It Ain't Just Houses.....

[vlad the impaler]

I like to lurk on vintage watch collecting forums. I have noticed over the last 2 years that collectable Rolex prices have shot up to insane levels.

These guys here seem to be in agreement with this assessment. One example is a model I saw myself 18 months ago in an Old Bond St watch shop in London for £15k. A month ago, I saw two examples of the same model in different shops in the same street at £25k! In the 1980s, the Navy used to sell boxes of old 'military' Rolexs at auction for £100 each. They are now closer to £100k ea, thanks to them becoming painfully trendy in the last few years, pushing old school collectors out of the market completely. (I should point out that I can't afford anything out of these examples, at the old or the new prices, I just like looking at old stuff).

It is not just house prices that are trapped in a very large bubble. This 'fast buck', 'flipper' mentality has infected a great many areas of commerce. Last time it was classic cars, this time classic watches, houses, newly released games consoles, Glastonbury tickets, Blue Peter badges, 'fine' wines, even 'vintage' computer CPUs! I saw one old Intel set of computer CPUs sold on Ebay for £8k!!! Everyone is an expert now. They all jump on the bandwagon, and push the prices through the roof within months in any area just as soon as they see it on TV, or hear about it from some Coke-addled gimp in some wine bar somewhere. I blame the rise of the internet, and the rise of the 'You can make a living at [insert name of latest trend] by simply riding the market rise! You can't lose!!' type shows on TV every hour of the day.

The trouble is that not everyone is an expert, even though they may think they are. I reckon people just need a dose of recession reality every so often to take the wind out of their sails. That, and the regulation of these idiot TV shows by the FSA perhaps. Maybe each one should have a disclaimer at the start and the finish warning viewers that prices can go down as well as up, and that they should also remember to declare any profits to the Revenue. Perhaps a rolling bar saying 'advertainment' should scroll across the screen during each programme! Well, one can dream.....

[Garry AKA Pod]

I like to lurk on vintage watch collecting forums. I have noticed over the last 2 years that collectable Rolex prices have shot up to insane levels.

These guys here seem to be in agreement with this assessment. One example is a model I saw myself 18 months ago in an Old Bond St watch shop in London for £15k. A month ago, I saw two examples of the same model in different shops in the same street at £25k! In the 1980s, the Navy used to sell boxes of old 'military' Rolexs at auction for £100 each. They are now closer to £100k ea, thanks to them becoming painfully trendy in the last few years, pushing old school collectors out of the market completely. (I should point out that I can't afford anything out of these examples, at the old or the new prices, I just like looking at old stuff).

It is not just house prices that are trapped in a very large bubble. This 'fast buck', 'flipper' mentality has infected a great many areas of commerce. Last time it was classic cars, this time classic watches, houses, newly released games consoles, Glastonbury tickets, Blue Peter badges, 'fine' wines, even 'vintage' computer CPUs! I saw one old Intel set of computer CPUs sold on Ebay for £8k!!! Everyone is an expert now. They all jump on the bandwagon, and push the prices through the roof within months in any area just as soon as they see it on TV, or hear about it from some Coke-addled gimp in some wine bar somewhere. I blame the rise of the internet, and the rise of the 'You can make a living at [insert name of latest trend] by simply riding the market rise! You can't lose!!' type shows on TV every hour of the day.

The trouble is that not everyone is an expert, even though they may think they are. I reckon people just need a dose of recession reality every so often to take the wind out of their sails. That, and the regulation of these idiot TV shows by the FSA perhaps. Maybe each one should have a disclaimer at the start and the finish warning viewers that prices can go down as well as up, and that they should also remember to declare any profits to the Revenue. Perhaps a rolling bar saying 'advertainment' should scroll across the screen during each programme! Well, one can dream.....

I have all but given up on ever trying to go to a large gig ever again because every man and his dog has become a ticket tout / flipper.

£100k for a watch? I swear by my 6 year old Pulsar that I bought for myself on my 21st, for £40

[vlad the impaler]

I have all but given up on ever trying to go to a large gig ever again because every man and his dog has become a ticket tout / flipper.

£100k for a watch? I swear by my 6 year old Pulsar that I bought for myself on my 21st, for £40

That is the point. People pay it, and all because this watch has a slightly different set of hands and a different symbol on the face to the standard type that goes for £5k! The power of showing of and one-upmanship in action methinks!

