$5M to invest in classics for long term..
Discussion
So a close friend who recently made alot of money by selling his business has asked me to work with him in putting together a collection of cars- he has no interest in quick flips and likes cars but isnt a mega car guy (he may not even see the cars let alone drive them!)- so very niche cars that he hasnt heard of or seen will not be of interest. All cars have to be sports cars. Acquisitons so far
1) Ferrari Enzo- Why?
-Last of normally aspirated hypercars (pre Hybrid drivetrains)
-Amazing dynamics and performance
-relative ease of ownership (!)
-Only made in small numbers
-Brutal looks
2) Mercedes Gullwing- Why?
-Awsome looks
-Relatively rare
-The best car from the best car company in the world
3) Lambo Miura
-Drop dead gorgeous looks
-Awesome perfomance in its time
-Did I say looks
4)A 60s Ferrari of some form
5)BMW Z8- awsome looks, clasic in the making
6)Alfa 8C- awsome looks, alfa is about to make a come back
The 1st three have been purchased. This leaves $1.5M to spend on 4-6. Whould you agree with my approach
1) Ferrari Enzo- Why?
-Last of normally aspirated hypercars (pre Hybrid drivetrains)
-Amazing dynamics and performance
-relative ease of ownership (!)
-Only made in small numbers
-Brutal looks
2) Mercedes Gullwing- Why?
-Awsome looks
-Relatively rare
-The best car from the best car company in the world
3) Lambo Miura
-Drop dead gorgeous looks
-Awesome perfomance in its time
-Did I say looks
4)A 60s Ferrari of some form
5)BMW Z8- awsome looks, clasic in the making
6)Alfa 8C- awsome looks, alfa is about to make a come back
The 1st three have been purchased. This leaves $1.5M to spend on 4-6. Whould you agree with my approach
Carrera GT - big yes.
McLaren F1.
The Z8 is a funny one. We all know they've been driven up in price wildly by Mr. Clever Clogs but I wonder how much room they've got to go.
How about a Stratos?
Also I was looking at a BMW M1 recently, an awful lot of motorsport pedigree for the money, could be worth a look.
Nice project to have.
McLaren F1.
The Z8 is a funny one. We all know they've been driven up in price wildly by Mr. Clever Clogs but I wonder how much room they've got to go.
How about a Stratos?
Also I was looking at a BMW M1 recently, an awful lot of motorsport pedigree for the money, could be worth a look.
Nice project to have.
randlemarcus said:
Long term, I would be tempted to wait for the current bubble to burst and then pile in. That's over,say, a ten year period.
In the short term, tell him to go play, and buy cars he loves, as keepers are not quite as painful when their premium vanishes.
Nail on head. I don’t think that now is a good time to buy classic cars just for the sake of making money with them.In the short term, tell him to go play, and buy cars he loves, as keepers are not quite as painful when their premium vanishes.
Paracetamol said:
So a close friend who recently made alot of money by selling his business has asked me to work with him in putting together a collection of cars- he has no interest in quick flips and likes cars but isnt a mega car guy (he may not even see the cars let alone drive them!)- so very niche cars that he hasnt heard of or seen will not be of interest. All cars have to be sports cars. Acquisitons so far
1) Ferrari Enzo- Why?
-Last of normally aspirated hypercars (pre Hybrid drivetrains)
-Amazing dynamics and performance
-relative ease of ownership (!)
-Only made in small numbers
-Brutal looks
2) Mercedes Gullwing- Why?
-Awsome looks
-Relatively rare
-The best car from the best car company in the world
3) Lambo Miura
-Drop dead gorgeous looks
-Awesome perfomance in its time
-Did I say looks
4)A 60s Ferrari of some form
5)BMW Z8- awsome looks, clasic in the making
6)Alfa 8C- awsome looks, alfa is about to make a come back
The 1st three have been purchased. This leaves $1.5M to spend on 4-6. Whould you agree with my approach
Muira and Gullwing are safe bets, as would something like a Ferrari 250 Lusso or 275 GTB/4 etc.1) Ferrari Enzo- Why?
-Last of normally aspirated hypercars (pre Hybrid drivetrains)
-Amazing dynamics and performance
-relative ease of ownership (!)
-Only made in small numbers
-Brutal looks
2) Mercedes Gullwing- Why?
-Awsome looks
-Relatively rare
-The best car from the best car company in the world
3) Lambo Miura
-Drop dead gorgeous looks
-Awesome perfomance in its time
-Did I say looks
4)A 60s Ferrari of some form
5)BMW Z8- awsome looks, clasic in the making
6)Alfa 8C- awsome looks, alfa is about to make a come back
The 1st three have been purchased. This leaves $1.5M to spend on 4-6. Whould you agree with my approach
Enzo, Z8 and Alfa 8C are IMHO, all too modern - not a safe bet for the money - especially as he's not a car person.
