[DeTomaso] FW: Should we purchase vintage cars for our investment portfolio?
Christopher Kimball
chrisvkimball at msn.com
Tue Aug 18 10:25:39 EDT 2015
Excellent; thanks! Good thoughts.
Chris
Sent from my Windows Phone
________________________________
From: Jordan Klein<mailto:ohjordan at hotmail.com>
Sent: 8/18/2015 5:44 AM
To: detomaso at poca.com<mailto:detomaso at poca.com>
Subject: [DeTomaso] FW: Should we purchase vintage cars for our investment portfolio?
Regarding the Bloomberg article titled "Why A Classic Car Is (Almost) Never A Good Investment"
Warning: Editorial
The following is just my opinion.
I first noticed the article was 'written' by a generic team called "Bloomberg News" which probably means several wordsmiths got assigned the topic. Interpretation: NOT car people. Writers baffled by the complexities of the collector car world.
Unfortunately, the article fails to ask the most fundamental question:
What creates enthusiast value in the collector car market?
Failing to explore this question leaves these 'authors' assuming the game can't be understood; therefore collector cars depreciate and are "(almost)" always a bad investments.
Well, it should be obvious even to the couch potato watching Mecum on TV; not all cars are a bad investments, as some cars are now worth millions, so somebody made some $Bank$ and did alright.
It would have been helpful had the authors explored the difference between nostalgia, historical, enthusiast, cult, legend, rare, and bluechip cars. So yeah, these authors shouldn't consider classic car ownership as an appreciating investment. They simply don't understand what they're writing about.
Let me explain;
Nostalgia cars rarely have value except for the person who holds the memory. Perhaps it's just like dad's car, or it's just like the car in the poster, or the one on his first date, etc. With perhaps rare exceptions, these types of nostalgia cars should not be considered collector cars.
Historical cars, also known as vintage cars, or perceived as milestone car; all contributed in some significant way to the craft of automobile engineering and/or design. Examples span the range from the Curved Dash Olds, the Model T, the supercharged Cord, the guilded-age Duesenbergs, the rear-engined Tucker, to the maverick advertising genius of John DeLorean and his GTO, the Zora Arkus-Dontov Air Box Corvettes, or the ourtrageously beautiful 1949 Delahaye 175 S Saoutchik Roadster. These cars tend to be museum cars and show cars, and can be worth millions.
Enthusiast cars have fetish appeal; like the fin cars of the late 50s, the bubble-tops, and the go-fast muscle cars like the 442, the GTO, the Yenko 427, the 455SD or GTO Ram Air IV cars, and Hemi cars, winged cars, and homologated race cars for the street. Enthusiasts value style AND function; therefore value is proportional to the thrill of owning, showing, driving and being seen and admired. I think Panteras are quickly becoming A to B grade enthusiast collector cars.
Cult cars can have significant value, but generally only to those absorbed in that particular cult. Examples include movIe cars like the 'Bullet' Mustang, the Eleanor Mustang, to George Barris customs, or even the Sonny & Cher customized Mustangs. Some might argue the Shelby Mustang is yesterday's cult car, since young kids are suddenly all into Vaughn Gittin's Mustang RTR. So be forewarned; cult cars tend to flash hot then fall out of favor, replaced by next months hot new trendy fad of the moment. The value if these cars can sometimes be like trying to catch a falling sword.
Legend cars, sometimes called Pedigree cars or "provenance" cars can also have significant value; like Carroll Shelby's personal twin-supercharged Cobra, or the LeMans winning GT40 driven to victory by Dan Gurney & AJ Foyt, or the custom factory pink 59 Pontiac Bonneville convertible ordered by Harley Earl for his wife. This category should probably include one-off factory styling exercises and the Autorama show cars. It's not so much as the car, it's the fact there's only one.
Legendary Pantera's might include Alejandro DeTomaso's personal Pantera, the Elvis 'bullet hole' Pantera, the one-off notched flying buttress Pantera, Tom Tjaarda's styling exercise Pantera, and for morbid curiosity, the wrecked Panteras of Mötley Crüe's Vince Neil or Toronto Maple Leaf's Tim Horton. The value of these cars is proportional to the intrigue of the fabled owner, and the thoroughness of the paperwork to prove pedigree or provenance.