[Jason]

Welcome vlad the impaler

As the saying goes "everyone's an expert in a bull market, it's during a bear market the real experts emerge" (or something like that).

newly released games consoles

Yep, I know a PS3 flipper. Failed obviously, well, I did say.

'vintage' computer CPUs!

Anyone want to buy my zx80 ?

[vlad the impaler]

Welcome vlad the impaler

As the saying goes "everyone's an expert in a bull market, it's during a bear market the real experts emerge" (or something like that).

Yep, I know a PS3 flipper. Failed obviously, well, I did say.

Anyone want to buy my zx80 ?

Funnily enough, ZX80s are worth quite a lot, about £200 in used condition, more if boxed or in very good unboxed condition. Chuck it on Ebay old chap!

[@contradevian]

Welcome vlad the impaler

As the saying goes "everyone's an expert in a bull market, it's during a bear market the real experts emerge" (or something like that).

Yep, I know a PS3 flipper. Failed obviously, well, I did say.

Anyone want to buy my zx80 ?

At last I'm on a bandwagon! I have biggest pile of computer crap going. I have an Amstrad CPC464 somewhere. I don't know why you'd want to buy one, as it easier to emulate on Windows or Linux.

[vlad the impaler]

At last I'm on a bandwagon! I have biggest pile of computer crap going. I have an Amstrad CPC464 somewhere. I don't know why you'd want to buy one, as it easier to emulate on Windows or Linux.

Laods and loads of people buy them cheaply at car boot sales and the like, and sell them on Ebay (or at leat try to).

[Garry AKA Pod]

At last I'm on a bandwagon! I have biggest pile of computer crap going. I have an Amstrad CPC464 somewhere. I don't know why you'd want to buy one, as it easier to emulate on Windows or Linux.

Does it have the lovely green screen monitor?

[@contradevian]

Does it have the lovely green screen monitor?

No the monitor got chucked a long time ago. Anyway you can plug one into a TV set.

http://en.wikipedia.org/wiki/Amstrad_CPC

Grab an emulator here and experience 1980's computing!

Edited August 29, 2007 by rover2000

[right_freds_dead]

I like to lurk on vintage watch collecting forums.

mmmmm.......???

anyway. im in agreement. there have been also booms in narrowboats and camper vans in the lst 2-3 years.

not too long ago a rancid ford transit camper van with 70k miles swent for about 1200-1500. M reg type thing. (smelly but better than a tent bitch)

now that same camper on ebay is going for 3-4k ???

lot of lost money about driving things up. this means inflation and wage pressure on an already overpriced currency.

not too good.

[Si1]

I have read somewhere that in the late 80s boom rare supercars saw sharp price increases before crashing with the economy as a whole quite abruptly. Sounds similar.

[MrPin]

It's very interesting when "collectables", such as these are priced out of the range of "collectors".

And yes I DO remember when "old cars" were bought as "investments", back in the 80's.

Hopefully these are now back in the hands of the enthusiasts!

Funny what people will pay for an old watch sometimes...

[Mr Yogi]

Great post, Vlad!

You're quite right, it's not just houses. I'm a cabinet maker by trade, and over the last couple of years have been getting into hand-made bespoke kitchens.

In that time, I have seen the prices charged by the top-name companies who advertise in the glossy high end magazines rise from an average of around £60k to over £100k - for the same kitchen!

It is all a symptom of there being more money around in certain levels of society than people know what to do with. It is of course, completely unsustainable.

I must stress that I am a long way down the food chain from these top-name companies. I charge a 'mere' £15-£20k for a kitchen - and I'm doing quite nicely thank you.

[Mr Yogi]

Mr Yogi,

Would you be adverse to a little advice or kitchen & bathroom fittings ?

I.e What are good solid makes without paying through the nose, or indeed where is best to get them?

Would it be better for the trader to do it or you to supply and them to fit it?

I presume the trader could get it cheaper but then charge retail prices to you so he makes more profit. What are your thoughts please?

Oh dear!

Can of worms opening time!

If you're after a fancy bespoke hand-made kitchen, find someone like me in your local Yellow Pages under 'Cabinet Makers' or 'Kitchen Furniture Manufacturers'. They should be able to make exactly what you want at a fraction of the price of a big company with directors and salesmen on 6-figure salaries and glossy brochures, advertising, and showrooms to pay for.

