My Barrett Jackson thoughts

[ProdigyCustoms]

I just thought I would write my view of "the State of the market after Barrett Jackson 2006". Being around the automotive collector / toy market for 25 years, and having rode a couple of the previous "waves" in the "toy" market. Some people look to me for my opinion. And then throw it away, LOL! I must have received 20 phone calls, and had another 20 live conversations this weekend about Barrett Jackson. Everything from, WOW, how about that bus! To, can you believe that LS6 convertible! to, how come the guy in the Ferrari hat bought nothing? But the most popular subject was, what happened to the high end ProTouring and Hot Rods?

Some of these conversations are genuine and inquisitive from people that respect my opinion, but many are from "friends" that are the bolt and nut restoration guys, that just think it is F--kin fantastic these cars did not bring back the investment cost, and would just LOVE to see my business, and all other hot rod builders, that destroy American history, die a slow pain full death!!!!. A lot of these guys know, that if only for a few short seconds, both Bill and Michael thought about the possibility of taking The Goat and Prodigy to BJ. Both Bill and Michael stared the devil in the face with considerable unsolicited offers at SEMA on each car. So, if only for a moment, we had to at least consider the possibility of running them through BJ, if nothing else as a pure business decision. Both Bill and ourselves decided we DID NOT build these cars to sell for profit, but to enjoy, cruise and show. My "FREINDS", knowing about the high offers at SEMA, all wonder, (really want to rub it in), if we made the wrong decision not selling at SEMA? And what if we would have taken it to BJ? And what happened to the market for these cars?

Well, I think what we saw this weekend was resistance in the "hot rod / resto rod" market, let's say north of $125 to $150k. For a couple years Time Machines has been offering copies of the Six Shooter for $250K, and the original only brings $170k and $130K respectively? The 29 T gets all kind of press as the coolest thing since sliced bread, and brings didly? Former Riddler bring only 90K? It seems like buyers were willing to spend a hundred grand or so for a cool toy, but not really willing to step up for huge bucks, north of $150k for hot rods, no matter what the original build cost, awards, press, etc. Another thing i think we saw was their are considerably more people with $100K to spend, then $400K to spend, on a toy. Just about any home owner gained $100K equity in their home the last couple years which they can equity line and buy a toy with for 1 point over prime. But the main thing we saw at BJ as it relates to Hot Rod value, is It really is all about being new and fresh. The offers that tend to fly around SEMA appear to be from guys wanting a fresh, crisp, not shown piece, which they can campaign as their own so they can receive the , "WOW, look at that" instead of the, "there's that car again". I told Bill, while neither the Goat or Prodigy were for sale at SEMA, I felt they were never going to be worth more then they were that moment or possibly this BJ auction, and if one wanted to "cash in", now would be the time. As disappointed as some may be that the Motion car "ONLY" brought $450k, the reality is the car brought supreme money that exceeded the build cost as a fresh piece. The Six Shooter, the 29 T, the riddler car, all support my "stale and previously shown to death" theory.

So what does this mean for guys like us building these cars? I think hobbyist will still continue to invest more in cars then they are going to sell for after a few years on the circuit, just so they can be the one to receive the trophy, or have THEIR name in the magazine story, instead of buying the car complete with trophy's and old stories on the previous owner. I also think the hobbyist is very safe investment wise at $100K to $150K, which will get you a KILLER car, but no Prodigy, Motion, Six Shooter, etc built, but probably return nearly the same amount of money after a couple years.

So, the bad news is, if you build a high end Hot Rod, north of $200K that we will call high end, and you show it and have fun with it for a year or two, your probably going to take a little hit. The good news, is it will be worth $100k to $150k, it use to be worth $50K!

So, what does all this mean us personally, It probably means we made a ****ty business decision and probably lost $100K by not taking Prodigy to Barrett or accepting the offers at SEMA, on the other hand, Michael and I get to enjoy the car and maybe we will get a few trophy's and press with our names on them. Surely their an accountant in here that can amortize that!