How do you make a small fortune buying classic cars?
Perhaps it’s my investment background but just lately people keep telling me there is a fortune to be made in Classic Cars. Usually these are people who would normally be considered “conservative” with their money – yet, overnight, have become gung-ho high rollers!
What is going on and are they right?
As always the answer lies in the lessons of history.
Just before the Great Stock market Crash of 1929 Joe Kennedy – the father of JFK – said he knew the time had come to get out of the Stock market when shoeshine boys started to give him share tips. Just before the Great Crash of October 1987 shoeshine boys had been replaced by London Taxi Drivers – they too had become “experts” in stock market investing!
My point is this – when any “market” – including Classic Cars – reaches near or at its top – it’s the time when most people pile in – this is sometimes referred to as “the suckers market”. It’s not hard to find out why this happens – this is the time when those who have benefited from big “paper” profits (remember a profit is only real profit when you take it) tell everyone else how much money they have made. Human nature is such (greed?) that we all want a slice of the action.
So how have I reacted to these “golden nuggets” of tips?
I ask a few simple but nevertheless searching questions. First of all, what do they “actually” know about “Classic Cars” – other than the fact someone – somewhere seems to have made some money. Secondly, what costs are involved – things like – Storage / Maintenance / Insurance. Thirdly, what is the downside risk. In every instance it soon becomes apparent they have no idea!
And for reasons I cannot explain – they always seem to refer to E -Type Jags!
At this point I usually tell them about a golden rule of Warren Buffet – one of the most successful investors in history – Never invest in anything you do not understand!
So should you buy “Classic Cars” – well Yes and No!
Yes – if you love cars – take pleasure in looking at them – driving them – talking about them AND are prepared to “burn” £20 notes looking after them – then go ahead and enjoy what your money will buy.
If none of the above, but still have the “urge” – my advice would be – lie down in a dark room for a while and let the urge pass!
Now back to the question:
How do you make a small fortune in buying Classic Cars?
Start with a very big fortune!
PS Do I buy Classic Cars? Yes I do – But that simply confirms I am a fully qualified Barm-pot!