Cash is King

brien23

brien23

Cleared for Takeoff
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Display name:
Brien
Is it time for the Bubble to pop, for all those with cash on the sidelines waiting for the correction of aircraft price they may have been right.
 
eman1200 said:
oh it's dipping........
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Hence my comment. Question is, when to jump in the pool. I'm all about dollar cost averaging...but...holding some cash to take advantage of obvious buying opportunities is wise. Is that time today, tomorrow, next week??? My crystal ball has never functioned well and I did not return it during the warranty period.
 
I was going to be in the market for a 206H at the end of the year, but a push back on the recapitalization of a major investment has that delayed by at least 6 months. With a drop in interest rates if the Fed panics (prior to the election:rolleyes:) that might be back on the table...if interest rates drop enough. However, low interest rates will likely prop up used GA aircraft prices. It never ends.....
 
I think when th market numbers are as high as they are, it might be best this look at them as percentages. Raw numbers look worse than they actually are.
 
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AlleyCat67 said:
Seems like a standard issue market correction. But we’re in an election year, so it’s either being interpreted as the end of times or a nothingburger depending on your viewpoint.
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OR the potential recession they’ve been predicting for several years now. Depending on your viewpoint or facts.
 
eman1200 said:
OR the potential recession they’ve been predicting for several years now. Depending on your viewpoint or facts.
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OR we already had a recession in 2022 (two consecutive quarters of declining GDP). Economists and politicians tend to be pretty loose and creative about what “recession” means.

Depending on your viewpoint or facts.
 
Half Fast said:
OR we already had a recession in 2022 (two consecutive quarters of declining GDP). Economists and politicians tend to be pretty loose and creative about what “recession” means.

Depending on your viewpoint or facts.
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Nope, those are facts.
 
robin ardoin said:
I'm all about dollar cost averaging...but...holding some cash to take advantage of obvious buying opportunities is wise.
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Sounds like no such "obvious" opportunities exist.
robin ardoin said:
I was going to be in the market for a 206H at the end of the year, but a push back on the recapitalization of a major investment has that delayed by at least 6 months. With a drop in interest rates if the Fed panics (prior to the election:rolleyes:) that might be back on the table...if interest rates drop enough. However, low interest rates will likely prop up used GA aircraft prices. It never ends.....
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It's almost as if any knowledge you may have about the market is already priced in...
 
The market has certainly made a turn but I feel we are still years out from a true return to normal. Airplanes are sitting on the market longer but seems most sellers would rather die in the grave they dug than get partially out. 5-10 years ago financing an old airplane was almost unheard of so many people are probably not able to sell for what the plane would normally be worth. People still quote new engine prices as justification for the value of their 30 year old engines or the fact they are unobtanium right now. If/When the supply ever rebounds will be the point when the used market properly adjust.
 
Half Fast said:
An equestrian spouse? :biggrin:
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OK...FOUR options... ;) . The nice thing about planes is that they don't continue to burn avgas while in the hangar....unlike a horse. I thought high level road racing was expensive until I compared notes with a couple of friends that have thoroughbreds...YIKES!
 
robin ardoin said:
OK...FOUR options... ;) . The nice thing about planes is that they don't continue to burn avgas while in the hangar....unlike a horse. I thought high level road racing was expensive until I compared notes with a couple of friends that have thoroughbreds...YIKES!
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Yep.

And when the plane or race car breaks, you can wait to fix it. But when SWMBO’s Thoroughbred mare colics, it doesn’t matter that it’s Sunday and Christmas Eve and the on-call vet is an hour’s drive away, you have to get him out now. Ca-ching squared.

God never made a more efficient creature for converting money into manure as rapidly as possible.
 
Half Fast said:
They say money talks. Mine just seems to say “Goodbye.”
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Mine’s ganging up yelling “c’ya” as it jumps in a getaway vehicle and peels out.

This has been a year of really unexpected expenses, and all of them have cropped up since the beginning of May.
 
TCABM said:
Mine’s ganging up yelling “c’ya” as it jumps in a getaway vehicle and peels out.

This has been a year of really unexpected expenses, and all of them have cropped up since the beginning of May.
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Same. All house related. The plane has been good. I should probably sell the house and live in the plane.
 
Cash may be king, but cash on the sidelines that could have been invested is never a good thing - unless you like losing 4% pa. Now that doesn't mean NASDAQ aligned stocks either. RE, yellow rocks (gold haha)/commodities, type ratings - all better investments than cash.
 
