Bloomberg’s Olivia Sterns reports on the rising value of classic sports cars. This report includes comments from Pink Floyd drummer Nick Mason, an advisor to the IGA Automobile LP fund that aims to buy $150 million worth of classic cars and make annual returns of 15 percent.
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April 19 (Bloomberg)
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries." -Bill Gross
Signs continue that European markets are getting tired. The Spanish and Italian stock markets, big beneficiaries of the sharp decline in their bond yields over the past few months are falling to the lowest since Feb 1. The European bank index is at a 1 1/2 week low after earnings reports from Commerzbank and Credit Ag (RBS bouncing although reporting weaker than expected earnings) were disappointing. This market action is in spite of the German IFO business confidence figure which rose to a 7 month high coming in a touch above expectations and Italian consumer confidence which bounced more than...
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April 19th, 2011 at 10:48 am
Shine on you crazy atom heart mother
April 19th, 2011 at 11:01 am
15% a year, huh? Well, that would result in the first billion dollar Daytona, by may reckoning.
People say tech is bubbled up again, but, this is much dumber money.
April 19th, 2011 at 1:30 pm
Interesting that David Mason is also a classic car buff.
There is a very sound economic reason to invest in classic cars: they’re not making any more of them.
Obviously it’s all about supply and demand. The supply of such cars is fixed, and is in fact declining. Some cars see their values rise steeply only to plummet but those are usually vehicles that are in abundant supply who go through a wave of collector interest. But there are very limited numbers of Ferraris and they are unlikely to suffer that fate.
Classic cars have quadrupled in value on average in the past decade. Other than precious metals few investments have done as well, and unlike precious metals I would say there’s very little downside risk.
April 19th, 2011 at 2:10 pm
buy buy before they commoditize ferraris for a final bubble boost
sell 18 mo from now
watch for when it flys too high..
“ice is forming on the tips of my wings
unheeded warnings…”
April 19th, 2011 at 3:03 pm
@Mark A. Sadowski
“I would say there’s very little downside risk.”
Do a little research beyond ten years. the Japanese drove the price of Ferraris through the roof in the late 80s before their crash. The market was in the duldrums for the next decade, at least.
Also, think about a few things – storage and security. A million dollar classic car requires an very nice climate controlled garage to live in with very good security. How much do you think that costs for the ten or so years one would buy and hold? Also, this is not a vehicle you would let Joe down at the corner station touch with a wrench. Nope, high end mechanics with a good reputation probably make as much as surgeons, if you can find them. And that thing has to be running like a fine watch if you want to make some money on our “investment” at selling time. With all original parts.
I’m guessing that old Ferraris are right up there with many sports teams and trophy wives as just expensive toys for the uber rich, not an investment. Anyway, a modern Porsche or even high end Jap machine will blow the doors off an old Ferrari, so, why bother? You get a warranty in the deal, too.
April 19th, 2011 at 3:50 pm
@BennyProfane
Well you got me. It’s true that classic Ferraris fell about 60% in value in the 1990s but on average they are now double their peak value during the roaring 1980s. In fact they are up nearly 30 fold in the past 30 years.
Storage expenses are trivial for a car with such a high value. And if well stored, given that they are almost never driven, they’ll rarely need mechanical attention.
Comparisons with modern cars are quite besides the point. It’s not the performance that one is buying but the rarity. This is very much like collecting a fine work of art. And yes, until this fund was created, this was a market purely for the uber rich.