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Who was there in 1989-1990?

Discussion in 'Vintage Ferrari Market' started by Smiles, Aug 16, 2017.

  1. Smiles

    Smiles Moderator
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    Nov 20, 2003
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    Matt F
    It seems similar to me on many fronts.

    But I want to know who went through the era of Jaguar suing its customers over XK220s and who didn't.

    Post here if you remember the crash. And if you got burnt.

    Matt
     
  2. 166&456

    166&456 Formula 3

    Jul 13, 2010
    1,720
    Amsterdam
    I remember it, was very young back then but did do some research into it. My take on it is that it was really a big market oscillation up then down. The valuations went through the roof because a lot of people made a lot of money in the stock and RE markets in the years prior. The trigger to the leg up was a complex of market nervousness from the 1987 crash which made people nervous to stocks followed by the Japan RE crash (before the crash Tokyo RE was at 36k$ per sq meter... In 1988!). It led to a scramble for other assets, and of course news spread quickly and the classic Ferrari market was very thin. The period in which it happened, both up and back down was only a couple years, prices normalized and resumed the steady uptrend they had in the years leading up to the swing.
    It's funny how the 1987 crash is still famous to this day. Look it up in historical graphs of the stock markets, you'll have difficulty finding it.
     
  3. Lotaz

    Lotaz Formula 3

    Nov 18, 2016
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    Wow I did find some limited information on Jag suing customers. Even though I was 26 or so in those days I don't remember this happening.


    I remember the crash well but I didn't have money at that time. So no I didn't get burnt.
     
  4. TheMayor

    TheMayor Seven Time F1 World Champ
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    Feb 11, 2008
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    Vegas baby
    Does anyone remember that on Speedvision every Saturday night they used to have a celebrity race on short ovals with this thing?
     
  5. Bradwilliams

    Bradwilliams F1 Rookie
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    Pretty typical. They'll tell you this in Real estate even today regarding high price cities such as san francisco. People will claim "San Francisco never went down look at the graph"

    It did briefly after the dot com bubble and substantialy after the housing bubble
     
  6. 166&456

    166&456 Formula 3

    Jul 13, 2010
    1,720
    Amsterdam
    There are scoundrels, snake oil salesmen and RE folk... The 87 crash is hardly a blip in the graphs but there are many downturns that were a lot larger and longer lasting. Long term prices of anything always go up because money is perpetually devalued but that does not mean you can't be "under water" for decades on a house, with all the problems attached to that fact.
     
  7. kevfla

    kevfla Formula 3

    Nov 20, 2003
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    gone 4 good
    Yeah...Crash Masters...Past Masters...um, Fast Masters. Huge fiasco for Jaguar!
     
  8. Glassman

    Glassman F1 World Champ
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    Apr 23, 2002
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    89 - 90 is Vintage now??????
    I forget how old I am often.
     
  9. johngtc

    johngtc Formula Junior
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    Mar 4, 2005
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    John Gould
    I bought a fairly good 330 GTC in early 1981 for about GBP12K. I have monitored asking (NB not selling) prices ever since and I think there is a salutory lesson to be had.

    Prices rose fairly slowly but in Feb 1990 two cars were on offer, one in the UK and the other in Germany, at GBP 245K and GBP 269K respectively. They then fell off a cliff and between Jan 91 and April 12 almost every car offered was priced at GBP40 to 50K.It was Jan 13 before prices recovered to a level higher than 1990 - 13 years.

    There are 3 points to note:

    1. The GTC was probably not the best marker, as 30 years ago it was not as highly regarded as it is today.
    2. The data I gathered was global but there was a similar patern in the US and Europe.
    3, Exchange rates have moved a lot but my data is denominated in GBP at the time.

    The circumstances were familiar. A lot of people earning big bucks in the banking and property sectors; easily obtainable credit and the entry into the market of those
    we with an eye to profit and minimal knowledge of the cars concerned.

    In the late 80s my car was in storage as I was working overseas. It shared space with a dozen or so red/magnolia 308/328 which had been repossesed by banks, who did not want to risk flooding the market, and 5 or 6 brand new Astons where customers had been unable to take delivery and forfeited their deposits.

    I don't think circumstances are quite the same today as movements are slower but who knows? I'm not a profit of doom but some posters think the market can only go one way.
     
  10. Ed Niles

    Ed Niles Formula 3
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    Sep 7, 2004
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    I was certainly there. I had a 365GTC under total resto, and had a very bad feeling that a collapse was imminent. Bruno had the engine for rebuild, the paint shop had the body for strip/repaint, and the upholsterer had the interior. At the same time I had a 250GTE that was in the shop, prepping for resale. I was pushing, pushing, pushing everyone, but the collapse came and bit me hard on the butt. Instead of making the projected profit, I lost on both cars. The only consolation was that I had foreseen it
     
  11. Lotaz

    Lotaz Formula 3

    Nov 18, 2016
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    My RE agent keeps telling me to sell my house as he thinks the whole market is going to crash again. My house value has risen by 50% in the 5 years I have owned it. To me that's just crazy what the market is doing ........... once again. I keep thinking take the money and run.
     
