The Ultimate Wish List: How To Turn Your Passion Into Investments
April 26, 2018 | BY Hong Kong Tatler
We asked experts to highlight the best passion investments that allow enthusiasts to splurge first and speculate later:
Business owner and car collector William “Chip” Connor II shares insights on collectible automobiles—and two in particular that are ripe for investment:
In the opinion of many, the value of collectible automobiles as an asset class has outpaced virtually any other class of investment, financial and otherwise, over the past 15 years. However, with some exceptions, most of this appreciation is attached to automobiles made prior to the mid-1970s. Exceptions would include the McLaren F1 from the mid-1990s and the limited production “hypercars” such as the Ferrari Enzo, Porsche 918 and McLaren P1.
In general, mass production and technical complexity conspire against the post-millennium automobile as a future collectible. There are exceptions. There are cars of unique specification that, for a variety of reasons, remain in strong demand. Nowhere is this better reflected than with the iconic Porsche 911. While the 911 is a mass-produced car, the 911 models of rare specification are in particularly strong demand. These include 911 Turbo variants from the 1990s and RS models, which are highly sought after and sometimes command in excess of seven figures in US dollars.
In my view, two cars that are below seven figures in US dollars and which merit consideration as future collectibles are the US$150,000 Porsche 911 GT3 and the US$750,000 McLaren Senna. Both models are comparative anachronisms in an era of rapidly advancing hybrid technology. Neither employs electric motors for propulsion. The McLaren achieves performance by virtue of being very light coupled with a powerful, twin-turbocharged V8. The Porsche features a normally aspirated four-litre, six-cylinder engine mated to a conventional six-speed manual transmission. Both cars embody end-of-an-era features, notably the six-speed manual transmission in the Porsche and the non-electrically augmented propulsion in both cars.
I particularly like that the cars are produced by manufacturers with decades of bona fide racing success. They are not stylish pretenders. Both embody race-derived technology. Both boast a support base of knowledgeable, hard-core fans. Both are brilliantly engineered with differing engineering philosophies. They are not trying to be all things to all people.
Wise investment and passion frequently work at cross purposes. True collectible cars are the early cars, meaning cars from the 1970s and earlier. However, a lot can happen over a period of decades. Poor restorations, inauthentic components, incomplete record keeping, and sometimes completely bogus fabrication ruin investment value. So it is very important to do your homework. The good news is that prices of more common cars from the ’50s and ’60s—marques that include Porsche, Ferrari, Corvette and Austin-Healey—are off their price peak as of a few years ago. Many remain highly affordable, give great satisfaction of ownership, and will hold their value if not actually gain.
Hong Kong Tatler’s editor-at-large for art and design, William Zhao, suggests fellow collectors should keep an eye on works by Carol Rama:
I think Carol Rama is one artist whose work is likely to be a good investment. The market has long underestimated Rama and now collectors are finally paying attention to this self-taught Italian artist. Her works are increasingly popular in both the primary market (where collectors buy art directly through galleries) and the secondary market (where works are sold through auction).
Last year, the renowned New Museum in New York held the biggest museum survey show of Rama’s work ever held in the US. The exhibition featured more than 100 of Rama’s paintings, objects and works on paper, highlighting her interest in the human body. This museum show is a great sign for existing and would-be collectors because a stamp of approval from a major museum helps secure an artist’s reputation. And as an artist’s acclaim increases, prices are likely to rise too.
If you’re interested in collecting work by Rama, I’d recommend first reading The Passion According to Carol Rama. As a general tip, when you do start collecting, learn as much as you can about art history and always trust your gut—don’t buy art that doesn’t move you.
Master of Wine Debra Meiburg recommends Château Margaux 2001 as a wine that is pleasing both on the palate and in its potential for price appreciation:
When it comes to wines that appreciate in value, it is always best to go with the classics. There are many to choose from, but you can never go wrong with Château Margaux. Collectors treasure Margaux. As one of the original four properties to receive its Premier Cru classification in the Bordeaux classification of 1855, this property has a history of excellence and is widely regarded as one of the top producers in the world.
See also: A Beginner's Guide To Wine Investment
For vintages, I like Margaux from 1996 and 2009 (and also for investment, as you shouldn’t open them for 10 years). I may be a little biased here but I also have a soft spot for 2001 Margaux, the year I got married. I like that the wines are crisp and not overblown. To me, Château Margaux sings with fruit purity, elegance and finesse. Its supple and silky tannins are coupled with a sumptuous finish, along with a prestigious and enduring history that ensures its timeless quality and value in the market.
When it comes to investment in any field, there is no such thing as a “sure thing.” Wine in particular has vintage variation to contend with also. But in wine, Margaux is as close as you’ll get to a “guaranteed” solid investment. For significant investment gain, wine needs to be held for years, if not decades. While wine has proven to be a good investment, the most successful collectors buy wine because they love it. Most collections are sold only when the owners realise that they overbought and will never be able to drink their way through the bottles. Also, tastes change. Bordeaux lovers often become Burgundy lovers, for example, as tastes in dining become lighter. Investors must be aware that provenance, authenticity and storage are critical for resale value.
Yachts are the ultimate passion purchase, but there’s a way to cut the expenses and cover costs, advises Suzy Rayment from Asia Yacht Press:
It’s easy to get hooked on the boating lifestyle once you’ve experience it, but yachts are expensive toys. Ownership can be terribly complicated for anyone new to the sea, and if the boat is only used on an occasional basis, it quickly becomes a very expensive possession.
However, a clever fractional ownership programme allows you to own a yacht without breaking the bank. Fractional ownership, whereby the vessel is owned by a number of people and its costs are shared among the owners and charterers, is a relatively new concept in boating—and very much in tune with the times, the “uberisation” of the world. Just five years ago there was no luxury yacht charter market in Hong Kong, but now there is a demand and—since supply is limited—an opportunity too.
See also: Lexus Is Going Into The Yacht Business
The fractional ownership business model is working in Hong Kong. Depending on the yacht, this scheme can save owners over 90 per cent of the operating costs versus owning a yacht outright. Entrepreneur and yacht owner Eric Noyel was one of the first to understand the benefits of a shared ownership plan with his luxury Numarine 78, one of the 30 yachts that are taking part in this innovative ownership programme.
For such a programme to work, you need to partner with a turn-key operation that takes care of absolutely everything—purchase, registration, licensing, insurance, crew, technical services, maintenance, fuelling and chartering. There are reliable companies in Hong Kong that can offer these services but you need to be savvy and choose the right broker.
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