Rare cars have value simply because of supply vs. demand. Since Plymouth only built 11-1971 Hemi Cuda Convertibles, these cars are prized more by collectors than there are cars. Competition for ownership
sets value, often much higher than the price to build a visually and mechanically identical "tribute" car.
So what makes a truly "Blue Chip" collectible? Competition for ownership! It takes more than one interested buyer to drive price. Buyer motivations are unique and often unknowable; but whatever their motivation, the more interest, the more bidders driving bid competition that determines sale price.
Discerning collector car 'investors' are not ignorant of these motivations, and exploit opportunities to capitalize within the hobby. They often do quite well. For example, Dana Mecum has done all right for himself and contributed significantly to the hobby. Of course there are many others...
The increasing value of Pantera's is directly proportional to:
#1) the quality and frequency of public exposure creating new enthusiasts with favorable and admiring perceptions and memories,
#2) the exceptional support we enjoy from the numerous quality vendors, club publications, and chapter tech sessions; that helps keep or cars running and looking gorgeous,
#3) the camaraderie enjoyed by club membership, forming lasting friendships over common interests. This includes the enthusiasm and creativity exhibited by chapter leaders to those who diligently produce informative articles online and in print.
#4) and finally, we all benefit by having club members who are also seriously gifted automotive and aerospace engineers; who's skills significantly contribute to design understanding and refinements far beyond the capabilities of the amateur enthusiast.
For these reasons, I think we should expect the DeTomaso mark to continue increasing in value as we as a car club promote the desirability and camaraderie of ownership. Currently, $70k seems to be fair market value for an average to clean and attractive Pantera; $100k plus for an exceptional example. Look at the prices of a Boss 302 Mustangs, or one of my favorites --the Intermeccanica Italia. When compared to other collectables, current Pantera valuations may still be on the affordable side of the market. After all, a new Corvette is $80k on up, I even looked at a $55k pick-up truck last week! Then I realized, the Pantera hasn't inflated in value, it's our money that's lost value.
Without considering monetary devaluation or future value projections, the Pantera has been a good investment, i.e., it's kept its value on par with modern sporty type cars, plus I get to drive it, admire it, and wrench on it. In simple math, it's value is about 3 to 4 times what I paid for it, minus the cost of insurance, tags, replacement parts, oil change, etc. It may be stylish artwork, but it's more than a picture hanging on a wall. So with these factors in mind, what other car might provide even a fraction of the enjoyment while maintaining good value. That's a question the article's authors couldn't even fathom. From that perspective, the Pantera is one of the best automotive value investments available to the common man.
Before I bought my Pantera, I was also looking for a Dino 246 Spyder, as they were about the same price way back then. Today, the 246 is easily worth double the Pantera. But if you consider the cost of ownership, i.e., service & parts, I still think the Pantera is a better investment.
Jordan Klein
7314
PS: Obviously not intended to be a comprehensive dissertation. Just rambling thoughts about the collector car hobby and valuations.
> To: DeTomaso at poca.com
> From: jtaphorn at kingwoodcable.com
> Date: Mon, 17 Aug 2015 18:03:21 -0500
> Subject: [DeTomaso] Should we purchase vintage cars for our investment portfolio?
>
> This Bloomberg story greeted me at my office this morning. Here is one
> person's opinion on vintage cars as an investment. Would you agree?
>
> http://www.fa-mag.com/news/why-a-classic-car-is--almost--never-a-good-investment-22791.html?utm_source=PW+Subscribers&utm_campaign=f7ee052d6d-PWN_PW+News_081715&utm_medium=email&utm_term=0_1899ce8517-f7ee052d6d-232404493
>
> JT
>
> _______________________________________________
>
> Detomaso Forum Managed by POCA
> Posted emails must not exceed 1.5 Megabytes
> DeTomaso mailing list
> DeTomaso at poca.com
> http://poca.com/mailman/listinfo/detomaso_poca.com
>
> To manage your subscription (change email address, unsubscribe, etc.) use the links above.
-------------- next part --------------
Excellent; thanks! Good thoughts.
Chris
Sent from my Windows Phone
__________________________________________________________________
From: [1]Jordan Klein
Sent: 8/18/2015 5:44 AM
To: [2]detomaso at poca.com
Subject: [DeTomaso] FW: Should we purchase vintage cars for our
investment portfolio?
