Ferrari Mailing List: Re: Barrett-Jacson [Ferrari Digest, Vol 18, Issue 43}

[BRIGANDBAR (BRIGANDBAR]

I think that Erik has a point here with car valuations. Most of us will  
remember that a value crash has occurred in the not too distant past, and many  
folks, including some dealers (which is something I find difficult to 
understand 
 except in the context of the amount of money professional money managers had 
 placed in those "sub-prime" mortgages and the write-offs that they are 
currently  facing in our soon to be in recession economy) we elft "holding the 
bag".
 
Some of these cars are purchased with leveraged funds, either home equity  
loans or refinancing(s) but a lot of it comes from much of the money at  
Barrett-Jackson comes from bonus babies at the Wall Street firms, some, if not  
many, 
of whom may be job hunting and needing to unload their latest acquisitions  
to achieve some level of liquidity to survive, eat, etc. Some of the funding  
comes from entrepreneurs who believe that their companies will sustain their  
current, perhaps meteoric IRR/ROI's. They are the "new oilmen" in this century, 
 who were millionaires  (multi-millionaires or even billionaires) one day  
and eating at the mission the next. And, of course,there are the successful  
people who have reached a stage in their life where they can afford what they  
want, whatever the cost and are willing to pay for it. My guess is that the  
latter is the smallest component of the B-J car auction market, and the most  
critical in regards to value received for funds expended.
 
I would suspect that a lot of discretionary spending will be coming to a  
screeching halt in the next 24 mos., most particularly high end items. Not too  
many Ferraris, or Hemi-Cudas for that matter, that one can buy for the $800.00  
rebate Congress will be sending in March. The really exclusive one-off or 
Enzo  cars will not change much, they are like the yachts that the "super-rich" 
and  old money buy, in that rarified I want it and I'll just write a check for 
it  drawn on the trust fund grouping. As for the rest of us, retired guys like 
 Willie and I will pretty well continue onward, heck he lives in AR and even 
if  he decided he was sick of the world there wouldn't be a repo guy with the 
balls  to screw with anyone who lives up there anyway, and I'm just living off 
of what  is essentially the deferred compensation for the paltry sums that 
civil servants  are paid before they actually achieve the Nirvana, with toys 
only available in  cases of capital murder or such, but not purchased with 
anything but toy money,  but in the real world where we have all lived, and 
most of 
us will continue to  live it will soon be time to circle the wagons, hold on 
to what we have and  enjoy it, but put off "upgrading" to a new 430 from our 
3x8 cars. In some cases,  through probably not with 430's some folks will end 
up 
like the commodity  traders who wait too long and then actually have to buy 
the rail car full of  corn, with few or no buyers for their positions on the 
list and the sad fact  that they will either lose their down payment or deposit 
or buy the car and  either have fun with it or try to sell it themselves. I am 
going to guess that  it will be the Bentley folks that will probably be hit 
the worst but that is  purely conjecture on my part.
 
I feel fortunate in that the only cars that I would anticipate selling are  
my "commodity" cars,the daily drivers or later model Rolls that were never  
bought with anticipation of anything but depreciation because they are pretty  
much standard cars (for a PMC) at least and if I drive them until the market  
recovers, or the floor plan financing company at the Jaguar dealership is  
pressuring them to sell some of their new stock and I'm willing to trade into  
one 
of them accepting about auction value for my car in exchange for true  
action/wholesale price for their new one. I may position myself so that if the  
"crash" in values brings about a jeopardy sale of something I really want I can 
 
buy it, but I'm not sure I will anyway. I think this is essentially the common  
sense approach of most of us who are fortunate enough, lucky enough, or smart  
enough to not have let our economic reach exceed our grasp. 
 
The upside will be that some of the good guys, Tom Reynolds for instance,  
may have a chance to get back into the world of exotics, which is essentially  
defines as buying a car with the up front expectation that the cost-benefit  
analysis of the transaction, exclusive of its intrinsic/intangible value begins 
 
in the negative and goes downhill from there. It is, essentially, a zero sum  
world and when someone loses someone else will,over the long term, gain.
 
Personally, I know there are a number of dealers on the list, and those are  
the guys with the insight into the upcoming mess. I have but an undergraduate  
degree in Economics and that dates back to the days of John Maynard Keynes, 
and  my wife says Adam Smith as well. These folks are in the field every day, 
and  keep their skills honed as a matter of necessity. I'm,.as I said, going 
with  Erik on the outcome of the current economic process, while acknowledging 
that  even the foreign government owned investor groups, particularly those 
holding  funds in the sub-prime funds.
 
Dr. Steve  

1964 Rolls  Royce Silver Cloud III...........1975 Pontiac GV Conv.
1980 MB  450SL..................................1982 RR Corniche
1985 MB 280 GE  G-Wagen................. 1985 GMC Brigadier 20 Ton 
Winch/Wrecker
1988 Rolls  Royce Silver Spur................1990 Cadillac "Eagle" Hearse
1994 F-350  Powerstroke 4x4................1995 Ferrari 348 Spyder
1996 Bronco  ......................................2000 Lincoln Town Car
2004  Excursion...................................(+ Audrey's 2x MB's)
and  a
1976 Fire Truck...................................HAHN, WARNER &  SWASEY- 
DUPLEX 
DIVISION  HOWE  APPARTUS . MODEL #R400 FIRE  TRUCK w/a 100' Tower


Dr. Stephen B. Spies, CES,  CFI
Director, Forensic Sciences Laboratory
Explosives Engineering  Technologies

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