The “twenty-year rule”.
It looks like i’m not the only guy to have figured out that the world works in cycles. Just look at the fashion industry—bell-bottoms have come and gone……….and come again. I’ve seen acid-wash jeans twice now. What’s next?–shoulder pads for womens’ jackets again?
Patrick Bedard is one of the old-hands at Car&Driver. This is one smart guy, but he uses his brain. It comes from his engineering background, and I’ve always enjoyed his editorials, now for the past twenty-five years.
When muscle cars were all the rage in the 70s, he kept his wallet closed. When muscle cars couldn’t be given away in 1980, he stepped up to the plate and bought himself a cherry example of a now-classic American hot-rod. He still has that car, and that was almost thirty years ago.
He alludes to inflationary cycles and “the twenty-year rule of pop cycle fads” in this recent column of his:
Among collectors of pop culture, there’s a “20-year rule,” which holds that things 20 years old have been out of fashion long enough to be interesting again. Kinney said he hadn’t heard that applied to cars, but 20 years is about the time depreciation bottoms out and cars reach a low point on the price curve.
Is there a Dow Jones index for collector cars? Not a proven one like the Dow, but this past summer, Cars That Matter created seven indexes, each relating to a different category of cars, using values from its past issues back to 2006. At the top end, Kinney’s “Blue Chip” index includes 25 sought-after cars that average more than $1 million. The “Small Cap” index illustrates the other end of the market: a dozen cars under 25 large.
Now this is key. Here he is putting together disparate sources of information and gleaning a pattern. the Dow Jones (DJIA). cycles of in and out, and collector car values. Obviously, this is a pretty observant guy.
As for cars that are so far “out” that they come back “in”, a good example is the 1977 Firebird TransAm as publicized in the movie, “Smokey and the Bandit”. The movie’s 30-year anniversary was last year, and the wild talk on the street was that mint-condition vehicles of the same make/model as in the movie would be good investments, irrespective of the Burt Reynolds cheese-connection.
http://www.iwaynet.net/~gl&lisk/1977ta.html
Any good theory should be simple, and explain a variety of phenomena, if not all of them. Prices and demand for muscle cars bottomed in the early 80s, a period corresponding with very expensive fuel, and sky-high interest rates. IF that is coming back in 2035, then it shouldn’t surprise you that I have already started compiling a shopping list of cars that might interest me when the bottom falls out at the next inflationary bust.