Regarding the Bloomberg article titled "Why A Classic Car Is (Almost)
Never A Good Investment"
Warning: Editorial
The following is just my opinion.
I first noticed the article was 'written' by a generic team called
"Bloomberg News" which probably means several wordsmiths got assigned
the topic. Interpretation: NOT car people. Writers baffled by the
complexities of the collector car world.
Unfortunately, the article fails to ask the most fundamental question:
What creates enthusiast value in the collector car market?
Failing to explore this question leaves these 'authors' assuming the
game can't be understood; therefore collector cars depreciate and are
"(almost)" always a bad investments.
Well, it should be obvious even to the couch potato watching Mecum on
TV; not all cars are a bad investments, as some cars are now worth
millions, so somebody made some $Bank$ and did alright.
It would have been helpful had the authors explored the difference
between nostalgia, historical, enthusiast, cult, legend, rare, and
bluechip cars. So yeah, these authors shouldn't consider classic car
ownership as an appreciating investment. They simply don't understand
what they're writing about.
Let me explain;
Nostalgia cars rarely have value except for the person who holds the
memory. Perhaps it's just like dad's car, or it's just like the car in
the poster, or the one on his first date, etc. With perhaps rare
exceptions, these types of nostalgia cars should not be considered
collector cars.
Historical cars, also known as vintage cars, or perceived as milestone
car; all contributed in some significant way to the craft of automobile
engineering and/or design. Examples span the range from the Curved
Dash Olds, the Model T, the supercharged Cord, the guilded-age
Duesenbergs, the rear-engined Tucker, to the maverick advertising
genius of John DeLorean and his GTO, the Zora Arkus-Dontov Air Box
Corvettes, or the ourtrageously beautiful 1949 Delahaye 175 S Saoutchik
Roadster. These cars tend to be museum cars and show cars, and can be
worth millions.
Enthusiast cars have fetish appeal; like the fin cars of the late 50s,
the bubble-tops, and the go-fast muscle cars like the 442, the GTO, the
Yenko 427, the 455SD or GTO Ram Air IV cars, and Hemi cars, winged
cars, and homologated race cars for the street. Enthusiasts value
style AND function; therefore value is proportional to the thrill of
owning, showing, driving and being seen and admired. I think Panteras
are quickly becoming A to B grade enthusiast collector cars.
Cult cars can have significant value, but generally only to those
absorbed in that particular cult. Examples include movIe cars like the
'Bullet' Mustang, the Eleanor Mustang, to George Barris customs, or
even the Sonny & Cher customized Mustangs. Some might argue the Shelby
Mustang is yesterday's cult car, since young kids are suddenly all into
Vaughn Gittin's Mustang RTR. So be forewarned; cult cars tend to flash
hot then fall out of favor, replaced by next months hot new trendy fad
of the moment. The value if these cars can sometimes be like trying to
catch a falling sword.
Legend cars, sometimes called Pedigree cars or "provenance" cars can
also have significant value; like Carroll Shelby's personal
twin-supercharged Cobra, or the LeMans winning GT40 driven to victory
by Dan Gurney & AJ Foyt, or the custom factory pink 59 Pontiac
Bonneville convertible ordered by Harley Earl for his wife. This
category should probably include one-off factory styling exercises and
the Autorama show cars. It's not so much as the car, it's the fact
there's only one.
Legendary Pantera's might include Alejandro DeTomaso's personal
Pantera, the Elvis 'bullet hole' Pantera, the one-off notched flying
buttress Pantera, Tom Tjaarda's styling exercise Pantera, and for
morbid curiosity, the wrecked Panteras of Moetley Cruee's Vince Neil or
Toronto Maple Leaf's Tim Horton. The value of these cars is
proportional to the intrigue of the fabled owner, and the thoroughness
of the paperwork to prove pedigree or provenance.
Rare cars have value simply because of supply vs. demand. Since
Plymouth only built 11-1971 Hemi Cuda Convertibles, these cars are
prized more by collectors than there are cars. Competition for
ownership
sets value, often much higher than the price to build a visually and
mechanically identical "tribute" car.
So what makes a truly "Blue Chip" collectible? Competition for
ownership! It takes more than one interested buyer to drive price.