I'd have bought a real Cobra instead of the Enzo - never gonna loose money on one of them - especially with Shelby now dead.
There's a nice Audi Sport Quattro SWB currently for sale for €275,000 and the prices of those are only ever going up for what is possibly the most iconic of the Group B rally cars.
Nice 'chinese' eye Bentley Conti S3 perhaps...?
Lots of options......& a nice position to be in really.
A 250 Lusso instead of 4,5,6 is probably a safer bet. 250 series Ferraris are a very safe bet. Also fewer car need less space.
Other option might be:
Bugatti 35 (hoping its not a bitsa)
French 30's cars bodied by Saouchik, Figoni, Chapron, etc.
Something eligible for Mille Miglia (Etceterinis are great)
Anything one-off built before 1970 (especially Italian or French)
Ex-works Integrale
Aston DB mk3
early 911 turbo
Other option might be:
Bugatti 35 (hoping its not a bitsa)
French 30's cars bodied by Saouchik, Figoni, Chapron, etc.
Something eligible for Mille Miglia (Etceterinis are great)
Anything one-off built before 1970 (especially Italian or French)
Ex-works Integrale
Aston DB mk3
early 911 turbo
Zonda's
Very rare and iconic cars, analogue and pretty much had the hypercar scene to themselves, I can see them going for silly money in the long term
996 GT3 RS, last of the true analogue Porsche, 4.0RS as the last of the engine line
I would avoid anything that's already hyper inflated like the very rare classic ferrari's they could loose a fortune when the bubble bursts
Very rare and iconic cars, analogue and pretty much had the hypercar scene to themselves, I can see them going for silly money in the long term
996 GT3 RS, last of the true analogue Porsche, 4.0RS as the last of the engine line
I would avoid anything that's already hyper inflated like the very rare classic ferrari's they could loose a fortune when the bubble bursts
Edited by Dave Hedgehog on Wednesday 5th February 14:40
Its great fun...that's for sure. Agreed on the Porsche GT. He loves them. However, I prefer the 911S and the 997 GT3 RS because they personify Porsche in a way that the Carrera doesn't (I also hate the GT on/off clutch)
He's looking at a 10+year time horizon and we both feel that when new money wakes up (China, India etc) start taking an interest, they will be of a generation that will recognize cars like Enzo.
The market is hot but his work brings him in close contact with some very wealthy people and they remain very bullish on classic cars and other asset classes. The money floating round at the very top is driving the activity and sees no sign of slowing.
He's looking at a 10+year time horizon and we both feel that when new money wakes up (China, India etc) start taking an interest, they will be of a generation that will recognize cars like Enzo.
The market is hot but his work brings him in close contact with some very wealthy people and they remain very bullish on classic cars and other asset classes. The money floating round at the very top is driving the activity and sees no sign of slowing.
Aswell as the Gullwing, etc I'd be looking at stuff which is in the bottom half of it's appreciation curve and going upwards.
70s, 80s or even 90s stuff.
Countach, Diablo limited editions.
F355, 550 Maranello Barchetta
993 Turbo S
Stuff like that. It may take a little while longer to gain, but if you buy wisely you should realise more gains?
Saying that, I'm always sceptical about people buying cars purely as investments and not to enjoy driving them.
70s, 80s or even 90s stuff.
Countach, Diablo limited editions.
F355, 550 Maranello Barchetta
993 Turbo S
Stuff like that. It may take a little while longer to gain, but if you buy wisely you should realise more gains?
Saying that, I'm always sceptical about people buying cars purely as investments and not to enjoy driving them.
Is he actively trying to lose money? If so, I can help him out. I'll offer him far less hassle, far less uncertainty, but the exact same end result.
We'll ignore the fact that it's classic cars, and he's not a "car person". That's irrelevant.
He's a successful businessman, so get him to look at it purely as an investment. He's suggesting pumping money into an uncertain asset class that he doesn't understand at all. He knows so little about it that he wants advice from "an expert" - despite (and don't take this personally) that "expert"'s first response to be to jump onto a forum to ask. Even then, he wants to restrict himself to individual assets that he's "heard of". On top of that, it's an asset class with values that - in many eyes - are already in a bubble. On top of THAT, the individual assets require expensive storage and maintenance to retain value. There's very little in the way of ongoing income from them, and what there is is utterly unpredictable.
Does that sound like the description of a good investment?
Like I say, I'm happy to guarantee him a significant annual loss, without any of the hassle. PM for the bank details to send the regular, large payments to...
We'll ignore the fact that it's classic cars, and he's not a "car person". That's irrelevant.
