Investors’ Paradise - The star of the show isn't what you think, by Jonathan Michaels
Ten years removed from the chill of the frozen economy, investment strategies are beginning to become clear. Rare watches have appreciated 65 percent; fine art has appreciated 130 percent; and precious jewels 147 percent. The Dow Jones has yielded an impressive 215 percent return. However, these returns pale in comparison to the 404 percent return the collector car market has achieved during this same time period.
If there is any question on this point, consider the Ferrari 250 GTO. In 1962, when the car first was first introduced, it had strike price of $6,000. By 2004, GTOs were trading at $10 million.
Six years later - at the height of the recession - the Italian machines were crossing the block at $26 million. If that sounds incredulous, consider that by 2014 GTOs had climbed to $38 million, and just earlier this year, a "Gran Turismo Omologata" (the full name of the GTO) sold for an eye-popping $70 million.
If the Ferrari 250 GTO sounds like an anomaly, it is not. In 2013, RM Auctions sold a Ferrari FSO for $800,000. In 2017, the auction house sold essentially the same car for $3.1 million
And if Ferraris have stolen the show, Porsches have taken the whole darn auditorium. In the last 10 years, classic Porsches have increased an astonishing 683 percent.
What is particularly significant about this is that, unlike Ferraris which have become stratospheric in their pricing, classic Porches are still relatively affordable. What is particularly interesting is the resiliency the market has had through challenging times.
Take for instance the 1958 Ferrari California, the car made famous as the Ferris Bueller car that suffered a fateful ending. In 2005, the average price was $1.5 million.
By 2015, 10 years later, the average price had climbed to $14 million, an 850 percent increase – and this is through the recession.
In fact, according to WMG Advisors, collector cars are the only asset class that that actually rose in 2008, when all other assets were in a freefall.
If the retail side of the automotive industry has seen a return of confident buyers, the classic car industry has exploded with enthusiasm. With their million-dollar price tags, classic cars attract financial moguls who tend to be smart with their dollars. For those with the industry specific knowhow, fortunes are there to be made in a New York minute in an industry that is bristling with hyperactivity.
Jonathan Michaels is the founding member of MLG Automotive Law, APLC, which specializes in representing clients in the automotive industry. https://mlgaplc.com/
The world’s most expensive car is at the center of a High Court battle between a dealer and an American collector, as a judge must decide who is entitled to the $48 million vehicle’s gearbox.
Gregor Fisken, 55, a London classic supercar trader, bought the 1962 Ferrari 250 GTO in October 2017 on the understanding that its missing original gearbox would be sourced.
However, when the seller, Bernard Carl, a Washington lawyer, failed to hand over the part, Mr Fisken sued for breach of contract.
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A very original 1969 Lamborghini Miura P400 S brought $1.6 million and was high sale at RM Sotheby’s 13th Annual London Auction on October 24.
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This No-Reserve 1967 Austin Healey 3000 almost complete project is going to a new owner in about 24 hours!