Friday, January 21, 2011

NYT: "You Think Houses Are a Slow Sell? Try a Yacht"

Remember, just the other day I was talking about the premier rich man's toys / credit bubble assets: planes, boats, and most especially art:

Sure, you can get planes and boats that are as big (and expensive) as your heart desires, and there is a long lead time to build them, so the price swings are extra volatile.
Fortunately, the New York Times publishes anecdotal verification of everything I write. Just like with real estate, the received wisdom during the credit bubble was to lever up and own as many assets as possible:
In boom times, yacht enthusiasts would order a new dream boat and keep their old one for the two or three years the builder needed to complete the new boat. Then, they would quickly sell the older yacht to impatient new millionaires and billionaires eager for their requisite status symbols.
The article goes on to describe a certain New York money manager who commissioned a 161-foot yacht in 2007 despite already owning a 134-footer. Of course, now he is looking to sell both.

Ask me how impressed I am with a money manager who got caught massively long yachts in 2007.

7 comments:

Stagflationary Mark said...

"Then, they would quickly sell the older yacht to impatient new millionaires and billionaires eager for their requisite status symbols."

I retired in 1999. Somewhere around that time I put myself on a 2-year waiting list at a local marina. It cost me $25.

Two years later my patience paid off. I own an inflatable kayak instead, lol. No joke!

I look every now and then. I might own a 30' to 40' sailboat someday.

The last time I looked I stumbled upon a message board where one poster had an amusing theory. He figured since hyperinflation was sure to arrive that he could simply buy a nice sailboat and basically get it for free. Worst case its resell price wouldn't fall as inflation picked up.

Deep down he knew a boat was a hole in the water you pour money into, but he so much wanted to believe!

And lastly, a few years ago I saw an ad for a boat slip on Lake Washington. They wanted $30k for it. I figured I'd someday want a boat slip if I ever decided to get a boat. I also felt that being a boatslip landlord in the meantime would be fairly safe. It's not like I'd need to replace appliances. Let's put it that way.

I called to inquire. I never got a call back. It was roughly at the height of the real estate bubble and I'd guess it was sold within the first few minutes. I'm pretty sure the owner of that slip underpriced it relative to what the market could "bear". ;)

CP said...

Boatslip landlord is hilarious.

As good as owning a stock exchange seat or a taxi medallion.

I'm going to do a front page post about this.

getyourselfconnected said...

From last post:
I am a major NFLX bear, but I also used the stock for a nice 6+% gain on a trade. I am branching out.

Mark is dangerous so beware. Did you know he invented..................

Stagflationary Mark said...

Hahaha!

I'd also be interested in being a parking space landlord for the land-lubbers someday, lol.

That's assuming I could find one for the right price and keep up to date on my concrete maintenance skills! Once again, seems like easy money for a lazy person. And I plan to stay lazy! :)

I had a job working for a branch office of a Japanese landscape architect company in downtown Seattle once. My boss told me that at that time (peak of their real estate bubble in 1990?) a parking spot could be much of a family's net worth. Many didn't even own cars. ;)

Agent Vanilla said...

I made an offer on a small craft, owned by 3 gentlemen after 1 repatriated. The offer was not accepted. About 1-2 months later, Gentleman #2 took the boat out with about 8 people, woman and children, two days before a typhoon landed. The women were urinating in a bucket onboard and they accidentally dropped it over the side when emptying it in the choppy ocean. Gentleman #2 (aka The Captain) jumped overboard to retrieve the bucket and found himself unable to get back on board. The passengers were unable to sail the vessel.

After the US military and Coast Guard got done arguing about who was responsible for rescuing the people, the US military came to the rescue. The Captain was found clinging to a buoy with the bucket.

The ship was lost and the two owners charged with rescue fees plus towing fees to remove the hazard.

I shit you not. I am sort of not so interested in sailing anymore.

getyourselfconnected said...

I own a kayak.

CP said...

Poor NFLX, good product, but the profit margins are going to disappear.

What's funny is that what got investors so excited - streaming - is going to be what kills them, because they will have to pay real money for the content.

I'll probably do a post about it.

Sailing is great fun - there are morons involved in every activity: skiing, driving, investing. You have to watch out for them.