SCM and the Bubble

[vracer]

Sports Car Market has a 6 page piece, and a couple of other mentions about the bubble. The people quoted in the piece are all highly knowledgeable; whether they are willing to part with 100% of their knowledge to us "non-clients" is debatable.

"Collector Car" is a term that is often bandied about on this forum. I take issue with that term for the cars we normally talk about. "Hobby Car", "Fun Car", "Sports Car", or maybe even "Classic Car", but we're not talking about bubble wrapped, seldom - if ever - driven "Collector" cars. The two classes have different metrics.

The cars people here are talking about, and buying, are $10-100K second, third, or fifth hobby cars, and if we make a couple of bucks with them, that just makes them more enjoyable. (And raises our stock with our wives.)

[cover]

I will rather commit harakiri with a rusty spoon than take advice from a market analyst or any other finance-fool.
Conventional business wisdom does not apply to the world markets of today.
Everything is derived from distortion, spekulation and manipulation.......and anyone who claims to have any clue is a damn liar.

[Augustus]

^^^what he said!

[COLB]

Originally Posted by cover

Conventional business wisdom does not apply to the world markets of today.
Everything is derived from distortion, spekulation and manipulation.......and anyone who claims to have any clue is a damn liar.

So…when exactly were world markets not subject to distortion, speculation, and manipulation?

Seems like that has been the norm throughout history…

[Tim Hanson]

Colb, you are very wise... What is your background ? Plus, every 40 years or so, the world wants to blow itself up.

Tim H

[cover]

Originally Posted by COLB

So…when exactly were world markets not subject to distortion, speculation, and manipulation?

Seems like that has been the norm throughout history…

True enough.......but just about everything is so interconnected and the tools for manipulation are so effective these days.
Inflation is very high and the whole global economy seems to consist of bubble on bubble on bubble........and it appears that there is a will to let them grow bigger and bigger while there is no will to face any consequences when they blow up.

[gmund1948]

Originally Posted by vracer

Sports Car Market has a 6 page piece, and a couple of other mentions about the bubble. The people quoted in the piece are all highly knowledgeable; whether they are willing to part with 100% of their knowledge to us "non-clients" is debatable.

"Collector Car" is a term that is often bandied about on this forum. I take issue with that term for the cars we normally talk about. "Hobby Car", "Fun Car", "Sports Car", or maybe even "Classic Car", but we're not talking about bubble wrapped, seldom - if ever - driven "Collector" cars. The two classes have different metrics.

The cars people here are talking about, and buying, are $10-100K second, third, or fifth hobby cars, and if we make a couple of bucks with them, that just makes them more enjoyable. (And raises our stock with our wives.)

please

[COLB]

Originally Posted by cover

True enough.......but just about everything is so interconnected and the tools for manipulation are so effective these days.

Fair enough -- but the average person's access to information is also unprecedented, and arguably, the gap between the brokers and the average joes is smaller than it has ever been. The Internet has leveled the playing field to a large degree.

Inflation is very high and the whole global economy seems to consist of bubble on bubble on bubble....

Inflation is high? Compared to when? I'm old enough to remember double digit inflation in the 1970s.



Economies have had boom & bust cycles from time immemorial. Don't keep all your eggs in one basket, and take the long view on investments. You'll never get rich quick, but almost no one really does.

[mattC2993]

The internet has broadened the market raising demand effectively. It also exposes people to classic cars through forums and what not. I can only imagine how hard it would be to sell a classic car within my local market without it's effect. We all know that higher demand equals higher prices. This driving force won't be going away obviously. An economic downturn (or high inflation) would be the biggest cause of a price drop as well as an aging population which is of course a much slower moving factor.

[cover]

Colb, maybe you're right....I really hope so.
I suspect inflation is actually substancially higher than we are led to believe though.
But there is so much B S from banks and politicians and I tend to get a bit gloomy from time to time. I could just be suffering from propaganda overload.
I should probably vent that frustration somewhere else....like Doomsday Prepper Forums :-)
It can be dificult to figure out what holds real value today and in the future.
But I guess good solid classic tangible assets will be ok over time, most of the time.
I think a lot of "well of people" feel a bit uneasy about the current state of everything and that is why things like art, classic cars and vintage watches are kinda hot right now.
But I also know that these trends has been waving back and forth in the past and maybe there are no combined evil forces at play at the moment ;-)

[mattC2993]

Originally Posted by cover

Colb, maybe you're right....I think a lot of "well of people" feel a bit uneasy about the current state of everything and that is why things like art, classic cars and vintage watches are kinda hot right now...

I can't say I agree with that logic. Perhaps the very wealthy park some of their money in hard assets to diversify but they never kept it in cash anyway (which is the big fear I think). This doesn't apply to the guys buying cars for less than $100k IMHO. I might justify my cars as a temporary savings vehicle but I don't count on them appreciating.

[SilberUrS6]

I can't see this as a bubble popping for anything more than the very high end - as collector car markets have done for quite some time. The lower end of the scale flattens, and values remain constant for a period of time. I think much of that has to do with the fact that folks that own these cars don't really *need* to sell them when economic conditions turn down. What happens is that they go into storage. Most come out at the end of the downturn, and the owners enjoy them some more. Some few stay in storage for whatever reason. The future "barn finds". But even under the last recession, the prices really didn't drop much. Even longhoods had a fairly stable run for a few years. But folks who buy right now aren't going to turn around and sell this coming fall at a 33% loss unless something else dire is happening in their lives. And that's not a bubble popping, that's just the way life it.

[COLB]

The downside risk of buying a 911 is real, but unless you are buying ten of them, the loss potential a $25-30k car is minimal.

Worse case - near term - is probably par with new car depreciation, and over the long term is significantly better. Though with admittedly higher operating costs. Hobbies cost money, no matter what you are doing.