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Recession and Scottsdale
By slmarket | January 24, 2008
QUESTION: John, a question on a lot of minds this month: Can we expect collector cars to follow weak real estate and/or a bearish Wall Street?
OLSON: Not as much as you might think. While anyone in financial straights may be forced to dispense (temporarily) with their hobby it is also true that:
OLSON: Not as much as you might think. While anyone in financial straights may be forced to dispense (temporarily) with their hobby it is also true that:
Cars are far from impersonal investments:
- a low percentage are financed, and none are hedged as stocks and/or currency
- cars are portable, helping international appeal, unlike land in Peoria or Essen
- selection is based 1st on pleasure, pride & identity, 2nd (or 4th) on money
- selling is given the same priorities
Sales at Scottsdale's huge January collector car auctions are a perfect example. Hammer prices were very strong, many new records, as if to say 'If there's a recession, we've decided not to participate." The Barrett-Jackson Auction Company reported a 13% increase in advance reservations from foreign bidders and a 25% increase in bidder credit-limits over 2007. Was it a "retreat to tangibles? To portable assets? Were we seeing some of those billions pulled out of the world's stock markets since December?
Mercedes-Benz especially, is so well known internationally – it is like owning three or four currencies at the same time. If the dollar's value is down a well known collectible Mercedes is pulled up at the same time in another currency! [more on this subject in February's SL Market Letter].
Topics: Mercedes-Benz Auctions, SL Market News | No Comments »
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