Own the car or own the company

[Boomer54]

Just having a quiet read of the FT and came across this which hitherto I was unaware of as it never came up on my investment radar screens.

Aston Martin !

Oh, how many of us gazed at the screen as Bond whisked his femme fatal away in the only thing that looked more beautiful than it's passenger ...the CAR.

Yet this is a strange and mysterious tale when one looks further. Gorgeous looking product that in a nouveau rich world ( of luxury buying status) you would think it had to be a  roaring success. However not so! Had you bought shares at it's launch price of £190 per share then today 5 yrs later you would have lost a whopping 94% of your capital. In trading parlance this is termed 'ruin'. Indeed, had you put the same capital into the hard asset which is the car then capital preservation would have been far more effective.

There is a moral to this cautionary tale. Do not be seduced that because you like the product you should buy into the company. It may have worked well enough for Warren Buffet and Coca Cola, but there again he really bought the management not the bottle. So, if ever one is tempted please look carefully beneath the covers before the chequebook comes out.

[Malc1]

Hahaha Warren Buffet and his side-kick Charlie Munger …… haven’t they done well …… and still going …… keeping the brain cells active wards off lots of health issues …… my role models in life …… think Warren until recently ran a beat-up old banger til his daughter made him upgrade …… to a much newer but 6  y/old car 

Canny guy would never waste his money on cars ! UNLESS he secretly hoardes a fleet of Astons simply  for capital appreciation 🤔

Malc 

[dutchie01]

42 minutes ago, Boomer54 said:

 

Yet this is a strange and mysterious tale when one looks further. Gorgeous looking product that in a nouveau rich world ( of luxury buying status) you would think it had to be a  roaring success. However not so! Had you bought shares at it's launch price of £190 per share then today 5 yrs later you would have lost a whopping 94% of your capital. In trading parlance this is termed 'ruin'. Indeed, had you put the same capital into the hard asset which is the car then capital preservation would have been far more effective.

There is a moral to this cautionary tale. Do not be seduced that because you like the product you should buy into the company. It may have worked well enough for Warren Buffet and Coca Cola, but there again he really bought the management not the bottle. So, if ever one is tempted please look carefully beneath the covers before the chequebook comes out.

Well said and valid for all types of business. Having said that Luxury products are different. Its about creating an image, a dream, an unobtainable status symbol, something so unique everybody wants one. Aston failed where Ferrari succeeded. The image of AM outside of the UK is mediocre at least. Souped up Jaguars with and interior from a Ford Fiesta. Low tech engines and without James Bond they would have been gone a long time ago. The big DBX can save them as this does tick the right boxes for the wealthy and spoiled clientele. Lets hope they can build on that success and bring out cars that sell. BTW old school way of validating shares is based on history, quality of management, cashflow, profit in previous years. Today that seems all out of the window and its a more speculator view of potential profit in the years to come and forget the history. I dont know how the state of Aston was during the launch price but doubt if it was worth 190/share based on previous performance?

[Boomer54]

38 minutes ago, Malc1 said:

Hahaha Warren Buffet and his side-kick Charlie Munger …… haven’t they done well …… and still going …… keeping the brain cells active wards off lots of health issues …… my role models in life …… think Warren until recently ran a beat-up old banger til his daughter made him upgrade …… to a much newer but 6  y/old car 

Canny guy would never waste his money on cars ! UNLESS he secretly hoardes a fleet of Astons simply  for capital appreciation 🤔

Malc 

Clever guys, but not infallible. In the market no one is. However, their biggest secret (which is no secret at all) is buy right, leave to compound, and at all times be tax efficient. I can think of 3 guys within 1/2 mile of me who did just that at a more modest level of course and voila a comfortable retirement that is essentially based upon good decision making coupled with delayed gratification ( leave it, don't spend it). If I could take your average Joe Public and brainwash that into him then society would be much better prepared for the long term. heck they would look like Norway ! 😃

[Boomer54]

9 minutes ago, dutchie01 said:

Well said and valid for all types of business. Having said that Luxury products are different. Its about creating an image, a dream, an unobtainable status symbol, something so unique everybody wants one. Aston failed where Ferrari succeeded. The image of AM outside of the UK is mediocre at least. Souped up Jaguars with and interior from a Ford Fiesta. Low tech engines and without James Bond they would have been gone a long time ago. The big DBX can save them as this does tick the right boxes for the wealthy and spoiled clientele. Lets hope they can build on that success and bring out cars that sell. BTW old school way of validating shares is based on history, quality of management, cashflow, profit in previous years. Today that seems all out of the window and its a more speculator view of potential profit in the years to come and forget the history. I dont know how the state of Aston was during the launch price but doubt if it was worth 190/share based on previous performance?

Financial history is a sort of hobby of mine and I think I am pretty confident when I say that speculative investment as always been with us simply because human nature is what it is. That is, too much of it is based upon emotional reactions as opposed to objective analysis. The latter of course is not infallible if only because what you think you know is sometimes just clever misrepresentation. Still longstanding good management is usually a good way around that issue. Hence, Buffet buying the management comment.