  12. Dave330gtc

    Dave330gtc Formula Junior

    Mar 12, 2002
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    David Smith
    I sold a PF coupe that I had owned for awhile in fall 1989. Prices had risen too much too fast. I had been getting too many calls from people wanting to buy it without ever seeing it. I had a bad feeling about future value. I missed the peak by a few months but I remember watching prices dropping fast and desperate people chasing them down shortly after. Back then the fun went out of ownership when the car became too valuable. It went from being an enjoyable driver to being a major part of my portfolio. I knew it was time to sell. I didn't buy back in until 2001. Missed the low by about a year
     
  13. Bradwilliams

    Bradwilliams F1 Rookie
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    Dave how did we never meet? I was up In NWI for about four years. I would get together with Hilary in Crown Point every now and then.
     
  14. donv

    donv F1 World Champ
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    When I bought my 365GT in 1993, the previous owner kept telling me how he had had an offer for something like $110k only a few years before. He bought it in 1986, so I think he came out about even, or maybe a little bit ahead.
     
  15. Mckinney

    Mckinney Karting

    Mar 29, 2013
    196
    I have the same thoughts about asset valuations in general, especially equities. Things are looking a lot like late summer 1929 to me, politically and with the financial markets. Let's see how it looks going into the fall. The first hint of trouble in 1929 came in early September. The real carnage began in October and November, so there was a little time. And the market recovered half the 1929 losses in the first 4 months of 1930 before it began a long, grinding plunge.

    As to 1989, I remember two things: the appearance of all sorts of middlemen nd marketers in the 2 or 3 years preceding and the fact that no one was scrambling to buy the cars after the crash. People thought they'd go even lower.
     
  16. Smiles

    Smiles Moderator
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    Great post, John.

    Matt
     
  17. BIRA

    BIRA Formula Junior

    Jun 15, 2007
    888
    I was looking for an E type Jaguar and prices were going up every month by 5 %. I felt like missing the boat for buying a Rembrandt , that I would never be able to afford one again. So I pushed hard and bought a terrible one, and spend 3 years to restore it, the roof being the only panel we did not touch. I kept it 22 years and recouped my money, at least on nominal terms,,and a little bit more. But I used it a lot. But in 1992 I had my vengeance. I bought a Maserati 3500 Vignale Spyder at one of the first auction of Robert Brooks ( before he became Bonhams with the help of Louwman) at 10% of the price paid by the previous owner in 1989,,
    so cheap that the next morning they called me and asked me if I would sell it ( before paying) for a margin. I kept it and sold it also 20 years later for 20 times the price I paid...the next buyer doubled his money in 6 month,,those were the times!!
     
  18. johngtc

    johngtc Formula Junior
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    Thanks Matt

    I am of course not a PROPHET of doom!! Maybe that was freudian!
     
  19. Mrpbody44

    Mrpbody44 F1 Veteran
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    Got my Lusso for $23,000 in 83 and sold it for $189,000 after I restored it I think in 88 and it went to Switzerland. Black with Red interior and luggage. It is still there. I was getting divorce and it had to go along with all my other cars. I used it as a daily driver in NYC.
     
  20. amenasce

    amenasce Two Time F1 World Champ
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    I think the main difference with 1989 is the sheer number of HNW individuals. Add that to the fact that cars as we know it are dying (which was not the case in 1989) then to me that says that this market has more chances to hold longer.
     
  21. nis1973

    nis1973 Formula Junior

    Jan 19, 2013
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    #21 nis1973, Aug 23, 2017
    Last edited: Aug 24, 2017
    True. One thing though is that there are also many more cars that are now considered collectible. In 1989 the F40 was only halfway through its production run, the F50, Enzo, Laf, mclaren F1, Porsche gt1, cgt, 918 didn't exist. All of these (and number of others too) are now very collectible...
     
  22. Bradwilliams

    Bradwilliams F1 Rookie
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    That is outstanding :)
     
  23. cheesey

    cheesey Formula 3

    Jun 23, 2011
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    where does everyone think current market range could tank to, that they have their shorts in a bunch... only those that are on weak financial footing and are over extended in their financial affairs, where a small correction could bring down their house of cards are the ones that are worrying... no worries here
     
  24. 246tasman

    246tasman Formula 3

    Jun 21, 2007
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    Will Tomkins
    What I remember about it all was that
    1. Classic cars were appreciating at crazy rates, and new Ferraris for example were all ordered up and could be sold on delivery at great profits.
    2. People without the slightest interest in cars were a significant slice of the market.
    3. Credit was easy.
    4. Interest rates went through the roof, reaching I think almost 20%.
    5. Most of the purchases were on borrowed money so when the downturn came there was serious panic to get out.

    It was quite different from what is happening now.
    That doesn't mean of course that another big crash couldn't happen.
     
  25. xs10shl

    xs10shl Formula 3

    Dec 17, 2003
    2,017
    San Francisco
    If this Monterey Week is any indicator, then public sentiment is definately swinging towards much newer cars. Quail was practically a new-car dealership, and I'd venture to say the median age of cars on the snowfield had decreased from 50 years old to perhaps 20 or newer. At this pace, Quail Will become predominantly a showcase for cars of the 21st century within a few short years.

    Same story with respect to the average age of most of the cars outside the showfield, on the streets. I'd venture a guess that most of the exotic hardware people were driving was less than 15 years old, perhaps even less than 5.
     

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