Are art / collectibles / classic cars really a great store of value?

[scb]

I’ve had this discussion with a guy in Work. He wants to buy some high end art, he thinks it’s the way to make money. I want to own a couple of nice cars. He doesn’t like art and I like cars. So even if my “investment” tanks I’ll still own some cars I can enjoy but if his art fails what does he have? Some paintings he doesn’t like or enjoy.

Sadly classic cars are in a bubble, even scrappers are going for stupid prices compared to a 5-10 years ago. I like the idea above of buying a Rolls Royce and I want an Aston Martin. I think there will always been a market for higher end. The ‘86 Golf GTI I have outside will always be fun but I don’t expect it to make me any money.

Basically buy what you like, what you can enjoy. I just don’t get why anyone would buy something 30-40 years old in “showroom condition” or “mint in box”, you can’t enjoy that and you’ve bought it just as an investment. That’s going to fail, investment for investments sake.

[Habeas Domus]

4 hours ago, 2rocketman said:

Rolex watches seem to only go up in value. Stainless steel Daytona models are very desirable. Can pick up good ones for around 10k. No upkeep, easy to store, prove authenticity and come with a certificate.

Old watches and particularly Rolexes have risen hugely in the last few years, which I think is down to the boomer generation reaching retirement age.

Rolex helped to feed this by raising the price of new watches every year, all the used prices then rose in sync.

Younger people hardly ever wear a watch at all so I don't see the trend continuing for too much longer. At some point the demand is  going to fall off a cliff.

[dgul]

2 minutes ago, scb said:

I’ve had this discussion with a guy in Work. He wants to buy some high end art, he thinks it’s the way to make money. I want to own a couple of nice cars. He doesn’t like art and I like cars. So even if my “investment” tanks I’ll still own some cars I can enjoy but if his art fails what does he have? Some paintings he doesn’t like or enjoy.

Sadly classic cars are in a bubble, even scrappers are going for stupid prices compared to a 5-10 years ago. I like the idea above of buying a Rolls Royce and I want an Aston Martin. I think there will always been a market for higher end. The ‘86 Golf GTI I have outside will always be fun but I don’t expect it to make me any money.

Basically buy what you like, what you can enjoy. I just don’t get why anyone would buy something 30-40 years old in “showroom condition” or “mint in box”, you can’t enjoy that and you’ve bought it just as an investment. That’s going to fail, investment for investments sake.

funny thing is, there are always rather nice cars available for very little money.  You've just got to look -- probably starting with about 10 years old.

And, also funny, they often become the things that have value after another 10 years.  See, they've got to get from the 'lots and crap' stage, to the 'few about, and it was my dream car when I was 20 stage' -- and all that takes is time.

The problem is people have a dream of exactly what they want, perhaps thinking they'd be cheap (because they were 10 years before), when they've already gone into the 'few and desirable' stage.

[jiltedjen]

2 hours ago, nothernsoul said:

Collectables are very risky. Excluding blue chip high art, what one generation considers special means nothing to another. Railway memorabilia had a boom a few years ago, a friend of mine bought a station sign for 5 grand at auction. Sadly when those middle aged men die, all that stuff will flood the market, it will mean nothing to younger people with no romantic memories of the age of steam. Conversley people now pay a premium for original victorian fireplaces and other features when after the war it was ripped out and tossed into skips. 

This is the best quote, boomers have more money than they know what to do with, hence some crazy values for things they once knew.

this new generation will grow old and put value in other things, mint condition sega megadrives, nokkia 3310’s, ‘vintage’ computer equipment, especially games consoles. 

if you want to make money now load up on the above. 

I like classic cars myself they will always have value but probably not boomer level value. 

stuff like old escorts go for massive money, eventually scrap value as the oldies die off. 

watches I don’t see as holding value, just not relevant anymore. Same with stamps (market already struggling)

digital assets of course will go up. it’s a new generation. probably the new gold. 

rare game items on games which keep evolving but keeping original items and skins in. That will be a biggy. 

the days of ‘stuff’ is more or less over. the excess of the boomers will die with them. The young have 50 items worth of functionality in their phones. 