[Malc1]

……… and then one simply passes on …… dies and you should only be remembered for the Good you’ve done in life ……. reading one’s FT from up high and reflecting on what more you could have done …… ah yes, buying into the Management of the Coy and instilling much of that same ethos …….. 

simply You can’t Take it With You  eh ! 😇

Malc 

[Boomer54]

5 minutes ago, Malc1 said:

……… and then one simply passes on …… dies and you should only be remembered for the Good you’ve done in life ……. reading one’s FT from up high and reflecting on what more you could have done …… ah yes, buying into the Management of the Coy and instilling much of that same ethos …….. 

simply You can’t Take it With You  eh ! 😇

Malc 

Let me put it this way I don't believe in inheritance tax , but not for the usual reason. I don't believe in it , because stored wealth passed along is way too inefficient at every level. Spend it, gift it , but for god sakes don't try to sit on it and hatch it like an egg !

 

[Malc1]

1 hour ago, Boomer54 said:

Let me put it this way I don't believe in inheritance tax , but not for the usual reason. I don't believe in it , because stored wealth passed along is way too inefficient at every level. Spend it, gift it , but for god sakes don't try to sit on it and hatch it like an egg !

 

Unless of course it’s the house and home of the otherwise inheritance taxable family members ……… thinking passing on a car is tax free maybe ? 

Roll on the plaything fleet of collectible Astons 👌

 

But cash and those evil Securities, yes, flog the lot the week before you die and just give it all away ……. even giving some to HMRC 

Just like Bernie Ecclestone last week ,,,,,,, having to “ donate “ £652 mln to HMRC  ……. help defray some NHS hospitals expenses hopefully 👏

At age 92 is it ?  I doubt he’ll worry too much about paying his electric bill nor his Waitrose / Aldi shop 🤔

Malc 

[Boomer54]

51 minutes ago, Malc1 said:

Unless of course it’s the house and home of the otherwise inheritance taxable family members ……… thinking passing on a car is tax free maybe ? 

Roll on the plaything fleet of collectible Astons 👌

 

But cash and those evil Securities, yes, flog the lot the week before you die and just give it all away ……. even giving some to HMRC 

Just like Bernie Ecclestone last week ,,,,,,, having to “ donate “ £652 mln to HMRC  ……. help defray some NHS hospitals expenses hopefully 👏

At age 92 is it ?  I doubt he’ll worry too much about paying his electric bill nor his Waitrose / Aldi shop 🤔

Malc 

Well if I were to give you the principles of good portfolio management encompassing some Monte Carlo modelling then you would see writ large the mistake some people make when it comes to familial homes and inheritance tax. Damn it Malcolm stop snoring.

[Malc1]

1 hour ago, Boomer54 said:

Well if I were to give you the principles of good portfolio management encompassing some Monte Carlo modelling then you would see writ large the mistake some people make when it comes to familial homes and inheritance tax. Damn it Malcolm stop snoring.

I know bugger all about Inheritance Tax nor worrying about passing on my modest home ( asset ) to anyone  .  if my taxable estate exceeds the threshold I'll be a tad surprised ......... 

I'm in the process of making sure it all ( well most of it anyway )  gets away from me before I  kik'da'bouquet .... .  I'll better start shopping in Waitrose in future ...  and buy myself that 3rd Ls400 .  or could it be a pair of Sc430s I'm wondering .......  maybe I NEED 7,       one a day ....... 

I sure won't be going for the chauffeur / driver that my delegated Delhi Boss is having for his brand new car next week .............. touchy feely for me with my driving BUT I have urged him just never to want to pass any driving test in India .  the Delhi roads are just " amazing " ...  24/7 Traffic Calming speed and dodging the odd elephant, camel, horses and those revered cows that scatter all around the streets 

Oh for the luxury of a complete 7 day set of Lexiii

Malc

[Boomer54]

2 minutes ago, Malc1 said:

I know bugger all about Inheritance Tax nor worrying about passing on my modest home ( asset ) to anyone  .  if my taxable estate exceeds the threshold I'll be a tad surprised ......... 

I'm in the process of making sure it all ( well most of it anyway )  gets away from me before I  kik'da'bouquet .... .  I'll better start shopping in Waitrose in future ...  and buy myself that 3rd Ls400 .  or could it be a pair of Sc430s I'm wondering .......  maybe I NEED 7,       one a day ....... 

I sure won't be going for the chauffeur / driver that my delegated Delhi Boss is having for his brand new car next week .............. touchy feely for me with my driving BUT I have urged him just never to want to pass any driving test in India .  the Delhi roads are just " amazing " ...  24/7 Traffic Calming speed and dodging the odd elephant, camel, horses and those revered cows that scatter all around the streets 

Oh for the luxury of a complete 7 day set of Lexiii

Malc

"Oh for the luxury of a complete 7 day set of Lexiii" ...oh, now you've got me thunking and what about each a completely different colour ? Then we have the issue of matching the specific colour to it's specific day of use. Alternatively, we could just identify each colour as a particular emotional mindset and drive that when we felt that particular way. Nah, I'd get bored driving black 7 days a week.