Last post on Jan 28, 2011 at 11:39 AM
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#118 of 125 Re: Sorry to say, but... [hpmctorque]
Jan 27, 2011 (6:50 pm)
Interesting discussion here. As I write this, I'm watching the Mecum auction. So, if we're saying the collector car hobby will decline, that would not bode well for collector car auction companies. Perhaps the major players like Barrett-Jackson, Mecum and RM will be able to survive. But, there are a lot of 2nd and 3rd tier players (Worldwide, McCormick, Hollywood Car Auctions, etc. and maybe Russe & Steele and Leake) that may go by the wayside.
To counter that, I will note that this evening, Mecum announced their website recently reached a record number of hits. And, naturally, last week, Craig Jackson and Steve Davis (BTW, would somebody PLEASE either tear off those ridiculous sunglasses or give this guy a red-tipped cane and a seeing-eye dog) touted their annual mantra that an increased percentage of their bidders (at least those who ponied up for a bidder's pass) were first time bidders. So, if you believe these are "market indicators", the health of the collector car market may become more robust.
PS. - please indulge me for another Steve Davis rant . . . would somebody please tell that buffoon he's inside???? Fashion Tip 101, loose the Oakleys! And, not every car that crosses the auction block is a "once in a lifetime opportunity". OK, thanks. I feel better now.
#119 of 125 Re: Sorry to say, but... [parm]
Jan 27, 2011 (8:23 pm)
touted their annual mantra that an increased percentage of their bidders (at least those who ponied up for a bidder's pass) were first time bidders. So, if you believe these are "market indicators", the health of the collector car market may become more robust.
I wonder how many first timers were investing in Dot.Com stocks in 2000 and in Real Estate in 2008...
Craig Jackson and Steve Davis need to learn the lesson of the "shoe shine boy". I didn't spot him prior to the Real Estate crash, but I sure as heck spotted him prior to the Dot.Com collapse. The local news ran a story about a 12 year old kid investing his allowance to buy Dot.Com stocks over the internet... This was in Dec 1999...
Rockefeller was getting his shoes shined by a young boy, and the boy offered him some free advice on a stock. A tip if you will. Its assumed the boy had no idea who Rockefeller was and wanted to help the guy out. Rockefeller took a tip alright, but not the tip the boy gave him. He realized that if a shoe shine boy had advice on the market it must be overbought, and if it was overbought it was about to crash, about a year later it did just that, and Rockefeller pulled out just in time.
#120 of 125 Re: Sorry to say, but... [garv214]
by MrShift@Edmunds HOST
Jan 28, 2011 (7:55 am)
The last thing you want to do is swallow the optimism from the very parties that profit from the optimism. Listen to some of last year's Cramer predictions on stock. Hilariously wrong.
You have to look at these auctions as real time entertainment. Ever been to a "real" auto auction---it totally sucks. But these things are "events"---you go to socialize, and to be fair, it's a great place in terms of convenience. You don't have to travel all over the country to see the type of car you might be interested in.
These guys are marketing geniuses.
The downside? In most cases, you are going to pay 20-25% over market and so you have to be in for the long haul.
It would be the very rare B-J car that could be sold in the private party market for more than 65% of what you see as a closing price on the block.
That's what it costs to be "in the show".
With the very high HIGH end stuff, it's sort of a different story. Where I live you can't swing a cat without hitting a '69 Chevelle, but if you're hunting for a rare muscle car, or a vintage American race car, or a concept or prototype this or that, B-J might be the place to find it.
I've been to B-J a number of times, and I can tell you that a lot of the cars are not worth the money. But, oddly enough, when you're there and the bidding is furious, they *seem* like they are worth the money---all the paint chips and scratched trim and wobbly paint seems to disappear.
Now and then, you do see really superior cars, of course, and it's a great place to drool and fantasize.
#121 of 125 Re: Sorry to say, but... [Mr_Shiftright]
Jan 28, 2011 (8:47 am)
We've touched on this before in other threads, but I am stunned by how many dealers are buying cars at these auctions. I've been watching the televised auctions several years and can now recognize who many of the dealers are. How do these guys make money buying cars at retail prices and expect to make a reasonable profit????
Now, admittedly, the bulk of what dealers buy are on Tues, Weds & Thurs before the high-dollar iron rolls out on Friday & Sat. And, I will say I do see some nice deals from time to time during these early days of an auction. But, with all of the major auction companies posting their sales results online, any schmO with internet access can see what a car sold for at auction.
Some of you might remember I ran into this situation this past summer with a 1965 Tempest convertible that was tweaked and badged to look like a GTO. It was a tasteful job and the dealer was up front that it was not a real GTO. But, I happened to find out he bought it one year before at a Mecum auction and paid what I (and Shifty and others in this group) considered to be the absolute top dollar for this car - $19K. I offered him $19K, but he was adamant about wanting to make a profit (swore he'd never taken a loss on a car before) and refused to take anything less than $23K or $24K - so I walked.
Yes, I agree that most of the sale prices at Barrett-Jackson are obscene. But, when you have more money than God (as many in that crowd typically do), I guess it really doesn't matter.
#122 of 125 Re: Sorry to say, but... [parm]
Jan 28, 2011 (8:56 am)
Well, you seem take it a bit more serously than I do:
You say: " most of the sale prices at Barrett-Jackson are obscene. "
I'd say: " most of the sale prices at Barrett-Jackson are silly. "
You say: "when you have more money than God"
I'd say: "when you have more money than sense"
Like Shifty says, it's just a show, one put on by the best used car salesmen in the land. Nothing against that, but why would we expect something other than what we get?
#123 of 125 Re: Sorry to say, but... [texases]
Jan 28, 2011 (10:58 am)
B-J is a show. No question about that and I buy into it as I find much of it entertaining. Guilty as charged. But, at the end of the day, when all the hoopla has died down, real cars have changed hands for real money. So, even though it is conducted under a big top (literally) in a circus-like atmosphere (though not as outlandish as a Russo & Steele auction), its still a business.
To get back on point, I wonder how (or if) the business of collector auctions will be as successful as they apparently are today, given the downward direction of the hobby that is being predicted here.
Personally, I don't think the collector car market has anything to worry about in my lifetime (I'm 50). People will always want old stuff and cars are usually at, or near, the top of a lot of guys (and gals) list. From what I can see, the public's interest in collector cars seems to be getting stronger, not weaker. As an example, just this week, the History channel debuted a new show (Desert Car Kings) about a salvage yard in Arizona where they take an old car in bad shape and fix it up in two weeks and sell it at auction. That's just one of several cars about old cars that weren't on air a few years ago. TV networks spend a lot of money researching to provide programs the public wants (though that still doesn't explain Laverne & Shirley!) and there's apparently a big enough demand from the public to warrant that investment.
#124 of 125 Re: Sorry to say, but... [parm]
Jan 28, 2011 (11:08 am)
I'll have to catch that show - do they compare the sales price to the money and time spent?
And I agree, those of us that can remember cars of the 60s and early 70s will keep things going, but I do wonder about those 40 and under - some will want to own old iron, but it will be more a curiosity to most of them.
#125 of 125 Re: Sorry to say, but... [parm]
Jan 28, 2011 (11:39 am)
You're saying, in your second paragraph, that demand for collector cars appears to be strong. Maybe so, based on the auctions you cited, but I still wouldn't choose to invest in a collector car auction company.
As every mutual fund display of past performance must disclose, "past performance is not indicative of the future," or words to that effect.