 

[jiltedjen]

38 minutes ago, sideysid said:

The ‘restoration’ project I have is my 1962 Rolls Royce (yes I must be the poorest man alive to own both a Rolex and a Rolls Royce) it is a store of value. It’s over-engineering is astonishing even today (double skinned floor pan, air con and electric windows that work 60 years later).

Then you have the likes of Escort XR3is that are popping up for 10-20k, RS Sierra Cosworths going towards 6 figures. Not quality made cars, but based on nostalgia. The majority were rinsed to within an inch of their life, the only examples left are why they are priced as they are.

I remember my brother-in-law taking me out in his RS Cosworth when I was 10 and those memories of sliding out the rear was great stuff!

Well made cars interesting beyond just nostalgia will always have value. interesting or good engineering, even badges. 

Old escorts, old golfs will all plummet in value. silly place to put money to ‘invest’

I think crypto mining rigs in glass cases will be a novelty and a sign of wealth in years to come. when you could make whole satoshis just by running your computer, instead of grafting and saving up all year. 

[Maynardgravy]

Vintage musical instruments. 

You have to know your field - mine's brass instruments. Find slightly dinged old pro trumpets/trombones for a song on eBay and find a reliable instrument repairer. Reckon I have around 40k worth from an outlay of 8k. Not that my collection will ever get sold.

Therein lies the problem - my precious!

[reddog]

26 minutes ago, dgul said:

funny thing is, there are always rather nice cars available for very little money.  You've just got to look -- probably starting with about 10 years old.

And, also funny, they often become the things that have value after another 10 years.  See, they've got to get from the 'lots and crap' stage, to the 'few about, and it was my dream car when I was 20 stage' -- and all that takes is time.

The problem is people have a dream of exactly what they want, perhaps thinking they'd be cheap (because they were 10 years before), when they've already gone into the 'few and desirable' stage.

Probably a good idea to buy a 10 year old 'future classic' when it is cheap and still usable as a daily driver.  For example I really should have listened to my heart and bought an 80s BMW e28 M5 when I saw one for about £6k in  2001 ish, there is one here for £38k 

https://www.pistonheads.com/classifieds/used-cars/bmw/m5-pre-89/bmw-5-series-m5---e28/8084956

As I remember it, I didn't think it was a good idea, as I was saving for a house grr!!

Edited December 18, 2017 by reddog

[Diver Dan]

46 minutes ago, sideysid said:

Then you have the likes of Escort XR3is that are popping up for 10-20k, RS Sierra Cosworths going towards 6 figures. Not quality made cars, but based on nostalgia. The majority were rinsed to within an inch of their life, the only examples left are why they are priced as they are.

I remember my brother-in-law taking me out in his RS Cosworth when I was 10 and those memories of sliding out the rear was great stuff!

There was a recent case of a man in Northeast Scotland who had 3 mint condition Sierra Cosworths stolen. I found the whole thing quite puzzling because I couldn't work out who would actually do it.

Joyriders would likely get more 'joy' from stealing a more modern car like an M3 or an Imprezza Turbo which are far more common and crucially much much faster.

Thieves stealing to order or to sell on will run into all sorts of trouble because every Ford owners' club in the world will be on the lookout and besides these cars aren't worth anything without the paperwork showing their provenance.

Even breaking them up for parts probably won't get them much money because the Cossie is basically just an average family car with performance upgrades and not intrinsically as valuable as a true exotic like a Ferrari or Aston.

My only conclusion was that it was probably insurance fraud.

[Diver Dan]

I reckon that any 1980s or earlier motorcycle that hasn't been the subject of a cafe-racer or bobber style conversion should hold onto its value quite well in the medium to long term.

Edited December 18, 2017 by Diver Dan

[Dogtanian]

It's very cyclical, fashions change so yes maybe Rolex is bubbling now with the boomers but in 30 years?  I guy I know that has some background in art antique dealing told me as such.  He's also acquired a Rolex.  And yes he's a boomer'.

