Chasing Classic Cars

The proliferation of reality shows on any particular topic seems to be a pretty good metric of public sentiment. House flipping and gold mining have been popular, but now the wave of new shows is car flipping – restoring – or not – and selling, just like house flipping in its heyday. “Classic” cars are now an asset class.

The definition of “classic” car keeps expanding, as do prices, showing gains as good or better than the stock market bubble. The annual January auctions around Scottsdale grossed $100 million; not exactly the NYSE, but still. It looks to me as if folks with a little cash have left the stock market and gravitated to an investment speculation that they think they understand better, and certainly are more comfortable with. Of course, you can trade online. Most of these cars live in climate-controlled storage so basically they trade as warehouse receipts. And yes, there are funds that offer diversification although no ETFs yet, at least as far as I know, liquidity being a bit of a problem.

Ah yes, liquidity. Unfortunately, this is a bubble market where liquidity can and will dry up on a moments notice. The message from the TV shows is that everyone who wants in, is in and product is being rushed to market. Good luck with that, as they say.

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