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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Pogeu Mahone who wrote (100230)	2/12/2004 11:08:30 PM
From: Bilow	Respond to of 132070

Hi zeus628; Re: "my friend teaches auto shop to a regional tech school,he has been doing this since 1975. Has quite the collection. He is a perfectionist!" Sounds like he's more of a collector than an investor. I can't imagine doing an investment type activity for 30 years and not being sufficiently good at it that it doesn't make better money than teaching. But I can certainly agree that it's more than possible to lose money on high end cars. Of course one of the rules of trading of all sorts is to not hang on to stuff that goes down in value (LOL). That rule does not apply to collectors. Re: "their value has fallen 60%!" I'm going to guess that your friend must concentrate in the extreme high end, which is compatible with him being a "perfectionist", with "quite the collection". Yes, prices in that region have dropped drastically. But I wouldn't suggest those cars for investment, they're baubles to be collected by extremely rich people only. The problem with investing in really expensive cars is that their prices are subject to such extreme fluctuations, and their owners are generally so careful when selling them, that it is impossible to buy them at enough of a discount so as to guarantee a profit on the trade if exited immediately. Like I said in my post, in markets that have very wide spreads a trader should always buy below market, so that he has an opportunity to immediately sell at a (small) profit. Only a stock trader knows how this is done with stocks, but anyone with a good eye for value in a given type of real merchandise can do it in the real world. The difference with real merchandise is that the buy / sell cycle takes a lot longer (which reduces profits), but the spreads are much larger (which increases profits). For middle end cars, I can look at the prices on eBay and there has been no 60% drop recently. What I'm getting at here is that I expect, maybe 5 years from now, to hear people at the ball game talking about how much their real estate (and other real things) have gone up in value instead of how their stock portfolios are zooming up. -- Carl