Red Blossoms provides information to many classic car enthusiasts, traders, investors and investment funds. For the investors the general objective is to realize an interesting return in a period of at least 5-10 years with a medium risk.

Two requirements for investments in classic Ferrari models have been formulated:

  • An expected substantial annual value increase;
  • An expected stable annual value increase.

The future can’t be predicted but historic value trends can be an indication. To identify models that meet these requirements, models are analyzed by the following factors:

  • Substantial value increase in the last 10 years and;
  • Stable and regular value development in the last 10 years.

For the analysis of the value increase in the last 10 years, Red Blossoms has developed the Return On Invest Rate (ROI Rate). For the analysis of the stability and regularity of the value development in the last 10 years, Red Blossoms has developed the Value Increase Stability Rating (VIS Rate).

When the ROI Rate and the VIS Rate systems are combined, a third rating system is formed, which gives an indication of the investment attractiveness of a model. This rate is called the Investment Attractiveness Rate (IA Rate).

Return on Investment Rate (ROI rate)
The first requirement is to select models, which have shown a substantial value increase in the last 10 years. To clarify and compare the value development performance of all models ‘return on investment’ is used. There are several ways to determine ROI, but the most frequently used method, which is the method used in this report, is to divide net profit by total investment. If the value of a car is $400.000 and the initial investment was $300.000, a net profit of $100.000 would be made if the car would be sold. The ROI would be 33 percent (33%). In our analysis ROI is basically a ‘virtual’ ROI.

Fig. 1: Classic Ferrari Return on Investment Rate (ROI Rate) top-20 models (an overview of all models is published in the Classic Ferrari Value Development Report)

 

Value Increase Stability Rate
For the analysis of the stability and regularity of the value development in the last 10 years, Red Blossoms has developed the Value Increase Stability Rate (VIS Rate). This system gives an assessment of the value increase stability or the regularity of the value increase in the last 10 years.

Fig. 2: Classic Ferrari Value Stability Rate (VIS Rate) top-20 models (an overview of all models is published in the Classic Ferrari Value Development Report)

 

Investment Attractiveness Rate
When the ROI Rate and the VIS Rate systems are combined, a third rating system is formed, which gives an indication of the investment attractiveness of a model. This rate is called the Investment Attractiveness Rate (IA Rate).

Fig. 3: Classic Ferrari Investment Attractiveness Rate (VIS Rate) top-20 models (an overview of all models is published in the Classic Ferrari Value Development Report)

 

Classic Ferrari Investment Attractiveness Matrix

Red Blossoms Classic Ferrari Investment Attractiveness Matrix
Fig. 4: Red Blossoms Investment Attractiveness Matrix Classic Ferrari’s


Red Blossoms Investment Attractiveness Matrix:

  • Models which have shown a ‘Stable Value Increase’ and a ‘High Absolute Value Increase’ (green cell) are the models to invest in.
  • Models which have shown a ‘High Absolute Value Increase’ and an ‘Unstable Value Increase’ (yellow cell) are speculative models, which could be interesting in the long term, but in short term could underperform compared to other models.
  • Models which have shown a ‘Stable Value Increase’ and a ‘Low Absolute Value Increase’ (orange cell) are underperforming models. Some people believe these models will become popular someday, but this is very unsure.
  • Models which have shown a ‘Low Absolute Value Increase’ and an ‘Unstable Value Increase’ (red cell) are the last models to consider to invest in.

Important note:
The AI Rate is a tool, which can help selecting models to invest in, and is based on the theory that value development in the past could be an indication for value development in the future. Models with high ratings are theoretical interesting, as they have proven to increase in value substantially and to increase in a stable way in a longer period of time.

But the effect of the extreme high value increases in Y2014-2016 on this theory is unclear. It is unknown if the value increases continue, or temporary stabilization of values will occur. The AI Rate should only be considered as a long term indication.

All ratings are published in the ‘Classic Ferrari Value Development Report‘.

 

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