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Stock Market versus Classic Car Market


stude24
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classic car market has been coming down for several years now- do to many other factors. old age for one.................

 

if you want to make money, the stock mkt is generally superior, unless you own a ton of valuable sports cars like Ferrari.

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16 minutes ago, mercer09 said:

If you want to make money, the stock mkt is generally superior...

 

I agree with Mercer that the stock market, long-term,

has a better potential.

 

No one knows the short-term outlook for either market,

though some people may try to guess--especially about stocks--

and even go on television and look knowledgeable.

Occasionally, society gets hypnotized about some new topic.

However, the best advice for us all is to think rationally for

ourselves, never fall into the quagmire of panic, and never fear!

Edited by John_S_in_Penna (see edit history)
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Can't drive and enjoy equities on a nice summer day.  Just consider your collector cars as assets that may or may not give you a financial return on investment.  Their real returns are in enjoyment you derive from their use.

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One is for bettering ones self financially in preparation for for retirement or just in general.

 

One is a hobby that usually provides a return of some sort vs. Other past times, I know its getting to be a little worn out here but golf provides memories, like our hobby, and pleasure but no return at all.  Unless you have life changing money invested in a car or cars, dont sweat it.  Just expect volotility from both external economic factors as well as changing interests from passing fads, generational change etc.

 

Could be a great time for buying I guess, when selling is not so hot and vice versa..  

Edited by Steve_Mack_CT (see edit history)
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Whenever there's a downturn in the economy, we see it in our showroom first. February was pretty good, but March has been a desert so far. Not enough for me to be concerned, but there's probably a recession coming. The factors are many, but why would I let that stop me from enjoying my hobby? I don't see too many guys saying, "Well, looks like the stock market's down, better stop woodworking for a while."

 

As to whether the car market and the stock market are linked, well, that's only if your income is taxed at cap gains rate. I don't know many guys getting a paycheck every week who are basing their car buying decisions on whether their portfolio is down 10 points. They may, however, stop buying cars because they're afraid of losing their jobs. It all depends on how long and how deep it goes. It doesn't take much to spook a vast majority of Americans--we're an easily spooked people these days.

 

Cars are bad "investments" in the traditional sense, but at the same time they're a durable good that always has value. Instead of thinking of it as an investment or a money-making opportunity, look at it as a place to park some money where it won't turn into vapor because someone you don't know in a place that's not local to you does something ill-advised. You may lose some money, but short of a fire burning the car to ashes, you will always be able to get some or even most of your money back. Not many hobbies can claim the same.

 

Enjoy life. Do what you enjoy. Quality of life really matters. The economy always rebounds. Life goes on. Time is short. Don't live in fear.

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I suggest looking at antique cars as a saving account with a negative interest. Friend restored a '36 Packard Coupe. Eventually sold it for $33k, somewhat less than he had in it. As he was bemoaning the fact that he lost money on the deal I asked him this simple question. "If you hadn't restored your Packard would you have that $37k (the cost of restoration) in your checking account?"  His answer "Likely not, I would have spent it on something else".  So have some fun with your cars.  Maybe when you sell you will make a profit,  more likely not but old cars are a great way to accumulate money even if they often pay a negative interest rate.

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In 2009 after the crash there were a few cars on fire sales that were definitely going to rebound. The two I really wish I could grab up were both LaSalle cars. One a 27 Phaeton in old restoration needed paint work but I knew a previous owner and it was a great car for 25k. It sold within a couple weeks, was repainted and tried flipping in the 70k region, not sure if it resold.
 

The second one was a cabriolet that was Around 75% restoration finished but still  needed final bodywork, paint, then trim. All the bright work was done as well. That one was asking 15k, it sold in a couple days as what was done had been exceptionally well done and the body was in primer with solid wood. I guarantee he had 4-6 times that money into it.... no clue what happened to it but I’m sure someone loves it.

 

That said, my 401k rebounded a lot better than if I had pulled money out to buy either one but I still dream about those two cars and wish it happened at a different time when I could have jumped in... 

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32 minutes ago, Restorer32 said:

Maybe when you sell you will make a profit,  more likely not but old cars are a great way to accumulate money even if they often pay a negative interest rate.

That's about what the banks are down to now.  Close to being a place where they charge you to store your money. 

