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Discussion in 'FF/GTC4Lusso/F12/812S' started by FFantastic, Feb 24, 2020.
If they build more cars than demand which is what all public companies do, they will have to discount them from the showrooms and that cuts the value of the cars already owned. It will make it easier for some people to obtain a newer Ferrari instead of buying a 10 year old one. It will be very unpleasant to by new at MSRP and sell a year later. Certainly the flipper game is dead no more used cars selling for over MSRP.
Big read? More like The Big Bore.
What I did manage to read (before losing interest) was drivel and completely misses the point, despite the author claiming to be passionate about the cars and understand the brand.
The moment he starts to juxtapose Ferrari with Tesla, I know immediately that he doesn’t understand the brand or its consumers.
And with a straight face (pen?) he claims that Ferrari stock is overpriced - let’s not mention the Tesla valuation shall we?
And as for softening residuals as an indicator of brand damage? We’ve been here before (in the 90s). It wasn’t a sign of the brand’s demise then any more than it is now.
Save your time folks and don’t bother to waste your life with this garbage.
For the short term I believe Ferrari will be able to sell as many cars as they want at MSRP. Once the secondary market begins to reflect the “oversupply” the financial pain to upgrade to the next model will eventually become to much to absorb for some. At that point it will be interesting to see how Ferrari responds.
Add to this the increased number of exotics available and you will see additional downward pressure on the secondary market. Also it will require Ferrari to offer compelling models to command their pricing strategy. To me they will be unable to “dress up” a 10 year old platform and expect financial success (ie F8).
I agree the majority of the article appeared to be overstated garbage; however, some of it does ring true to me. Namely, the secondary market is starting to look like a very interesting proposition going forward. There will be numerous cars for sale, with all sorts of colors and options, and deeply discounted to new pricing (especially as they are raising new prices). If you are not hell bent on a very special color combo, or TM-type specifications there will be great pickings in the future.
I spend some time on seeking alpha for some technology investments I own. I want to comment about the source of the article:
Seeking Alpha will let anyone post anything. Sometimes the authors are great, super knowledgeable, respected, common to business publications like Forbes or similar. But sometimes for some authors, it's their first article and they're really off base or get a call exactly wrong.. The point is there is very little filtering. Their business is to drive advertising revenue and . The good news about the internet is now everyone is a publisher. The bad news now is near anyone can say near anything.
I've never seen this author before, but he is clearly short biased (against Ferrari's future): "Disclosure: I am/we are short RACE." Who knows, he may be right, but he is just another guy with an opinion.
One thing I can say for sure, if it takes you more than a few screens to explain your view, then you are trying to convince yourself more than your readers.
Basically he's advocating the sale of RACE. I don't disagree with that, but the same holds true for most stocks in the short and near term at the least.
He makes some points and a few of his points clearly miss the mark. Although I just read the salient points, the article was way too long.
why don’t they have to put the disclosure at the beginning of the article? No wonder they write such long articles full of crap
I found the article interesting. But ultimately, my reaction is he is trying to justify his disappointment that they are changing the game. I can understand it, but thats life.
While there is much to disagree with in the article, it is an undeniable fact that scarcity has played a large part in the perceived value of these cars. The changes in production volumes/corporate strategy have eroded this scarcity, and I find it difficult to imagine that this will not have an effect on value. Whether that effect is large or small remains to be seen, but I wager that we will see softer values going forward.
IMHO, the author is selectively comparing apples and oranges in his thesis.
One apples to apples comparison would be Ferrari to the diamond cartel by putting a thumb on the supply/demand balance.
Comparing Ferrari to Tesla is a bit of a stretch. Tesla is an appliance, like a refrigerator or a stove. The author presents a Hagerty price graph showing where a late Ferrari "special" model has recently lost value. But other exclusive ICE vehicles have held their value in over the same time frame. I cite the 2011-2012 Lexus LFA which is still going strong and the Hagerty graph shows a perfectly horizontal value line. What the author does not address is that there are no Teslas in the Hagerty value data base, not even a single one including the very first roadster.
He’s short on the stock and wants a narrative to support it. Some fair points but mainly...meh
Am hoping this guy's short position gets crushed by the stock. His predictions are ridiculously negative. But some of the points he uses to support his main thesis are simple true/false propositions.
Is the Pista appreciation less than was promised to the guy who had no choice but to buy a Lusso? My dealer telling me he can get me a Pista coupe at below MSRP, so yes.
Are there brand new 812's sitting around in showrooms because guys who don't want them were told they had to buy the GTB in order to get the GTS? There are three in mine with no miles, one of them a 2020.
Can a non-owner with no profile walk up to a dealer and buy a top of the line 812? I suspect yes.
Will the appreciation on the next GTO be far less than that of the TdF? If S.p.A. is determined to capture most of the margin (hence US$1M MSRP), then yes.
Are dealer margins evaporating? Impossible for the non-dealer owner to know but I suspect margins are getting squeezed every year.
Where is the 2020 located? Is it one that someone backed out of? I think the allocation for the 812 isn't hard to get now. I got one in January and it's on the ship headed for the US now. I am not an important customer but do have a little history. This 812 is my fourth, all new but the 812 is the first one I ordered.
Denial is not a river in Egypt.
since the publication of the article, Tesla is down 25.7%. Ferrari is down 13.8%.
Relevance to the topic ? None.
The article contains points which we definitively see in the market, for instance with the much higher number of "special series" being produced.
Overall I must say that I am concerned about the direction that Ferrari is taking. The exclusivity of the brand gets diluted and residual value drops.
And every major exchange worldwide is down 10%-15%. I believe they call it the Corona effect. Be serious.
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Far more markets and wealthy people in the world today vs other era's. Ferrari can produce and sell more cars as demand is so much higher. I don't see the problem...
I found that Article excellent - neatly encapsulated most I see first hand and read on here. Having worked in finance for years I find the analysts are very weak and no surprise to see them way off the pace here again.
Not sure about prospects for RACE per se but clearly the era 2007/17 approx was the dream era for cost effective Ferrari ownership if in good standing with your dealer and Ferrari.
I am serious
if you want to bring COVID-19 into the discussion, then Ferrari is down in-line with the Italian index and Tesla is underperforming the US indices.
Either way, the author’s short position is not working.
For those of you naive enough to think that the article was really about Ferrari brand equity, think again. You’ve fallen for a pump and dump scam.
The kind of practice this guy is involved in would be illegal if he had any securities registration. The fact that he’s a ‘journalist’ means he can get away with it.
Sadly Italy is now Europe's number one country with coronavirus cases and the effect this epidemic is having on the country's economy is quite dramatic. Recently we learned that Maranello's plant was partially stopped, with some of the personnel sent home. That will certainly have an effect on the number of Ferrraris that will be produced during 2020. If Ferrari production numbers fall the immediate negative consequence is the delay of deliveries. That will make many buyers unhappy because their long wait will get even longer. However, less new Ferraris being produced and delivered will be good news for exclusivity and the second hand market. I'm thinking about the 99 Ferraris 812's SF, some with very little mileage, that have been for sale in continental Europe for quite sometime.
There are 47 812s on Auto trader in the UK and at least a handful of others not on AT but sitting at dealers. Average price £280 There are 19 V12 Lusso in comparison and 12 Pistas from £330k with no miles.
Although the article rambles on a bit and draws some dubious comparisons in my opinion there are some very valid points to suggest the era of making a profit out of what should really be an indulgent pleasure is over.
Right, that's the bright side of it for current owners. Better trade in and maybe better holding of value when you make the next exchange. I wouldn't think they will lose more than 1000 cars total for they year though.