If however, you're looking for a good quality standard kitchen then avoid high street kitchen shops. Instead find a few 'Kitchen Fitters' in Yellow Pages and talk to them.

They will normally get their kitchens from Wickes, Howdens Joinery, or Magnets. They make their money on the fitting and the trade discount they get from these suppliers. Reckon on around £5k-8k for an average kitchen fitted. A shop will charge at least double that.

Source all appliances yourself online and get the fitter to fit them. You will get just as good a price as he will. The same goes for granite worktops. Laminate or hardwood worktops the fitter will be able to source cheaper than you can.

I really shouldn't be telling you all this!

[strbear]

Ah Thanks Mr Yogi - Bulltrader - where should I go to get some cheap bulls - do I buy direct from the farmer or go an auction?

Anyway that wasn't my point - I too look at watches (newer rather than old) and the 2nd hand market in Rolex's, Omega's, IWC's etc is definitely coming undone - as are the prices for nice 2nd hand cars (911s, 7 series etc etc) and Harleys - I think it is people realising they can't afford the repayments and looking for a firesales - only my view though

SB

PS - How do you tell a good bull from a bad bull?

[Wad]

Funnily enough, ZX80s are worth quite a lot, about £200 in used condition, more if boxed or in very good unboxed condition. Chuck it on Ebay old chap!

OMG! I am at my parents house and they have my old ZX Spectrum in the back bedroom under a pile of junk. I could go in there and find it right now and sell it for £1000 now - its in perfect condition, boxed, even the old plastic bag packaging is there.

[Leonard Hatred]

I blame the rise of the internet, and the rise of the 'You can make a living at [insert name of latest trend] by simply riding the market rise!

It's non-unique stuff as well. I know half a dozen people who want to set up businesses on eBay. I'm always telling them "It's like any other business. If you can't sell unique products, or sell mass market items cheaper than anybody else, forget it."

[Grizzly Adams]

I have read somewhere that in the late 80s boom rare supercars saw sharp price increases before crashing with the economy as a whole quite abruptly. Sounds similar.

All perceived exclusive items go through the roof. Art is currently going through the roof so "was" champagne, Flashbacks to the late 1980s with E-types going for silly money. Its happening all over again akin to the 'food/gold sprinkling" madness in Japan.

[IOW-here-I-come!]

mmmmm.......???

anyway. im in agreement. there have been also booms in narrowboats and camper vans in the lst 2-3 years.

not too long ago a rancid ford transit camper van with 70k miles swent for about 1200-1500. M reg type thing. (smelly but better than a tent bitch)

now that same camper on ebay is going for 3-4k ???

lot of lost money about driving things up. this means inflation and wage pressure on an already overpriced currency.

not too good.

I have noted exactly the same thing in the last four or five years with camper vans, specifically the "trendy" split screen or bay VW's. Perfect examples a few years back would have gone for £5-8K with salvagable wrecks going around £1-1.5K. However, looking around bugjam recently and examples up £15-20K range! They are also too expensive for the very people that would use them how they were intended. Went to look at a couple of empty shells and they were still £6-7K, almost as it the seller wanted to factor in the potential of the van into the cost! Sound like anything else we know?

(edited because I cannot spell!)

Edited August 30, 2007 by IOW-here-I-come!

[munro]

I have read somewhere that in the late 80s boom rare supercars saw sharp price increases before crashing with the economy as a whole quite abruptly. Sounds similar.

Yes, they did. I worked around the fringes of this market and know lots of people who were/are involved.

Two reasons:

1. No CGT on cars. And we knew that it wouldn't happen; apparently the govt looked into it and realised that the tax relief on everyday cars would more than outweigh the tax income from a few high-priced sales.

2. No proof of ownership. The logbook (V5) says "registered keeper", not owner. Net result, some people took out multiple loans "secured" against cars and when the crash came some of the best car collections belonged to banks (credit deregulation in the 1980s enabled banks to lend against security other than real estate). Storage companies did good business for a while in the early 90s and banks stopped accepting cars as security.