On the other hand art/ classic cars/ whisky seems to have been a great investment and been on a long upward trajectory.  Not sure really if what art though being slightly simple in such matters?  The classic Dutch masters have always held their value and grown? Although that's pretty high end so even period prints or whatnot can cost 6 figures.  And modern pop art like Warhol has been good.  So not so sure about the middle market i.e. niche Welsh or Scottish painters?

A bit OT but with regards to japanese whisky even the humdrum stuff seems to have gone sky high.  I was gifted a bottle probably 5 years or so ago and I think then it was circa £30... Now I was reading it's up to 70 or £80. Supply and demand no doubt, and probably those pesky Eastern peoples having money to spend.

[reddog]

35 minutes ago, Diver Dan said:

There was a recent case of a man in Northeast Scotland who had 3 mint condition Sierra Cosworths stolen. I found the whole thing quite puzzling because I couldn't work out who would actually do it.

My only conclusion was that it was probably insurance fraud.

Interesting point, I think most stollen cars end up in Africa or Asia.  I'm pretty sure people buying these cars would much rather have a brand new RR or BMW, instead of an 80s Cosworth.  It's only people on Western Europe of a certain age that have affinity for the Ford Sierra Cosworth.  It's at the time legendary performance can now be achieved by a "warmish" hatch.

Edited December 19, 2017 by reddog

[dgul]

25 minutes ago, Diver Dan said:

I reckon that any 1980s or earlier motorcycle that hasn't been the subject of a cafe-racer or bobber style conversion should hold onto its value quite well in the medium to long term.

I think that's probably right.  And they have the advantage of taking up less space and being easier to move if you need to (eg, use a tail-lift).

I've got a 1st gen GSXR (might be about '86?), which is probably worth next to nothing but I can dream... (I've only kept it because when I tried to sell it in 2000 no-one would buy it, so it migrated to the back of the garage). 

[Sugarlips]

Can’t contribute regards guns art or watches but I’ve had a lot of lower end older cars and some mid range ones.

For those considering a classic car this sounds obvious but it’s so easy to let the heart overrule the head and end up with a nightmare so first you really need to determine what you want and why and importantly it’s purpose..

Will it be in use year round? parked outside? is the area safe to leave it? If yes to any of those stay well away from anything that rusts (and that rules out a lot of 70s & 80s cars) or is gonna get pinched or keyed (no XR3’s then).

There are some quite interesting bullet proof cars that you can enjoy daily and will not let you down rust wise if you buy well but they will invariably still need money spent on them, how will you feel when your local mechanic charges you 2 grand to have the engine overhauled on your old Landy or 190e or 320i let alone the 4K to identify and fix (for 5 minutes) all the electrical gremlins on your aluminium bodied Lancia Feema?

The plus side is obviously the enjoyment factor. If you’ve always wanted to pelt round country lanes in an MG B GT on sunny Sunday’s and can keep in safe and dry, you’re buying it for the right reason and the so-so outlay to own and keep one should be almost irrelevant. You are still probably better off finding a very well cared for rubber bumper model than pay the same or more money for an average early car - those bumpers have been putting purists off for 20 years but times change there is upside value in finding a good un that’s not quite in fashion.

if you’re feeling brave maybe take a chance on something that’s been largely forgotten, there are some nice late model fibreglass bodied Scimitar Coupes for a couple of grand that I reckon are undervalued atm

I just enjoyed a year in a series 3 XJ6 but can’t pretend it was anything other than a gamble, I was nervous of stuff breaking every time I took it out but got lucky cos I sold it for double to a boomer who has been reading the latest Octane mag, still he’s got deep pockets and was v happy with the deal even if I did feel a bit Arfur Daley when we shook on it

in short though, unless you’re Noel Gallagher forget the RR’s and Aston’s, you will love them and they will break your heart and bank account, guaranteed. 

[winkie]

Books.......certain specialist books.........real books will never go out of fashion.

