How to value your FD
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Joined: Jul 2001
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From: Charlottesville VA 22901
Fritz... I know you enjoy a healthy debate and suspect you know I am somewhat of an economist, having written joint papers with the Fed Reserve Bank of New York and in the Journal of Real Estate Economics among many publications -- to establish some cred. There was virtually no stimulus of the kind you seemed to be suggesting from January 2009 through January 2017. The nearly trillion dollars called the stimulus back in 2009 was almost entirely wasted on giveaways and investments by the government in their pet industries, which almost all resulted in nothing or worse. Solyndra is one of the biggies there. Much of the last administration's economic effects were to stymie the oil, gas, and fossil fuel industries and to harm many small -- and large -- businesses through over-regulation. Raiding Gibson Guitars with black outfitted EPA officials with machine guns and shutting them down, because they were supposedly importing rosewood from Madagascar improperly is a type of negative stimulus. These are just examples. My point is that we had the opposite of "stimulus" in the classic sense of efforts and money being focused on growing business and the economy and the GDP numbers during the period reflect that. Slow growth is not the "new normal", it is a direct result of policy.
While the stock market may well go up some and then come down some, there is not going to be any dramatic anything. No crash. You can relax. Things are going to continue getting at least slowly better for many years to come. Incomes, which have stagnated for the past decade will rise at least somewhat and that would be accelerated by ending most provisions of the ACA, which caused so many workers to be cut back to under 35 hours so the businesses didn't have to provide the increased health care required for full time workers. As there are more non-union workers, effective incomes increase, because they get back the large cost of dues. I could go on, but won't. The stock market and GDP have gone up, because business has already been effected by deregulation and has increased capital investment, because they know this administration is supportive of their growth.
While the stock market may well go up some and then come down some, there is not going to be any dramatic anything. No crash. You can relax. Things are going to continue getting at least slowly better for many years to come. Incomes, which have stagnated for the past decade will rise at least somewhat and that would be accelerated by ending most provisions of the ACA, which caused so many workers to be cut back to under 35 hours so the businesses didn't have to provide the increased health care required for full time workers. As there are more non-union workers, effective incomes increase, because they get back the large cost of dues. I could go on, but won't. The stock market and GDP have gone up, because business has already been effected by deregulation and has increased capital investment, because they know this administration is supportive of their growth.
It's just one more major reason our economic picture isn't so great but don't tell anyone buying amazon that
Give me your prediction. Where do you see the US economy after Trumps 1st term?
Thread Starter
Joined: Jul 2001
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From: Charlottesville VA 22901
BTW car values across the board have sky rocketed and it's just one more bubble on the rise
Charlie Munger is one of the intelligent capitalists showing the ability of universal healthcare to help businesses.
Charlie Munger: There's a lot to be said for health care for all
Charlie Munger: There's a lot to be said for health care for all
Although classic car prices will drop in a recession, most owners who can weather the times just hold onto them so you don't always find what you're looking for. However, I don't think the rising prices of 80's and 90's cars has anything to do with the market. It has to do with the aging population. People who drooled over these as kids can now afford them and they're seeking the best examples to own and cherish. It's the muscle car boom for gen-x and young millennials. The values of 90's super cars will rise slowly over the next decade and then probably plateau. However "value" is based upon mileage and condition, so you can't buy one today at the top of the market and expect it to rise in value unless you park it in climate controlled storage. This $32k car will be worth $40-50k in 10 years...but you have to factor in driving less than 1,000 miles a year, performing all regular maintenance, and storing it too. If you can do all that for less than $10k you've got something of an investment...but you might be better off just putting that money into the stock market. So the take home here is, buy the best that you can afford, and drive it. Let someone else lose their shirt on storing a car for decades.
Although classic car prices will drop in a recession, most owners who can weather the times just hold onto them so you don't always find what you're looking for. However, I don't think the rising prices of 80's and 90's cars has anything to do with the market. It has to do with the aging population. People who drooled over these as kids can now afford them and they're seeking the best examples to own and cherish. It's the muscle car boom for gen-x and young millennials. The values of 90's super cars will rise slowly over the next decade and then probably plateau. However "value" is based upon mileage and condition, so you can't buy one today at the top of the market and expect it to rise in value unless you park it in climate controlled storage. This $32k car will be worth $40-50k in 10 years...but you have to factor in driving less than 1,000 miles a year, performing all regular maintenance, and storing it too. If you can do all that for less than $10k you've got something of an investment...but you might be better off just putting that money into the stock market. So the take home here is, buy the best that you can afford, and drive it. Let someone else lose their shirt on storing a car for decades.
Totally agree with this. I get way more than $1,000 of fun per year out of my car. So to me, no amount of value appreciation by storage will ever outweigh that! 
I am very happy to keep adding KM’s and rebuilding (yay for my stockpile of brand new OEM motor parts!) until I'm too old to drive!
Heck, my '83 FB is older than I am and it is in way better shape than me, so I see no reason not to run my FD for another 30+ years
Joined: May 2005
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From: Kennewick, Washington
My car will always be worth more to me than to someone else. However, if I find someone that values it more to them than to me, and is willing to make such an offer... then my next build will begin shortly thereafter.
Seven years ago you could have bought a "good" Porsche 964 1994 3.6 Turbo for $50,000 and its worth $350-400,000 today. Five years ago you could have bought a "good" Testarossa for $50,000 and today its worth $150,000. Ten years ago, you could have bought a "good" BMW E30 M3 for $20,000 and today its worth $100-150,000. (All these relate to condition and condition more than miles, though less so with the Ferrari.) The IRR's on any of these "investments" is far, far greater than you could have done in the stock market. The FD is probably most analogous to the M3.