 

Might as well keep it in the garage with a chance for it to go up,  especially with elbow grease.  You have a little control over whether your car will atleast return what you paid for it,  but the chance for it to return a profit of some sort if you have the knowledge and ability to turn a #4 car into a # 3 or better.  Often all that's needed is alot of elbow grease and a few well sourced parts improvements especially if you bought something that had that neglected look. 

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I am not sure I would agree that the vintage car market has been down for several years. The last two or three yes , but only in specific category's. Many of the cars I like went up steadily up until recently and have for a couple of years been holding at

what is still a reasonably high price.

And like the stock market the general trend compared to say a decade ago is substantially higher prices. But definitely the graying of the hobby is effecting prices , especially in the lower 3/4 's of the price spectrum. 

 History has shown that regardless of short term events, recessions, world wars, depressions and such over the long term the stock market eventually trends upward again.

Vintage cars are definitely more difficult to predict. I doubt the truly great cars will ever be in danger of plummeting in value. But the others may well see a steady decline over time.

 

Greg in Canada

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42 minutes ago, Matt Harwood said:

 

Enjoy life. Do what you enjoy. Quality of life really matters. The economy always rebounds. Life goes on. Time is short. Don't live in fear.

My friend Matt has stated what I personally have experienced. "Time is short". I am happy to be here to read this as should all of you. The great pleasurable moments we have due to our interest in "used cars" has let us experience things we can think about and reflect upon when life emotionally or health wise is not so great. Think of your closest friends , I believe most of us know that we met them because of the interest in old cars, there would be no other reason to bring us together.

I live right next to one of the oldest and most revered horse race tracks in North America - I have never placed a bet - wouldn't know how to, have been there twice in 70 years, both for the track's anniversary celebrations . There are many ways to spend $ on things that make you feel good but many of us "invest" in an old car because of the great pleasure we get from driving or riding along down a road in one of those cars. Hard to put a price on happiness, and if an old car makes you happy, then I guess it is a good investment, has been for me for over 50 years.

Walt

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If you own a "Collector Car" or just have an interest in them they give you joy, the fellow hobbyists can give you even greater memories. Don't have the funds or desire to find a Stock Market Investor Forum, the ledge is crowded and I don't like heights. Bob 

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Well, I am not sure of any other hobby where I could find myself doing what I did Saturday afternoon.  Under the Model A, in my little 3rd. Garage/shed, twisted like a pretzal, a balmy 46 degrees (liars, it was more like 35), working a couple bolts loose while dust, dried up grease and a rust particle or two shower down.  Paradise!! 😁😁😁

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Around 25 years ago I changed jobs and had a small amount of Bausch & Lomb stock from an employee program, along with other accrued investments. My investment broker said "Oh, sell those and buy some old car parts to resell. You'll do a lot better than we ever could." I did and gave him most of the proceeds to put in my long term fund. Money guys, when I gave him the money he giggled and appeared to have shaking leg syndrome.

 

I can make a thousand or two on a $500 car, but the margins get tighter on more expensive cars.

 

You know about the candy store owner who worked on a 1/2 percent margin. He said he bought for 1/2 cent and sold for 1 cent. I remember that from my formative years.

Edited by 60FlatTop (see edit history)
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60 Flat Top has it right. "bought for 1/2 cent and sold for a penny"

That's what the wifie used to do when she ran her antique store.

Bought junk, and sold antiques.

Doubled her money most of the time.

She called it "key stoning".

 

Isn't that what all the old car guys try to do ?

But some how it doesn't always turn out that way.

At least I get pleasure out of driving the Buick and the Chrysler, and that's worth a fortune to me.

PLUS, we get to meet the nicest folks along the way.

 

Mike in Colorado

 

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7 hours ago, stude24 said:

With the recent downturn in the Stock Market and everyone's 401k taking a hit, what's the prognosis for the Classic Car Market?

 

Trying to do a comparison between the two markets at a time when the stock market is in it's worst state since the Great Recession isn't exactly a legitimate comparison. The causality of current events is pretty apparent, and the pandemic will pass, as they all do. We have a decent sized portfolio and I'm amazed at how well I'm taking the current situation in stride compared to 2008. I was a mess back then. 😄

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38 minutes ago, mike6024 said:

Real estate is the best long term investment. I don't have any though.