[Craig_]

8 hours ago, Dogtanian said:

A bit OT but with regards to japanese whisky even the humdrum stuff seems to have gone sky high.  I was gifted a bottle probably 5 years or so ago and I think then it was circa £30... Now I was reading it's up to 70 or £80. Supply and demand no doubt, and probably those pesky Eastern peoples having money to spend.

Correct. All started a couple of years back when Jim Murray named Yamazaki Sherry Finish as his whisky of the year. Now I'm not saying that it isn't a good whisky, but obviously Mr Murray needs to sell books and needs publicity to attract buyers. But I digress.

The upshot of all this was that the Japanese industry wasn't geared up for a massive boom in sales, so instead started making non-age whiskies and cranking the price of the aged variants sky high. The irony here is that a lot of "Japanese" whisky is actually made in Scotland...

[stuckmojo]

Great thread. 

My 2p:

- Cars are in a massive bubble, which is exaggerated by the fact there's no capital gains tax on that asset class. Most mental are Ford blue collar heroes. Early BMW M3 are way beyond what makes sense. The whole market is nuts as the typical boomer punter is not getting any from his BTL empire and ISAs give you ****** all. I am a massive petrolhead, so I bought an early Porsche 996 in 2011 and used it as daily for years before putting it in storage when I moved to the Far East. I still have it and it's probably worth double what I paid for it (but it's immaterial as I'll never sell it). Stupidly, at the time I sold my Z3M for about £5k and now I would have trebled my money. But hey ho. 

- Guitars. Rosewood bona fide Gibsons are great collectibles. What I love about guitars is that using them can only affect their value positively. Hence I'm buying and enjoying them. Trouble is, I won't want to sell them. Spot a pattern there? 

- Wine. Great. But since I LOVE red wine, I should only buy large quantities as I would end up drinking it. Or buy wine I don't like. I see value in it through scarcity. Though I wouldn't buy the most expensive as it's probably overpriced to begin with, but something like Vega Sicilia Unico could do well.

- Furniture. I see the value and the utility but I'm not sure I like the idea of having a house full of brown old wooden stuff. A few items (a desk), yes. 

- Coins/Medals - yes, definitely. Though I don't know anything about them. Easy to store/hide/value. I need to read up on these.

- Watches - mostly the same as coins, but I am not too clued up on these either, so I'd only buy Rolex and avoid crass shite like Hublot etc.  

 

[winkie]

No longer the gold watch, now the good stainless steel......I would go for musical instruments, hand made.....in fact anything of quality that has been made by a master craftsman or woman.....skills in high demand. 

[VeryMeanReversion]

16 hours ago, reddog said:

-had my eye on a "show room condition" 1990s Mazda Rx7, great condition and high price, but was on sale for well over a year

I've got one of the last Rx7's, an unmodified series 8 RS.  So much lighter than modern cars and with 300bhp,  it can certainly shift. Its held its value over the last 11 years, even though I've been using it ~3K miles a year.  

Pic here with its little brother (240bhp rotary mx5)

 

[dgul]

13 minutes ago, winkie said:

No longer the gold watch, now the good stainless steel......I would go for musical instruments, hand made.....in fact anything of quality that has been made by a master craftsman or woman.....skills in high demand. 

Possibly.  

I think the relevant point is that sort of thing never gets cheap; they're a good store of value.

I know that that's the thread title, but you're less likely to find a bargain that way.

There is also value in stuff that goes through a 'zero value' point before appreciating again.  I find those things very much of interest.

[rxe]

Don’t laugh.  Chainsaws.  

When I used to live in London, I needed something mechanical to fiddle with,  and as a bit of a wood junkie, I started fixing old chainsaws. None of the modern small stuff - it was all 30 year old Stihl 070s, 090s, 075/6s etc.   You’d get a “fixer upper” for £60 on eBay, my limit was £100.  If you were lucky it simply needed a new carb diaphragm, and a throrough strip down and rebuild.   If you were unlucky, the piston had melted and you needed a new one for £100 or so.

