Determining the Market £ for a rare car...doable?
Discussion
Hi,
Friend of mine has come into a bit of money. Appx.£850K. He has an idea to buy up virtually all of the available UK stock of one particular (older) niche high-performance car and then gradually dripfeed them on to resale after a year or two for a big hike in price and a tidy profit. Knowing what he's looking at, I think it might work as there are only 9 or 10 available in the UK and they indeed could quite easily be viewed as 'blue-chip' investements already. Obviously with him controlling most of the available UK stock he can then start to determine the resale price further down the line. He thinks 50-75% profit on each is doable. I'm not going to say what the car is as I imagine he would prefer I don't broadcast it. All I'll say is it's exotic and Italian. You lot can have some fun guessing though!
I am scratching my head a little on the morals of the idea but hey-ho, it's his money to risk!
Thoughts?
Friend of mine has come into a bit of money. Appx.£850K. He has an idea to buy up virtually all of the available UK stock of one particular (older) niche high-performance car and then gradually dripfeed them on to resale after a year or two for a big hike in price and a tidy profit. Knowing what he's looking at, I think it might work as there are only 9 or 10 available in the UK and they indeed could quite easily be viewed as 'blue-chip' investements already. Obviously with him controlling most of the available UK stock he can then start to determine the resale price further down the line. He thinks 50-75% profit on each is doable. I'm not going to say what the car is as I imagine he would prefer I don't broadcast it. All I'll say is it's exotic and Italian. You lot can have some fun guessing though!
I am scratching my head a little on the morals of the idea but hey-ho, it's his money to risk!
Thoughts?
There's an old Internet rumour about a certain multi sided shape doing this very thing with the BMW Z8.
Basically they just went & bought every example they could, it's easy to do especially if you've got deep pockets.
Every time a car became available, they jumped on it. Apparently it didn't take too many before the market caught on & anyone who was shifting one on just went straight to them.
You still can't get them cheap
Basically they just went & bought every example they could, it's easy to do especially if you've got deep pockets.
Every time a car became available, they jumped on it. Apparently it didn't take too many before the market caught on & anyone who was shifting one on just went straight to them.
You still can't get them cheap
CarlT said:
There are plenty of risks, but one to consider is that there may only be 10 in the UK, but how many in the World? Very easy to import one these days...
If it's RHD then there won't be many options - Japan, Ireland, SA, Aus/NZ? I expect the Aus/NZ prices will be very high though.He is unwise to put all eggs in one basket, however much he may want the idea to be a good one.
One third in property, one third in gold, one third in cash. That's a good way to invest a big sum properly, for the long term.
Forget about fast cars and fine wines, unless you've got another large sum somewhere else to fall back on.
One third in property, one third in gold, one third in cash. That's a good way to invest a big sum properly, for the long term.
Forget about fast cars and fine wines, unless you've got another large sum somewhere else to fall back on.
De Tomasa Pantera's? Ooh send us a pic and a sound clip of them all in a big shed if he does.
On another note, how good a friend is he? What does he really know about cars? I feel an Emporers Clothes scenario coming on.... Source for him a very rare if not unique Austin Princess 1.6HL, for £840k he is free to spend the rest on "minting her up" and simply sit back waiting for however long it takes for the market to change?
On another note, how good a friend is he? What does he really know about cars? I feel an Emporers Clothes scenario coming on.... Source for him a very rare if not unique Austin Princess 1.6HL, for £840k he is free to spend the rest on "minting her up" and simply sit back waiting for however long it takes for the market to change?
Ali2202 said:
Friend of mine has come into a bit of money. Appx.£850K. He has an idea to buy up virtually all of the available UK stock of one particular (older) niche high-performance car and then gradually dripfeed them on to resale after a year or two for a big hike in price and a tidy profit.
Your friend is an idiot. Most particularly, how is he going to buy up all the stock at rock-bottom prices without the market knowing what he's doung? The market will sense the increase in demand caused by his buying and prices will rise accordingly. He will end up with a stock of expensive old cars. As soon as he starts to sell them the excess supply to market will cause prices to fall. He will lose money."Bunker Hunt" tried sometnig similar and ended up bankrupt,
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
Without even thinking about the market forces that have been explained already I bet it would cost more money than you'd make to store, maintain and secure 10+ examples of some tasty motors.
You would need a large, climate controlled, secure facility for this. Not cheap.
That's one fkuck of a sum of cash to find down the back of the sofa though. Lucky chap!!
You would need a large, climate controlled, secure facility for this. Not cheap.
That's one fkuck of a sum of cash to find down the back of the sofa though. Lucky chap!!
VoziKaoFangio said:
Forget about fast cars and fine wines,
Dont agree on the fine wines comment. The market in China for fine wine (especially first growth claret) is exploding and will only get bigger.Still a very good investment if you have the cash to buy en primeur but as above I still wouldnt put all my eggs in one basket (or bottle in this case).
Its not that daft 4 Star Classics seem to be cornering the market in BMW 3.0 CSL's they have three or four at the moment, interest is high and on this basis they seem able to pretty much dictate the bench mark pricing on these vehicles.I like your friends style and love modern classic cars, but unless I was already wealthy prior to the windfall I wouldn't be doing it.
Davey S2 said:
VoziKaoFangio said:
Forget about fast cars and fine wines,
Dont agree on the fine wines comment. The market in China for fine wine (especially first growth claret) is exploding and will only get bigger.Still a very good investment if you have the cash to buy en primeur but as above I still wouldnt put all my eggs in one basket (or bottle in this case).
smileymikey said:
Its not that daft 4 Star Classics seem to be cornering the market in BMW 3.0 CSL's they have three or four at the moment, interest is high and on this basis they seem able to pretty much dictate the bench mark pricing on these vehicles.I like your friends style and love modern classic cars, but unless I was already wealthy prior to the windfall I wouldn't be doing it.
specialising in selling a model, isn't quite the same as buying them all up as an investment. Ozzie Osmond said:
"Bunker Hunt" tried sometnig similar and ended up bankrupt,
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
That was quite an interesting case. He made a lot the money from Silver Futures, and used them to build up large quantities of Physical Silver.http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
The problem came when the Exchange used their right to change the margin requirements of their Futures, so he had to liquidate his Physical Silver to meet the new requirements, meaning he unloaded all at once, when everyone knew he was the only seller.
I think that's how it went down anyway, it was a long time ago that I learned about it.
If buying something Physical, with cash, the same can't happen. Although lots of other things can, which could end up causing problems.
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