Pricing collector cars

My good friend and motorcycle riding buddy, Philip Richter, fritters away some of his free time by putting his thoughts about cars and the car market into a newsletter. In fact, Philip’s “Turtle Garage” inspired my newsletter. My readers who like cars are going to find Philip’s April 1 newsletter fascinating. It ranges from old Porches to today’s Tesla vs. everyone else battle. Enjoy it – I sure did.

So SLAP me

Because I subscribe to a variety of websites and have a good-sized group of Facebook friends linked more by shared love of family, motorcycles and cars than political affiliation, I run across my fair share of questionable news reports.  Whether they are conspiracy theories or just scary threats to which one should pay attention, a pattern always seems to be lurking in the mist, something that should alert me to the possibility of “fake news.”  I could just never spot it.

Then this week I read a terrific article by Jeannie Banks Thomas, a folklorist of all things, and a professor at Utah State University.  She nails it perfectly and provides four simple questions to tip you off that you need to get your fact checker fired up.  I just loved it.  Here is a link to her complete article, but I describe the high points below.

She uses the acronym S.L.A.P, as in slap your forehead, something those of us from the Midwest often refer to as the Norwegian salute.  You can do it, right?  You hold an open palm out in front of you, then briskly move it toward your forehead.  When your hand hits your forehead with a slap, you’ve done it correctly.  True natives also mumble “Uff da” under their breath, which adds an air of authenticity.

Professor Thomas’s S.L.A.P. acronym is as follows:

S: Scare or Shock – Does the account attempt to scare or shock?
L: Logistics Test – Does this account rely on or involve complicated, far-fetched logistics?
A: A-List – Does this story involve celebrities or famous people? Does it have Donald Trump, George Soros, Hilary Clinton, Vladimir Putin, or Joe Biden in it?
P: Prejudice Test – Does the account demonize or portray a person or group negatively?

“YES” answers should trigger our BS detectors like a fire alarm. When that happens, do some quick research.  Remember, research is not what someone posts on a message board. Research is vetted information supported with credible evidence.  Professor Thomas reviewed over 50 years of legend, rumor and conspiracy theory and analyzed over 100 legends.  It was during this work that these four patterns emerged. Don’t get me wrong, not everything you see which results in “yeses” to the SLAP questions is guaranteed to be bogus – just know the probability is much higher it will be, and you need to check before forwarding it along like a clueless doofus.

I love this easy tool which can help anyone quickly assess a story’s veracity.  And given the amount of Norwegian blood in my veins, it’s easy for me to remember – I just salute.

Keep it, trade it or sell it?

Our amazing 2014 Audi Q5 the morning of March 8, 2022

When our 2014 Audi Q5 passed 75,000 miles, (it has now surpassed 100,000), I began to get nervous.  On the one hand, the warranty was gone, so repair costs would fall on us. On the other hand, this had been one of the best cars we ever owned.  We purchased it in 2014, buying into the whole “clean, efficient, diesel” theme being hyped by Audi and Volkswagen.  Later our Q5 would get caught up in VW’s “diesel-gate” scandal; it minimally affected us or the car’s performance, other than about a year when letters with checks and apologies from Volkswagen, who owns Audi, filled our mailbox.

The Q5 happily pulled my other vehicles around. Here it is on a trip to a Lotus meet in Colorado.

The car performed admirably, to say the least. Its relatively low horsepower (240 HP) was offset by over 425-foot lbs. of torque. As Jay Leno once said, “Horsepower sells cars, but torque wins races.” Besides being spunky off the line, pulling a trailer loaded with my 4-passenger Polaris RZR, spares, tools, four adults and gear up Highway 17 from Phoenix into the higher elevations was a walk in the park for the Audi.  I used to laugh as we easily passed large, roaring and belching pickup trucks, gasping due to the long, steady climb.  On top of that, it was exceptionally efficient.   Filling the tank, we loved seeing the “miles remaining” indicator show 585 or more miles.  Sure, the Audi had an extra-large tank, but the number would not change for the first hour or so after we left the gas station, and only then would it gradually begin coming down. Audi claimed 32 MPG and our experience was it may have been better than that.  The 8-speed automatic transmission was tuned for efficiency and it delivered.  Nevertheless, no matter how much we love a car; there is a time to let it go.  How do we recognize that time? Should we keep it, trade it in or sell it?  When we got close to 90,000 miles I knew we were living on borrowed time and a year later I was proven right.