 

That depends.  Real estate in Detroit or Chicago,  maybe not.  Real estate in Beverly Hills CA or any up and coming area maybe so.  Then again you have annual taxes to pay if you keep it very long and those can add up if it's a house.  If vacant land,  then that's different. 

Bought my shop on a very busy highway with excellent exposure.  Cleaned up the property and did maintenance.  It still really needed more work,  but paid 100G for it.  almost ten years later,  sold it for 100G.  Taxes were about 3000 a year. Money was money I borrowed against my 2nd house I bought before I met my wife.  In the end cheaper than renting or leasing property,  but I technically lost money, considering 30,000 in taxes and then the interest on the loan.  Alot was able to be written off for my business over the 10 years but then again you have to make the money to write it off.   Now if i had leased it to someone and collected a lease payment I probably would have made some money, if my leaser didn't split in the middle of the night with the fixtures or worse yet not leave after not paying for a number of months while they run the place in the ground like it was when I bought it. 

Edited by auburnseeker (see edit history)
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The old car market and the stock market run parallel to each other, with some obvious differences. The strength of both is dependent on consumer confidence, but both have been oversold. Much of the financial world (economists) have been looking for a stock market correction for some time. Demand in the car market has been weak for some time, and going to get worse. Choose the right stock or the right car, and there is still stability, but gone are the days when investing in any stock or in any car will guarantee someone a positive return on their investment. 

Edited by Buffalowed Bill (see edit history)
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Daniel Lapin is the author of a book called Thou Shall Prosper. Recommended reading. In it he tells a story about a man who took his son to a hill overlooking the Rhine River. There was a loaded coal barge heading south. And a second loaded coal barge heading north. "Son, knowledge is a very valuable thing." That's my key memory from the book. I immediately connected with all those $500 cars that got good homes.

 

Today is a good day to empty a couple of tin cans from the garage and drop it into the stock market. Imagine having a nickle for every time someone said the world was ending.

 

I try to avoid quoting myself but, "life is too important to take seriously". Seriousness breeds expectations.

Bernie

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The stock market fell markedly today, by 2,013 points, or 7%.

But newsmen tend to sensationalize events:  CNN reported

that that was "the biggest drop in a single day ever."

By points, yes, but certainly not by percentage.  In 1987,

the stock market fell 500 points in one day, but that was 25%!

And after that truly record-setting 1987 drop, the stock market

was back to its previous heights in only two years.

 

Stocks probably do better overall, but cars' prices aren't nearly as volatile.

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11 hours ago, Steve_Mack_CT said:

Unless you have life changing money invested in a car or cars, dont sweat it. 

If Steve's comment applies to you see a financial advisor.  You need help, this is just a hobby.  If my cars disappeared tomorrow it would not effect my quality of life other than wishing I was deaf in the presence of my wife.  Agree with Mike, slowly adding Amazon,Boeing Microsoft and Apple and following the shale producers who are down 30-50% today.  As Rahm Emanuel so famously said,"Never let a crisis go to waste".

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My Dad always said he invested in Live Stock. Cows, Beefers, Horses, Pigs, Heifers and he did very well. He didn't know nothing about any other kind of stock. How big is that Wall on that street down in the NYSE? I done heared tell it fell and hurt plenty. Must have been one big pile of bricks what kilt em. He sold his farm for 4 million when he finally decided to retire and owned it 100% at the time of the sale. Me, I started out with nothing and still have most of it left. I blame it on Carowner virous. Dandy Dave! 

 

Edited by Dandy Dave (see edit history)
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3 hours ago, mercer09 said:

a buying opportunity.  thank you UPS!

 

???? United Parcel Service or Uninterruptible Power Supply?  Do you mean you are buying one of these?

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11 hours ago, Robert G. Smits said:

and following the shale producers who are down 30-50% today.

 

One of the dirtiest fuels in the world exported from one of the most regulated countries to be burned by "the other guys". But it is such a good stock, how many more of those deals?

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21 hours ago, mike6024 said:

Real estate is the best long term investment. I don't have any though.

 

 

One thing about dirt is that there will never be any more produced.

They don't make it anymore so it should only become more valuable.

Not particularly liquid, but usually goes up in value.

The cars are a hobby that I used to be able to profit from, Not very liquid as well.

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