Buyer motivations are unique and often unknowable; but whatever their
motivation, the more interest, the more bidders driving bid competition
that determines sale price.
Discerning collector car 'investors' are not ignorant of these
motivations, and exploit opportunities to capitalize within the hobby.
They often do quite well. For example, Dana Mecum has done all right
for himself and contributed significantly to the hobby. Of course
there are many others...
The increasing value of Pantera's is directly proportional to:
#1) the quality and frequency of public exposure creating new
enthusiasts with favorable and admiring perceptions and memories,
#2) the exceptional support we enjoy from the numerous quality vendors,
club publications, and chapter tech sessions; that helps keep or cars
running and looking gorgeous,
#3) the camaraderie enjoyed by club membership, forming lasting
friendships over common interests. This includes the enthusiasm and
creativity exhibited by chapter leaders to those who diligently produce
informative articles online and in print.
#4) and finally, we all benefit by having club members who are also
seriously gifted automotive and aerospace engineers; who's skills
significantly contribute to design understanding and refinements far
beyond the capabilities of the amateur enthusiast.
For these reasons, I think we should expect the DeTomaso mark to
continue increasing in value as we as a car club promote the
desirability and camaraderie of ownership. Currently, $70k seems to be
fair market value for an average to clean and attractive Pantera; $100k
plus for an exceptional example. Look at the prices of a Boss 302
Mustangs, or one of my favorites --the Intermeccanica Italia. When
compared to other collectables, current Pantera valuations may still be
on the affordable side of the market. After all, a new Corvette is
$80k on up, I even looked at a $55k pick-up truck last week! Then I
realized, the Pantera hasn't inflated in value, it's our money that's
lost value.
Without considering monetary devaluation or future value projections,
the Pantera has been a good investment, i.e., it's kept its value on
par with modern sporty type cars, plus I get to drive it, admire it,
and wrench on it. In simple math, it's value is about 3 to 4 times
what I paid for it, minus the cost of insurance, tags, replacement
parts, oil change, etc. It may be stylish artwork, but it's more than
a picture hanging on a wall. So with these factors in mind, what other
car might provide even a fraction of the enjoyment while maintaining
good value. That's a question the article's authors couldn't even
fathom. From that perspective, the Pantera is one of the best
automotive value investments available to the common man.
Before I bought my Pantera, I was also looking for a Dino 246 Spyder,
as they were about the same price way back then. Today, the 246 is
easily worth double the Pantera. But if you consider the cost of
ownership, i.e., service & parts, I still think the Pantera is a better
investment.
Jordan Klein
7314
PS: Obviously not intended to be a comprehensive dissertation. Just
rambling thoughts about the collector car hobby and valuations.
> To: DeTomaso at poca.com
> From: jtaphorn at kingwoodcable.com
> Date: Mon, 17 Aug 2015 18:03:21 -0500
> Subject: [DeTomaso] Should we purchase vintage cars for our
investment portfolio?
>
> This Bloomberg story greeted me at my office this morning. Here is
one
> person's opinion on vintage cars as an investment. Would you agree?
>
>
[3]http://www.fa-mag.com/news/why-a-classic-car-is--almost--never-a-goo
d-investment-22791.html?utm_source=PW+Subscribers&utm_campaign=f7ee052d
6d-PWN_PW+News_081715&utm_medium=email&utm_term=0_1899ce8517-f7ee052d6d
-232404493
>
> JT
>
> _______________________________________________
>
> Detomaso Forum Managed by POCA
> Posted emails must not exceed 1.5 Megabytes
> DeTomaso mailing list
> DeTomaso at poca.com
> [4]http://poca.com/mailman/listinfo/detomaso_poca.com
>
> To manage your subscription (change email address, unsubscribe, etc.)
use the links above.
References
1. mailto:ohjordan at hotmail.com
2. mailto:detomaso at poca.com
3. http://www.fa-mag.com/news/why-a-classic-car-is--almost--never-a-good-investment-22791.html?utm_source=PW+Subscribers&utm_campaign=f7ee052d6d-PWN_PW+News_081715&utm_medium=email&utm_term=0_1899ce8517-f7ee052d6d-232404493
4. http://poca.com/mailman/listinfo/detomaso_poca.com
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