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Are Collectibles in a Bubble?

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Welcome to Episode #47 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by David Bartosiak, editor of the Home Run Investor and the Momentum Trader, to discuss two of David’s favorite topics: cars and sneakers.

The collectible market for both has been on fire for the last 5 years, with prices and sales hitting new highs.

But have things gotten too bubblicious?

Classic Car Prices Soar

In the classic car market, the upper end of sales is still humming along.

At the recent Pebble Beach Concours d’Elegance in California, which has been selling classic cars since 1950, a 1955 Jaguar D-Type Roadster sold for $21.8 million. It was the most expensive British car to ever sell at auction.

7 other cars also sold at auction for over $10 million.

But in the lower collectible range, sales have slowed. Some market players say buyers are spooked by the upcoming US election uncertainty and the growing worries over the global economy.

As a stock investor, how do you play the classic car craze?

Sotheby’s has been involved in car auctions for decades. Meanwhile, Ferrari (RACE - Free Report) now trades publicly on the exchange. Ferraris make up the bulk of the most expensive car sales ever. 9 out of the 10 highest prices ever paid for an automobile have been Ferraris.

Additionally, it’s easier than ever to check the prices on these rare car offerings. Both TrueCar and Amazon Vehicles (AMZN - Free Report) have websites that will allow you to track prices and provide specs and videos.

Everyone Is Re-Selling Sneakers: Uh-oh

Rare sneakers are nothing new. Jordans have been around for over 30 years.

But there has been an explosion in new websites selling sneakers online from the Eminem-backed StockX in Detroit, which launched in February 2016, to GOAT out of Venice, California which lets you sell your sneakers via their app.

Tracey and David discuss the speculation in the sneaker market. Recently Adidas’ Yeezy 350 for infants sold out and they are now being re-sold on the various sneaker websites.

It all seems so easy to make money. Is the sneaker market flashing a danger sign?

If you want to invest in sneakers, the main players remain the same as always: Adidas (ADDYY - Free Report) , which is expected to grow its earnings by 30% this year, and Nike (NKE - Free Report) , forecast to increase earnings by another 10.8% this fiscal year.

Under Armour isn’t a player in the sneaker collectible market yet because it’s too new.

Want to know more about the entire sneaker market and how to invest in it?

Tracey and Dave covered this in a previous podcast, including digging into Under Armour and Skechers. Check it out below.

Are collectible cars and sneakers in a bubble?

Tune into this week’s podcast to find out.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.


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