He's a successful businessman, so get him to look at it purely as an investment. He's suggesting pumping money into an uncertain asset class that he doesn't understand at all. He knows so little about it that he wants advice from "an expert" - despite (and don't take this personally) that "expert"'s first response to be to jump onto a forum to ask. Even then, he wants to restrict himself to individual assets that he's "heard of". On top of that, it's an asset class with values that - in many eyes - are already in a bubble. On top of THAT, the individual assets require expensive storage and maintenance to retain value. There's very little in the way of ongoing income from them, and what there is is utterly unpredictable.
Does that sound like the description of a good investment?
Like I say, I'm happy to guarantee him a significant annual loss, without any of the hassle. PM for the bank details to send the regular, large payments to...
TooMany2cvs said:
Is he actively trying to lose money? If so, I can help him out. I'll offer him far less hassle, far less uncertainty, but the exact same end result.
We'll ignore the fact that it's classic cars, and he's not a "car person". That's irrelevant.
He's a successful businessman, so get him to look at it purely as an investment. He's suggesting pumping money into an uncertain asset class that he doesn't understand at all. He knows so little about it that he wants advice from "an expert" - despite (and don't take this personally) that "expert"'s first response to be to jump onto a forum to ask. Even then, he wants to restrict himself to individual assets that he's "heard of". On top of that, it's an asset class with values that - in many eyes - are already in a bubble. On top of THAT, the individual assets require expensive storage and maintenance to retain value. There's very little in the way of ongoing income from them, and what there is is utterly unpredictable.
Does that sound like the description of a good investment?
Like I say, I'm happy to guarantee him a significant annual loss, without any of the hassle. PM for the bank details to send the regular, large payments to...
Nail hit on the wot he said etc. We'll ignore the fact that it's classic cars, and he's not a "car person". That's irrelevant.
He's a successful businessman, so get him to look at it purely as an investment. He's suggesting pumping money into an uncertain asset class that he doesn't understand at all. He knows so little about it that he wants advice from "an expert" - despite (and don't take this personally) that "expert"'s first response to be to jump onto a forum to ask. Even then, he wants to restrict himself to individual assets that he's "heard of". On top of that, it's an asset class with values that - in many eyes - are already in a bubble. On top of THAT, the individual assets require expensive storage and maintenance to retain value. There's very little in the way of ongoing income from them, and what there is is utterly unpredictable.
Does that sound like the description of a good investment?
Like I say, I'm happy to guarantee him a significant annual loss, without any of the hassle. PM for the bank details to send the regular, large payments to...
I'd never invest in classic cars, and I'm actually interested in the things.
Paracetamol said:
The market is hot but his work brings him in close contact with some very wealthy people and they remain very bullish on classic cars ......
Do the very wealthy people he knows have classic car portfolios? I know somebody whose classic race cars (which he has campaigned in anger) have appreciated hugely over the last few years but he's just sold rather more than $5M's worth, as one of the reasons is, that he feels the market is now peaking. Hindsight will tell us who is right
. Paracetamol said:
he may not even see the cars let alone drive them!
I don't understand why someone would invest in cars then. A) I don't think they're a great investment just at the moment, B) They take up a lot of space, C) Ownership of rare/classic cars is problematic at best. I wonder why her didn't go down the art route, or atleast a single car with significance?However, I still believe if it's his money it's his choice
Paracetamol said:
He's looking at a 10+year time horizon and we both feel that when new money wakes up (China, India etc) start taking an interest, they will be of a generation that will recognize cars like Enzo.
The market is hot but his work brings him in close contact with some very wealthy people and they remain very bullish on classic cars and other asset classes. The money floating round at the very top is driving the activity and sees no sign of slowing.
The market is hot but his work brings him in close contact with some very wealthy people and they remain very bullish on classic cars and other asset classes. The money floating round at the very top is driving the activity and sees no sign of slowing.
10 year is too short for modern stuff - and not for an investment.
If his plan was 25+ years you could have some speculative fun with some modern stuff, but they'd be no cast-iron certs with any of them, and in my view more so with the exotic supercars like Enzo's.
You could buy wisely now with a view to enjoying some serious proper old classics, and be reasonable comfortable with 'protecting' your investment while enjoying them.
But, as others have said, not being a car person and thinking your going to make short term money out of a classic car 'portfolio' is very funny.
No point in gambling just go for the stock Porsches and Ferraris that every 'collector' or 'investor' goes for. So long as new millionaires are being made there will be demand for these two main brands. Maybe branch out to Aston but that would be about it.
The key to investment is not to predict, define or create a market but to just join the same one as everyone else. Being boring and uninspiring is the key. Sadly.
Also, when a market falls they will be less illiquid and first to recover.
The key to investment is not to predict, define or create a market but to just join the same one as everyone else. Being boring and uninspiring is the key. Sadly.
Also, when a market falls they will be less illiquid and first to recover.
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