the Rs pristine(or for the ocasional historic race) and build a clone for hard core use(which many do) if one can afford to do such, or cash in the 600K and buy a number of cars including a great Rs clone. I think these days real Rs carrerras mostly have different use compared to before they became so valuable, even for those who can afford it. Same reason 1/3 of Gt40s at Goodwood are recreations, and 1/3 of "orgional" Gt40s are driven like old ladies. Value and history affects use. Ability to extract full performance and asthetics are componants of desire.

As you said lots of reasons why people own cars, many varaiations on why and how they use and enjoy them. Its these non static factors (of which one is value) which indicate how they are driven and why/when they are kept or sold. But yes you do raise the point that to the extent asthtics are a major factor a F40 or 288 may have no substitutes.

You are absolutely correct a modern cant offer what an older car can, the modern experience is somethign different. But for enough $$$ there are plenty of really good substitutes which may offer more enjoyment/experience dependign on how you use your cars and how much of a factor individual asthetics counts vs use, thats why Rowan sold his F1.

In my case I considered selling the BBI for the offered 400k and getting a 997 Gt3, euro 308Gt4 or Tr, and a bently. But in the end, yes I love the car, and I have others to play with, so more cars wouldnt really add to my experience, and like you with some of your cars I cant think of a substitute that fills that asthetic niche for me.. But would I trade the BBI for somethign else at some point in the future, depends on what it is and where I am at.

 

True, thats the beauty of this car thing, its a passion.

 

Back to our regularily scehduled program. I went through Ferraris for sale on Ebay, to me what counts are bids not asking prices. Even on asking prices soe peopel seem to have gotten reality while others are still reaching.

Nice 308Qvs seem now to be between 50-60K, not 85-100K. The bloom seesm of single mirror Trs, there are decent looking ones with asks in the high 100's not 300k or whatever people dreamt.

Decent Trs seem to be heading back towards 100k.

550s are in the low 100's

Plenty of Bbs with asks in the 3-400k range no bids.

 

a low mile TR sold this weekend at auction for 179k sterling

 

and a really low mile 4k one sold at the greenwich auction10 days ago for $159K.

Low to no mileage cars are in their own orbit, and even then there has been a clear price erosion.

 

those cars were 50k a few years ago no?
seems relevant given the title of the thread. I'm not one of those dilution via verbosity guys.

 

No one is disputing what the value was in 2012, nor does sheehan. The point is there was a market peak and a continual rise and we are now well off the peak, and prices continue to drop as inventory sits. I think thats relevant to the title of the thread, which refers to a cycle..

Enjoy your "collection"