Wednesday, August 6, 2014

Financial counseling


Original photo which included that white space: Bonhams
It's one thing to note the current insanity in the alternate universe of collector cars right now; it's another to try and make some sense of what's really going on and where this whole hot mess is going. And doing any of this requires a steady commitment to seek a sort of Truth and not just throw up your hands in frustration (or just throw up) and go find out what's happening at the community theater or something.

I've paid attention to a few of these cycles, all of which were reflections of certain market conditions that grew into speculative rushes and eventually collapsed as such things are wont to do. This time, though I'm really wondering what is going on. This is way too big and has gone on too long and makes increasingly little sense. Emerging market players? Tax dodges? Has market inertia just become a perpetual motion machine?

I think one fundamental market condition underpins a lot of the general runup lately: there is (technical term here) fuck-all else that makes a lot of sense in the current investment sphere right now, especially if your idea of "makes sense" is "consistent 10+% annual returns." But really, unless you're in it for the long haul with green energy or biotech or something else on the relative margins, the opportunity to play pump-and-dump games is slim pickings right now. Indices may be posting record highs, but it's a broad situation; there's no hot sector right now. (Bo-ring.)

So we go to collectibles, especially ones as approachable and media-friendly and well-documented (sort of, occasionally subject to inaccuracy and outright fraud) as cars. And who can argue with the appeal? Sure, if you've got the funds, go right ahead and pick up a Gullwing or Carrera RS or something else that looks pretty and costs something respectable. Have some fun, impress your friends with arcane facts. Next year it'll be up God knows how much.
$4.2 million worth of alloy-bodied 300SL. Photo: Gooding & Company
Of course, the fun part happens when all those obvious cases - the Gullwings, the Carrera RSs, the Daytonas and Cobras and Miuras - have all been worked up into low Earth orbit and people, especially people of variable morals, start scrounging around for the Next Big Thing that will take the market by storm and earn unspeakable returns for the prescient, and isn't that you, my dear favored client?

And with that we're off, and the greedy go after what most collectors would consider the bottom-feeders of the classic marques and crank up the hype. We don't need to discuss what's happened to the market values of E30 M3s and 901-chassis 911s. Anything with a Ferrari badge is again being grabbed like a free margarita. If it can be tangentially linked to something great, it becomes great by association and is therefore so much more valuable.

And what happens after all the investment-grade-by-association games get played? Two things: First, everyone becomes an expert and automotive "investment" advice starts to get batted around in certain circles like fantasy sports hunches. Second, everyone goes scurrying into the shady corners to find potential gems - or at least chunks of glass that can be polished up and offered to the market in some form, hopefully before the whole sector craters.

We are now very deeply situated in that last part. Everyone is offering next-big-thing advice, and everyone is casting about for something that just might catch fire in the market. It's now gotten to the point where quasi-respectable sources are putting a "buy" rating on such moaning dogs as the Jaguar XJ-S (among other debatable cases, here) and the Chrysler/Maserati TC (Hemmings this month, God help their credibility).

Joe Kennedy knew that it was time to run from the stock market in 1929 when he was getting investment tips from his shoe-shine boy. If an amateur blogger can be considered to be at about that same position on the food chain in an era when it is somehow cool to wear sneakers with a suit, then I suppose it's my turn, no?

So, without further ado, I present the SoM MarketMotion℠ Hot List. Standard classic-car investment rules: car should be over about twenty years old, it should have some sort of important associations or history or ability to somehow further abuse the word 'iconic,' and be completely and oh-so-unfairly overlooked (so far) by well-informed collectors (read: speculators). Make notes, check that savings account balance, get in now before the rest of the market gets a clue.

Alfa Romeo 75/Milano
Photo: Wikipedia
Anything with an Italian nameplate is on a Mille Miglia-grade run right now, including the 75's esteemed predecessors like the Giulietta and GTV. This one has all the right ingredients to earn its due as an iconic part of Italian motoring: a snarling V-6 powering the right pair of wheels, a chassis developed by the people who basically invented Grand Touring, avant-garde styling. (So just like a Stratos, really. Have you seen prices on those lately?)

1987-1995 BMW 7-Series (E32)
Photo: Wikipedia
One of the most historically significant cars of the past few decades, the E32 (protip: always use BMW's in-house chassis code to boost your credibility) was the first car that took the Best Car In The World fight straight to Mercedes. Timeless styling and state-of-the-art tech were standard across the range; the 750iL featured an iconic V-12 and is the MarketMotion℠ pick for best market return potential in this line.

Saturn S-Series
Photo: ibid.
Child of the kind of radical project only General Motors could think to do, the Saturns were nothing less than a leap away from Standard Detroit thinking and towards the zeitgeist at the heart of the Nineties: earnestness. In its pleasant unpretentious good cheer and usability and happy-vibe sensibilities (no dealer bickering! no parking lot dings!) the Saturn SL sedan is as iconically a part of the Nineties as the Mustang was for the Sixties and the BMW 3-Series for the Eighties.

Renault Alliance
Photo: Wiki...wait, are you even reading this?
The tragic total absence of French cars from the American marketplace has provoked a deep reassessment of some of the most iconic nameplates in automotive history. While the Peugeot 505 has started to find an appreciative audience among the nation's influential younger-and-hipper set and the Renault 5/LeCar continues to move into the space occupied by the beloved Citro├źn 2V, the MarketMotion℠ experts believe that the time has come for the undervalued Alliance. Winner of numerous awards in its day, available as a (potentially much more valuable) convertible, still usable on a regular basis: the Alliance has all the makings of an everyday appreciating classic.

Triumph Spitfire
Call your Mom. Buy some flowers for your girlfriend.
As the prices of such iconic machines as the Jaguar E-Type and MG TC continue to climb, there is every reason to expect the lovely Spitfire to quickly follow suit. Proven a consistent race winner, that graceful sheet metal and minimalist cockpit speak to a lost era of pure motoring pleasure. Abundant available parts and club support mean that this investment won't be an overnight flash-and-crash, either.

Remember, the market is moving faster than a comp Daytona these days. Don't let the opportunity to be part of this fantastic investment opportunity pass you by.

(Disclaimer: All opinions, news, analysis, prices or other information contained on this website are provided as general market commentary and does not constitute investment advice, nor a solicitation or recommendation for you to buy or sell, as if you haven't figured that out already. Past results are not indicative of future returns. Your mileage may vary. Take any of this seriously and try to call me on it and any institution with the balls to call itself a court will laugh you into exile. Donations willingly accepted. You have something hanging out of your nose.)

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