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Old 05-01-2022, 01:40 PM   #1
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History About To Repeat

Very interesting article in Hagerty about the meteoric rise of Ferarri prices in the late 80s followed by catastrophic decline in the early 90s. Sounds strickingly similar to our current environment. Are we approaching the cliff's edge?

https://insider.hagerty.com/trends/the-oral-history-of-the-ferrari-bubble/?utm_source=SFMC&utm_medium=email&utm_content=MED_UN_NA_EML_UN_SaturdayRoadTrip&hashed_email=ad337f402179eec74c4701433848a0c1d7fff 267922858e66c911cae60208d91&fbclid=IwAR3cg6lhknGM71qfrscvsZMX__QM6Li2Wo3hju5Wn LfPCM1WrI04qNolMgA

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Old 05-01-2022, 08:45 PM   #2
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New car prices won't come down until the market is saturated with chips again. This won't happen until asia is back to full capacity, which ain't happening tomorrow. Until then, used car prices will continue to climb (although it will be interesting to see what happens as more people will need to turn to banks for financing because of the rising prices, only then to be faced with massive interest rates). When the dominoes do line up though, there will be a lot of people with a 20 year old used old car in their driveway and a bad case of buyers remorse.

The Ferrari bubble was wild though. A good friend of mine, van shappley, became a very very wealthy man riding that market. That was a very different beast though, fueled by opulence and economic prosperity, which crashed as analog supercars became a thing of the past along with the wild wave of modernization that characterized the 90s.

Fun thought exercise!

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Old 05-02-2022, 05:27 AM   #3
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Originally Posted by ike84 View Post
New car prices won't come down until the market is saturated with chips again. This won't happen until asia is back to full capacity, which ain't happening tomorrow.
Totally agree, the new car shortage is fueling the problem (along with inflation) and will influence the entire mkt until factories have enough chips for full capacity. But I find it interesting now that dealer lots are filling up. I haven't taken the time to see if they're charging outlandish prices for the cars on their lot, but I assume they are. It also appears that people can order a new car and not have to wait a lifetime for it to arrive. That will ease the impact. People were used to going to the dealer and buying what they were looking for that was on someone's lot (instant gratification). For a while there weren't any new cars available, so people seem to be willing to adjust to waiting if they can get what they want.

Dealers are still doing their "your trade-in isn't worth anything" (old habits die hard). A club member was looking for a Boxster and she purused the Porsche dealer car finder website. She found one coming in to KC and snapped it up. She kept her 08 Box cuz they wouldn't give her a fair price for it. Now, the dealer in KC is notorious for being a bit less than even handed, so maybe it's just them. Every sports car our dealer gets is pre-sold before it arrives. They get an odd Cayenne or Panno that arrives w/o an owner, but they last about 2-4 days before it's sold. Our dealer had 7 cars on the ship that sank and evidently the next ship had issues with high seas breaking several cars loose and playing bumper cars. 3 belonged to our dealer.

And I meant to add a ? to my title. Got in a hurry to write the body and missed it during QC. The crash may still be 6-9 mo out because of chips. If the stock mkt crashes, will the fat cats move to 'hard assets' like cars like they did in '88? That might push the expansion of the sports car / collector bubble for a bit longer. If the fat cats move into high end cars, that will mean the fall will be bigger when it happens. I'll be watching for bargain TTs and GT3s, but I've always wanted a 987 Spyder. It may take 5 yrs for the prices to bounce back, but that would be a fun 5 yrs of driving and enjoying a dream car at a bargain price.
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Last edited by husker boxster; 05-02-2022 at 05:38 AM.
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Old 05-03-2022, 03:38 AM   #4
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I agree with you. When the crash happens it will be hard on those who landed foresight or has no other choice than to buy right now.

I'm not sure about investors dumping into material goods in the near future, at least not right now. I follow financial markets pretty closely (another hat I wear for the family lol) and I can tell you that everyone is nervous right now - institutional as well as personal investors. Equities AND bonds (corporate and Treasury) a, hell-even most commodities - are being unloaded from balance sheets at an unprecedented rate. New issue bonds may start gaining traction over the next 6 months with rising rates but even that's not a guarantee. I guess my point is that I'd doubt if investors will take that cash and dump them into the 986/996 market. I could be wrong about that but a lot of people are learning hard lessons right now about foolish investing tactics that made them a lot of money over the last 2 years and took it all back in the last 6 months (unless you were smart enough to pull out before Xmas ) and I don't see them running to cars as the next nasdaq boom. But, as always, I could be completely wrong lol.

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Old 05-03-2022, 05:02 PM   #5
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I was eyeballing running Porsche 911 SCs in the 20-25k range pre-covid now they are 50-60K hopefully the bubble bursts someday.

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