Fears about costly repairs on higher mileage German cars were pooh-poohed by several car expert buddies. They would nod sagely and say something like; “Diesel cars easily go 275,000 miles or more. Hell, at 100,000 it’s just getting broke in.” Still, I worried. We’ve had experience with several new cars over the years.  In most cases, we viewed their passing the 50,000 mile warranty period as the time to begin thinking about letting them go.  Many people take an opposite approach, thinking something like:  “Now that the $313.40 monthly car payment is gone, we’ll set that money aside in a special account for car repairs.  In the long run, we’ll be better off.”  I think that only works in theory.

Here is how it playing out for the Audi.  Our first, out-of-warranty service was for $849, at 53,350 miles.  Up until then, all warranty work was either included or part of the “pre-paid” warranty option. In 2018 our costs were $720 for brake pads and an oil/filter change.  In 2019 we spent $1,540.13 for its 75K mileage service and new tires.  In 2020 the car cost just $698 for its 95K service.

In 2021, things started to go south.  First, it was brake pads at $567.28, then a water pump leak for $1,209.18.  This was followed by a need to replace the front bushings (upper and lower) a cost of over $4,000 if done by Audi.  However, a local alignment and suspension specialist shop (Network Alignment) had done good work on my other cars.  Cheaper than Audi, it still cost us $2,969.59 using original Audi parts.

And then, just as we’re getting the car ready to transfer to my nephew, Audi decides it needs $8,881.91 in additional work.  $2,639.01 to replace the engine mounts, $3,723.11 to fix a newly developed coolant leak, $384.64 for a rear wiper blade (are you kidding me?), and 4 new tires for $1,739.

Kelly Blue Book indicated the trade-in value at about $13,500.  With the $3K already spent on the front bushings and another $2K for motor mounts I’ve got $5K into it and I’ve yet to address the coolant issue (potentially $3K but not urgent – it’s easy to add coolant and the leak is slow).  Plus it will need tires, another $1500 unless I buy some cheapies.  So, it could run over $8,000 and possibly more.

Bottom line, I’ll never again recommend the “keep and repair it” approach, especially once you’ve exceeded the warranty by 15-20,000 miles.  Perhaps, if you’re mechanically inclined and can do your own repairs, it might make sense.  However, given the complexities of newer cars, I suspect that direction is fraught with pitfalls as well. I’m curious as to what others think about this and your experience. Let me know in the comments section below.

Best success correlation ever

After nine of them, I know a good bit about starting companies. After investing in at least twenty, I spot founders with a high success likelihood pretty quickly. An author I admire, Taylor Stevens, recently penned a newsletter nailing one of those elusive success factors brilliantly.  For her, it is all about success in writing and publishing, a field in which she excels. The similarities resonated with me immediately and I couldn’t wait to share them.

Liars' Legacy (book cover) by Taylor Stevens

First, Stevens is a successful author. She freely shares her advice with aspiring writers. You can read all about her on her website. On March 4 (2022) her newsletter arrived with the subject line “If you run with wolves…”  In it Stevens discusses how many aspiring authors read and post in publishing and writing-oriented blogs and forums, getting responses from individuals “without experience in publishing, and so often wrong. The comments come from people who spend a lot of time on those forums, arguing with each other and or talking up their own works in progress.  Stevens, after a short discussion, cuts to the chase:

“If you want to reach a level higher than where you are, you don’t do it by getting information and learning from people who are at your level, or God forbid, beneath you. You don’t plot your climb up Mount Everest by talking to the people down at base camp who’ve only watched other people climb the mountain—you hire a guide who’s been there and gotten safely back. If you want to be successful, seek out people who know, listen to people who’ve already walked the path that you’re on.”