Between taxes, power, and insurance cost my monthly expenses have gone up by almost $400.00. That doesn't account for increased food cost, gas, and entertainment expenses. Add to that you need to be setting aside more for repair/replacement cost of non aviation related expenses as well as adjust your budget for increasing annual cost and aircraft maintenance items. To add insult to injury because my company didn't meet profit expectations our raises were smaller than normal. So I am basically $800 per month poorer now at least than 1-2 years ago.
 
kaiser said:
Cash may be king, but cash on the sidelines that could have been invested is never a good thing - unless you like losing 4% pa. Now that doesn't mean NASDAQ aligned stocks either. RE, yellow rocks (gold haha)/commodities, type ratings - all better investments than cash.
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Corn futures. You should buy corn futures.
 
Grum.Man said:
Between taxes, power, and insurance cost my monthly expenses have gone up by almost $400.00. That doesn't account for increased food cost, gas, and entertainment expenses. Add to that you need to be setting aside more for repair/replacement cost of non aviation related expenses as well as adjust your budget for increasing annual cost and aircraft maintenance items. To add insult to injury because my company didn't meet profit expectations our raises were smaller than normal. So I am basically $800 per month poorer now at least than 1-2 years ago.
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good times.
 
Jim K said:
Corn futures. You should buy corn futures.
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:yeahthat:


670f72_dea22688660d437e8586c468eb51dd7f~mv2.jpg
 
kaiser said:
Cash may be king, but cash on the sidelines that could have been invested is never a good thing - unless you like losing 4% pa. Now that doesn't mean NASDAQ aligned stocks either. RE, yellow rocks (gold haha)/commodities, type ratings - all better investments than cash.
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4 week t-bills have been paying a little over 5%. Not going to make you rich, but better than the mattress.
 
Coincidentally, this market correction is at the same time while the Brazil, Russia, India, China and South Africa - Central Bank Digital Currency ( BRICS CBDC ) is being initiated.
Maybe it's time to exchange USD for BRICS. The U.S. CBDC is still a couple years out.


www.coingecko.com

BRICS to USD: BRICS Chain Price in US Dollar | CoinGecko

Get live charts for BRICS to USD. Convert BRICS Chain (BRICS) to US Dollar (USD).
www.coingecko.com www.coingecko.com
 
My finance manager encouraging me to convert 20% of my securities portfolio into precious metals (goal of playing one against the other with goal of gold accumulation) makes him look like a genius today.
 
Zeldman said:
I converted a lot of my gold into lead almost 4 years ago...
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I've been converting a lot of my hard earned gold into lead in copper containment vessels and throwing it away at paper with circles on it 600 and 1000yds away. About to fly up to Wisconsin and do the same for about 5 days near Lodi at the long range nationals. Hell, the price of nitrocellulose is worse than the projectiles these post COVID/Uncle Joe days.
 
Grum.Man said:
The market has certainly made a turn but I feel we are still years out from a true return to normal. Airplanes are sitting on the market longer but seems most sellers would rather die in the grave they dug than get partially out. 5-10 years ago financing an old airplane was almost unheard of so many people are probably not able to sell for what the plane would normally be worth. People still quote new engine prices as justification for the value of their 30 year old engines or the fact they are unobtanium right now. If/When the supply ever rebounds will be the point when the used market properly adjust.
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Yup, on the FB RV marketplace I follow, there continues to be an increase in listings, as well as an increase in "finance fell through" re-lists. Latter which is music to my ears, as it actually affords true price discovery in this so-called market. To wit, pricing on a few units are already at my call price (on taildraggers unfortunately, not quite for trikes which are my target).

I do still see the dynamic you highlight, that whole dying on the hill rather than sell at the price people with actual money in their pockets are willing to offer. However, organic-event sales (divorce, medical out, the latest one is the "wife wants a second kid via IVF, gotta sell", that's a first one in my time lurking that board) are increasing. So has the public collective grimmace of the cost of living pressures you echo in your later post tbh.

Your comments about engine pricing is also spot on. I've already remarked engine pricing is the death knell of this hobby, as the aged out airframes no longer support it. It reminds me of the gear bits kerfuffle with the 172/82RGs/Pa28rs. A pricing model indexed for revenue cost shifting, doesn't pencil for rec use.

I seem to be the only dodo bird back in 2023 willing to touch grass and move the thing. No way I would have been able to sink a refreshed engine in 2025 dollars (earliest I would have got the thing bolted back on in all reality) on that old thing, and turn around and sell for parity. I was able to price appropriately and moved it in 20 days (offered 60 days of free hangaring on the deal in order to allow the out of town buyer to secure the logistics of eventual trailering at his convenience, as it had no working engine). Only lost 10 AMUs over 580 hours of use (13amu inflation adjusted). I took it happily, cheapest exclusive-use lease ever.
 
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