10 years later, a busted 070 on eBay goes for about £300, and 090s tend to go for about £600.   Nicely sorted out ones (not bad resprays and a load of Chinese parts) can be double that.  I’ve got a container half full of the things!

[RentingForever]

My brother bought a lot of art of the type you find in high street galleries - some originals, some limited-edition prints. When he died we managed to sell the originals via auction for about half the price he paid, but nobody would touch the prints.

Truth is most art doesn't gain value except for a minority of artists, and even then only when they've been dead for a good few years. You should only buy art because you like it.

Most of his stuff ended up shared out among the family and is hanging on our walls; the ones nobody likes are stored away in cupboards.

[Locke]

12 hours ago, ftb_fml said:

It seems to me that there are asset bubbles everywhere. If it can be considered an asset, it's seen massive growth in the past 10yrs.. this looks unsustainable and I'd expect a correction when the sh*t hits the fan in the wider economy. I've read that the classic car bubble has been hissing for 12-18 months now.

Like any other bubble it's great if you were on board near the beginning and know when it sell, otherwise not so much. Then again what do I know - I called the top of the bitcoin bubble at $3k.

"The market can stay irrational..." etc.

Perhaps it is fiat currencies which are in a bubble and bread is vastly underpriced?

[Greg Bowman]

2 hours ago, stuckmojo said:

Great thread. 

My 2p:

- Cars are in a massive bubble, which is exaggerated by the fact there's no capital gains tax on that asset class. Most mental are Ford blue collar heroes. Early BMW M3 are way beyond what makes sense. The whole market is nuts as the typical boomer punter is not getting any from his BTL empire and ISAs give you ****** all. I am a massive petrolhead, so I bought an early Porsche 996 in 2011 and used it as daily for years before putting it in storage when I moved to the Far East. I still have it and it's probably worth double what I paid for it (but it's immaterial as I'll never sell it). Stupidly, at the time I sold my Z3M for about £5k and now I would have trebled my money. But hey ho. 

-

 

I am with you, if you are into cars it can be part of your portfolio. My observation is high risk like Bitcoin, currency trading and now BTL so perhaps best to look at like that. For us Petrol heads can be fun. The problem and hey ho this comes down to land prices is storing them which adds to the cost and is often ignored. I am looking at Audi A2's at the moment as  a fun little punt.

[dougless]

4 minutes ago, Greg Bowman said:

I am with you, if you are into cars it can be part of your portfolio. My observation is high risk like Bitcoin, currency trading and now BTL so perhaps best to look at like that. For us Petrol heads can be fun. The problem and hey ho this comes down to land prices is storing them which adds to the cost and is often ignored. I am looking at Audi A2's at the moment as  a fun little punt.

The A2 is a clever car.  I drove one once, just after they came out and it was very impressive.  They are light and fuel efficient as well as being a bit of a technical tour de force.  The Diesel is nice but there are issues with that 3 cylinder engine as they get older.  I think I would look at the 1.6 petrol if I was on the hunt for one.

Back on topic, I think the classic car market is in the final phase of a ridiculous bubble although, as others have pointed out, it has a few punctures and they are struggling to keep it inflated.  I hope it crashes badly very soon because it will help to shake confidence in other investments.

[Greg Bowman]

6 minutes ago, dougless said:

The A2 is a clever car.  I drove one once, just after they came out and it was very impressive.  They are light and fuel efficient as well as being a bit of a technical tour de force.  The Diesel is nice but there are issues with that 3 cylinder engine as they get older.  I think I would look at the 1.6 petrol if I was on the hunt for one.

Back on topic, I think the classic car market is in the final phase of a ridiculous bubble although, as others have pointed out, it has a few punctures and they are struggling to keep it inflated.  I hope it crashes badly very soon because it will help to shake confidence in other investments.

Apparently the latest 1.6i FSI engine is the one to have backing up your thoughts. Agree re bubble. Sort of like small time property developers suddenly realising that materials and labour really aren't what they were twenty years ago. The cost of restoring a car of any age and then storing it has risen steeply in the last five years and unless it's fun as a petrolhead can't see it being a long term winning strategy