This reminds me so much of budding entrepreneurs who have an idea for a business and want to make it a reality.  Often it appears these people are endlessly involved in talking about the idea, how it would work and why it will win.  These discussions with friends, and on forums and blogs appear to be almost a substitute for moving forward.  Sometimes they’re looking for clues on how to move forward, unaware this is not the place to find them.  Winners focus on doing the work versus talking about the dream and the best advice is from people who’ve succeeded in the area in which you wish to compete. Best to keep your idea secret and use as motivation the vision of how you’ll feel when you succeed and bask in the adulation of all those who didn’t think you had it in you.

Most ideas have little value in themselves; it is the things surrounding an idea that create value. Having an idea that your “X device” will revolutionize a particular industry means very little unless you accompany it with in-depth and diligent research showing how poorly current offerings perform the task that “X device” performs so well. Fifty or a hundred in-depth interviews with players in the space leading to a conclusion supporting the need for “X device” has value that the idea alone does not.  Detailed technical drawings of how “X device” would be manufactured, where, with what materials, and for what cost, have value. Plans and business analyses showing how the product could be introduced and marketed to those that would buy it adds value.  Many entrepreneurs and inventors are in love with an idea and wish to start companies, yet they remain in the talking and conceptualizing stage year in and year out.  They are either too lazy or undisciplined to do the hard work, the work they may not like or enjoy doing, to make their dream a reality.  Instead, they’ll while hours away in forums and on blogs, responding and posting, defending their brilliance, expounding to friends and family on the cleverness of their idea, while others go out and make things happen by actually doing the work.

The other part of Stevens’ newsletter which resonated with me is the number of individuals so much like she described, that surround the startup infrastructures in which I was and am involved.  For every actual company founder here in Phoenix (and in Palo Alto, California before that), I found at least ten people attending events, pointing to the shortcomings of presenting companies, expounding on the merits of various business plans and approaches, demonstrating their vast intelligence and insight and how far a company would go if only they’d have the foresight and wisdom to hook up with them and take their valuable advice – all for a cut of the equity, of course.

Don’t get me wrong, there are highly ethical and professional individuals offering services to early-stage companies. They do it at a fair price and offer superb value and I’m proud to know many of them.  But budding company founders need to avoid those who chatter and criticize from the sidelines, or worse, sell advice and expertise in the absence of a success track record. Building a company with one or two people, no money, and a 20-page pitch deck into something generating tens of millions a year, results in a great many lessons learned.  Doing it twice, three times, or more, even if you fail, provides even more knowledge about what does and does not work.  Curiously, success in other aspects of business — say spending a career with a large multi-national company — rarely leads to success in starting a company. Budding entrepreneurs need to find mentors to work with who have done it, not someone who’s merely watched a lot of Shark Tank episodes and read books on successful startups.

Television shows and movies about startups, “Silicon Valley, Dirty Money, Shark Tank, Celebrity Apprentice, The Inventor: Out for Blood in Silicon Valley” and others, paint incredibly unrealistic pictures of the actual life in a start-up and the incredible number of elements necessary for one to succeed.  Like nearly everything else in life, there are few shortcuts. You have to be lucky.  To be lucky, it also helps to know the actual definition of luck, and so, from someone who’s been lucky, here it is:

“LUCK = When hard work and preparation meet opportunity.”

An excerpt of Taylor Stevens’ March 4 Newsletter below:

Hi Steve,

Like many people, I read blogs and forums on topics that interest me, and over the past several years this has also included forums for aspiring authors, as well as blogs that deal primarily with self-publishing and social media. (I will write more about traditional vs. self-publishing in a future email, this email is about the value of others’ input.)

Sometimes, if I’ve read a particularly good piece on the subject, or even one that I think is off the wall but it raises interesting questions, I will spend a bit of time reading the comments and the conversations that follow. And mostly I come away from those conversations vacillating between amused and horrified because (again, mostly—there are definitely exceptions) the comments and opinions, so full of “rightness” and “righteousness,” are written by individuals without actual experience in publishing, and are so often wrong. And many of these comments are from “repeats”—people who clearly spend a lot of time on those forums, arguing with each other and or talking up their own as-of-yet-not-complete widget or work in progress. […]

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