I agree that the above are all great examples of cars that justify having hidden one away in storage as an investment. However (and sorry to be negative), I feel that the general populations perception of the rotary engine will unfortunately prevent the RX7 reaching those rates of appreciation.
Which partly makes me sad, but also happy because it means I will always be able to afford one!
I passed on a chance to buy a silver 91 NSX with 130k mi at 17.5k in 2013 and another red 91 NSX with 90k mi and CTSC blower for 27k in 2014. Beating myself up on both of these...
Thread Starter
Joined: Jul 2001
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From: Charlottesville VA 22901
I see average GDP growth of about 3-3.5% for his first term. I think unemployment will stay flat-ish, but Labor Force Participation Rates will move significantly higher, maybe to 65-66%, meaning many many more people are employed. I think median income for a 4 person family will go from maybe $52,000 per year to $55-56,000 per year. I see the stock market remaining solidly high, though not hitting 25,000. Home buying should continue strong and home prices should increase gradually. The most important of all this is the increase in LFPR. The average for the 2000-2008 period was about 66% and the average from 2009 to 2015 was 63.5% going to 62.5% at the beginning of this year. An increase here of several points means several million more employed.
Everyone and I mean everyone is painting a beautiful picture of our economy but nobody wants to talk about the number of people actually working or the even bigger elephant in the room, DEBT of all categories; personal, local, state and federal.
I hope you are right and the US economy is driving off into a lovely sunset. Love it! Fingers crossed that's what we see but not holding my breath especially when I see who is driving these cars
Thread Starter
Joined: Jul 2001
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From: Charlottesville VA 22901
Seven years ago you could have bought a "good" Porsche 964 1994 3.6 Turbo for $50,000 and its worth $350-400,000 today. Five years ago you could have bought a "good" Testarossa for $50,000 and today its worth $150,000. Ten years ago, you could have bought a "good" BMW E30 M3 for $20,000 and today its worth $100-150,000. (All these relate to condition and condition more than miles, though less so with the Ferrari.) The IRR's on any of these "investments" is far, far greater than you could have done in the stock market. The FD is probably most analogous to the M3.
Who knows who is right or wrong in this scenario. Will the market tank? Perhaps, but that has no bearing on supply of low mile, or clean stock FDs. If the market tanks, great, its another period to invest in the market; I am not retiring any time soon. The economy has its highs and lows. They aren't making these cars anymore.
Thread Starter
Joined: Jul 2001
Posts: 10,672
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From: Charlottesville VA 22901
Seven years ago you could have bought a "good" Porsche 964 1994 3.6 Turbo for $50,000 and its worth $350-400,000 today. Five years ago you could have bought a "good" Testarossa for $50,000 and today its worth $150,000. Ten years ago, you could have bought a "good" BMW E30 M3 for $20,000 and today its worth $100-150,000. (All these relate to condition and condition more than miles, though less so with the Ferrari.) The IRR's on any of these "investments" is far, far greater than you could have done in the stock market. The FD is probably most analogous to the M3.
As mentioned the car market is in the biggest bubble I've yet to see. The stock market is in the biggest bubble I've yet to see. The market has gone from 6600 to 21000 in 8 years. PEs are at record highs while the GDP etc... isn't that great.
There are many people who are very optimistic. I'm just a natural contrarian LOL.
Thread Starter
Joined: Jul 2001
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From: Charlottesville VA 22901
I was investing left and right when the market tanked. Buy cheap they say ....
Who knows who is right or wrong in this scenario. Will the market tank? Perhaps, but that has no bearing on supply of low mile, or clean stock FDs. If the market tanks, great, its another period to invest in the market; I am not retiring any time soon. The economy has its highs and lows. They aren't making these cars anymore.
Who knows who is right or wrong in this scenario. Will the market tank? Perhaps, but that has no bearing on supply of low mile, or clean stock FDs. If the market tanks, great, its another period to invest in the market; I am not retiring any time soon. The economy has its highs and lows. They aren't making these cars anymore.
You and me and most of the long term members on the forum are FD lifers LOL. But the current people paying 32k for VR R1s with 34k miles are not from this world. Those ARE the buyers that won't be buying if the stock market is cut in 1/2.
A nice FD will never be worth less than 20k.
For a Testarossa I suppose, yeah. kind of puts things into perspective on an FD, doesn't it?
I've got friends who are into old Mercedes and old Bentley/Rolls Royce cars, and you guys should see how much those repair bills get up to. I mean you could buy a clean FD for what it costs to fix brake and suspension problems on some of these cars. You could buy a clean FD for the cost of fixing a convertible top & associated parts.
I've got friends who are into old Mercedes and old Bentley/Rolls Royce cars, and you guys should see how much those repair bills get up to. I mean you could buy a clean FD for what it costs to fix brake and suspension problems on some of these cars. You could buy a clean FD for the cost of fixing a convertible top & associated parts.
Thread Starter
Joined: Jul 2001
Posts: 10,672
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From: Charlottesville VA 22901
For a Testarossa I suppose, yeah. kind of puts things into perspective on an FD, doesn't it?
I've got friends who are into old Mercedes and old Bentley/Rolls Royce cars, and you guys should see how much those repair bills get up to. I mean you could buy a clean FD for what it costs to fix brake and suspension problems on some of these cars. You could buy a clean FD for the cost of fixing a convertible top & associated parts.
I've got friends who are into old Mercedes and old Bentley/Rolls Royce cars, and you guys should see how much those repair bills get up to. I mean you could buy a clean FD for what it costs to fix brake and suspension problems on some of these cars. You could buy a clean FD for the cost of fixing a convertible top & associated parts.
But I'm lovin what's going on in the market at this time
Thread Starter
Joined: Jul 2001
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From: Charlottesville VA 22901
Lucky number seven
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From: Detroit Metro, MI