Tag Archives: Rich

“Tail-End Of A Big Bull Market” – Wine, Diamonds, Classic Cars Are Now Money-Losing Investments For The Ultra-Rich

Luxury assets of the ultra-wealthy, if that were expensive wine, fancy diamonds, and rare antique cars all had a down year as the stock market ramped to new highs, reported The Wall Street Journal.

In the last decade, luxury assets performed exceptionally well as central bankers handed out free money to the elite class to hoard assets of their liking. And naturally, these people, with exceptional taste, bought things that the common man has only seen on television.

Now, these luxury assets are under performing – have been during the past several years – and is a symptom of late-cycle distress.

“The froth has gone out of the market. People have realized you can’t just buy stuff and expect the value to go up,” said Andrew Shirley, a partner at Knight Frank and editor of the group’s Wealth Report.

The Journal blames the under performance on the global slowdown and the lack of Asian demand. Chinese buyers account for 33% of global luxury goods sales.

“There is a lot of uncertainty in Chinese markets and the riots in Hong Kong didn’t make it easy for people to come spend money in Hong Kong either,” said Eden Rachminov, chairman of the board at the Fancy Color Research Foundation.

Colored diamonds in 2019 lost about 1% in the first three quarters.

Fine wine was also another losing asset through Nov., lost 3.6%, according to the Liv-ex 1000 index.

And the biggest loser on the year were classic cars, lost 5.6%, according to Historic Automobile Group International’s (HAGI) Top Index.

HAGI founder Dietrich Hatlapa said the classic car market has been cooling following a massive rise in price after the 2008-09 financial crisis. He said classic car prices saw double-digit gains after the recession, rallying 50% Y/Y through 2013. “We are at the tail-end of a big bull market,” Hatlapa warned.

What’s becoming evident is that ‘Not QE’ and other monetary gimmicks deployed by central banks are failing to raise asset prices of some luxury goods in 2019. Perhaps the world is stumbling into a period where tool kits of central banks are becoming less responsive to stimulate asset price inflation, and if that is the case, then everyone will figure out that prices of luxury goods have been hyper inflated over the last decade with nothing but hot air.

Source: ZeroHedge

Most People Can Tell If You’re Rich Just By Looking At Your Face

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A new study published in the Journal of Personality and Social Psychology posits there’s a good chance you can tell if someone is rich or poor just by looking at them.

“The relationship between well-being and social class has been demonstrated by previous research,” R. Thora Bjornsdottir, a graduate student at the University of Toronto and co-author of the study, tells CNBC Make It. In general, people with money tend to live happier, less anxious lives compared to those struggling to make ends meet. She and her team demonstrated “that these well-being differences are actually reflected in people’s faces.”

Bjornsdottir and her co-author, psychology professor Nicholas O. Rule, had undergraduate subjects of various ethnicities look at gray-scale photographs of 80 white males and 80 white females. None showed any tattoos or piercings. Half of the photos were of people who made over $150,000 a year, which they designated as upper class, and the other half were people who made under $35,000, or working class.

When the subjects were asked to guess the class of the people in the photos, they did so correctly 68 percent of the time, significantly higher than random chance.

“I didn’t think the effects would be quite as strong, especially given how subtle the differences are” in the faces, Rule told The Cut. “That’s the most surprising part of the study to me.”

“People are not really aware of what cues they are using when they make these judgments,” Bjornsdottir told the University of Toronto. “If you ask them why, they don’t know. They are not aware of how they are doing this.”

But the researchers wanted to know, so they zoomed in on facial features. They found that subjects were still able to guess correctly when they just looked at the eyes, and the mouth was an even better clue. But neither isolated part was as a reliable an indicator as the whole face.

The effect is “likely due to emotion patterns becoming etched into their faces over time,” says Bjornsdottir. The chronic contraction of certain muscles can actually lead to changes in the structure of your face that others can pick up on, even if they aren’t aware of it.

When the researchers showed the undergrads photos of people looking visibly happy, they could not discern socioeconomic status any better than chance. The expressions needed to be neutral for the subtle cues to have an effect.

“Well-being differences are actually reflected in people’s faces.”

“Over time, your face comes to permanently reflect and reveal your experiences,” Rule told the University of Toronto. “Even when we think we’re not expressing something, relics of those emotions are still there.”

Finally, to show how these kinds of first impressions could come into play in the real world, they asked the undergrads to decide who in the photos would be most likely to land a job as an accountant. More often than not, they went with people from the upper class, showing how these kinds of snap judgment can create and reinforce biases.

“Face-based perceptions of social class may have important downstream consequences,” they concluded.

“People talk about the cycle of poverty,” Rule said, “and this is potentially one contributor to that.”

Source: Jonathan Blumberg | CNBC