So prices went mad, going up and up and up...because you couldn't lose. I know one dealer who said he couldn't advise what to buy, as everything went up. Then reality set in (£100k for an E-type Jag, and so on). Market hit a brick wall. I heard one auctioneer say, problem is that near the end there were no end-users; everyone was buying to flip. Then the music stopepd and they were left holding the parcel. A lot of people went bust and a lot more lost megabucks. I know of a Ferrari bought for £750k ca 1989, sold for £105k ca 1991 (belonged to a company and there was some strange financial engineering involved; nevertheless someone lost a lot of money on that one).

Moral of the story is, when a highly illiquid market stops, it hits a brick wall. The phone stops ringing and that's it. Dealers I know say you make money in the good times and bank it, in preparation for the "long sleep" - the period that comes along every few years when the market stops, the phone goes dead, and nothing happens. In the early 90s it lasted several years.

This is something I don't think many people who work outside illiquid markets understand. When they stop, they stop. It no longer matters what the price is if no-one is buying. Nothing sells. With the housing market as it is now, heavily dependent on speculation - whether it be flipping, developing or BTLing - which is, even if done for income rather than capital gain, a speculative punt on other peoples' (tenants) incomes and their financial prospects - it is quite possible it will hit a brick wall and the phone stop ringing in EAs all over the land.

Friend of mine who deals in very expensive vintage cars tells me his phone stopped rining in June.

[Guest muttley]

I had my business (retail pharmacy) valued 3 or 4 years ago and was told that prices were high and I could get 90% of the turnover. I had it valued last year and was told I could get 120% of the turnover. I sold it in May at 140% of the turnover. Ten years ago the typical pharmacy sold for 75% of the turnover. I didn't want to sell particularly, but I can see the goodwill values plummeting in the next couple of years.

[Objective Developer]

I have read somewhere that in the late 80s boom rare supercars saw sharp price increases before crashing with the economy as a whole quite abruptly. Sounds similar.

If I had the time, was being paid, and had the skills, I love to do a comparison of the 80’s supercar boom in relation to the wider economy. My theory is that you can measure economic cycles through supercar companies, and according to this fledgling theory, we must be near the peak. Off the top of my head, here is a list of supercar companies that have been resurrected or newly formed, or who have launched outrageous new models, in the last 5 years:

Bugatti

Farbrour

Koenigsegg

Caparo

Ascari

MB EOS

Lotec

Gumpert

Saleen

Nobel

Marcos

Spyker

Pagani

The list goes on, but you get the picture. Basically, lots of people have entered the hypercar market, and the last time we saw something like this was at the end of the 1980’s….

[@contradevian]

I had my business (retail pharmacy) valued 3 or 4 years ago and was told that prices were high and I could get 90% of the turnover. I had it valued last year and was told I could get 120% of the turnover. I sold it in May at 140% of the turnover. Ten years ago the typical pharmacy sold for 75% of the turnover. I didn't want to sell particularly, but I can see the goodwill values plummeting in the next couple of years.

Yes I've been told that for web hosting businesses. A few years ago you could get around 80%

of turnover (regardless of profitability). Now I'm told you can get 100%.

However some larger outfits I've know have sold for 200% turnover (though quite profitable).

One large ISP/web host I know has just sold for nearly 3 x turnover, and from what I can see its quite a highly leverage buyout.

At the other end of the scale, a security guard I know wants to get into the "burger" van

business and has a reasonable pitch organised. However the vans and trailers themselves are very expensive, even secondhand, though this might be down to the very expensive stainless steel fittings and licencing, but I suspect demand might be a factor.

[Leonard Hatred]

How much is that Ferrari 250 GTO again? I was saving up for one...

[@contradevian]

How much is that Ferrari 250 GTO again? I was saving up for one...

There was a market in more mundane classics about 10 years ago I think. By mundane I mean British saloons and sports cars of the say the 50's/60's era.

I used to knock around in a Rover 100, several Rover 2000's, Citroen DS etc.. Around the late 80's these could be picked for sub £500 because they were still basically "bangers." But perhaps the most popular was the Morris (moggy) Minor.

Then in the 90's there was a bit of a craze for them, loads of classic car mag's appeared on the shelves, and the prices started to get silly, relative to the maintenance and restoration costs.

I don't think these "classics" would have proven a good investment, so you've really got to into them as a hobby to make it worthwhile.

But who knows? A Talbot Avenger is perhaps now "collectable?"