Quote:
Originally Posted by Spiffav8
A friend of mine recently opened "The World War 2 Aviation Museum in Colorado Springs, CO. Not something to many of your friends do and being a huge WW2 aviation geek, Laurie and I drove over the hill to take the tour and get caught up with my friend. While there we also toured his restoration shop and got a pretty up close look at a few "special" aircraft that are being restored. One being a P-38 Lightening called "White 33". It was flown by both of WW2's leading aces and will be part of Paul Allens collection when finished. The history attached to this particular P-38 increases the value greatly. One would think that a person like Paul Allen would be first in line for an aircraft like this, but he actually got lucky. Another client started the project. He was a rich man when he went to bed one night and woke up the next day to find that he was penniless.
This really got me thinking. There's a lot that can go wrong in the world, but assets that play on a global scale (such as a priceless WW2 airplane) would be a good investment....wouldn't they?
|
There's two kinds of assets. Liquid and Illiquid. You need more liquid assets in order to be able to hold on to, and buy, illiquid assets.
Houses - art - cars - planes - property - etc are illiquid. They can be very tough to sell in "down" markets. When that happens the value sinks. You want to be a BUYER of illiquid assets in down markets. BUT.... There's always the big butt in the room.... in order for that to take place you have to have plenty of liquid assets. Liquid assets are stocks and bonds and cash. These also have down markets so even liquid assets such as stocks and bonds - while being liquid - creating the liquidity can create losses.
So -- what you always strive for is to have enough INCOME (cash flow) so that you never have to sell in down markets... you can just buy in those markets - hold on to the asset - and continue to have fun.
That's why rich people get richer and poor people get poorer.... Poor is a relative term and doesn't have to describe those that are destitute. Poor can be "cash poor" or "cash flow negative".... thus forcing sales of assets at below market value.
To me -- being "poor" could / does - describe someone that has to sell one car to buy another... or to fund the next project. That's not good management of assets. Because it often leads to the loss of both. That's "cash poor". A person should be able to fund these kinds of assets during good and bad times out of cash flow.
It's funny because all assets FALL in unison. Think of this last "big recession".... car values went south at the same time as housing... and the stock market. The folks that didn't survive - or took big losses - where the ones that didn't have adequate liquidity or liquid assets. Those that did - bought stuff at huge discounts and are now making a killing.
Brian Hobaugh SCCA National Tour June 2014
First Hemi 'Cuda Convertible Ever Built
Short clips: Goodguys Pleasanton autocross and pit videos
The business is doing very well though!
Apperently with one swipe of Obamas pen, the ivory business took a dump, as in doesn't exist anymore. Illegal to trade, ship, sell, legally you can't give it away. What does this have to do with anything? My customer took a multi million dollar hit overnight with a portion of his business, he still has the cars, the big house and a successful business because all his eggs weren't in one basket. The people in the industry that all they dealt with was ivory...have nothing or very little. These guys aren't street vendors selling goods to tourist but high end art dealers trading globally.
Linear Mode
