docmirror
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Cowboy - yeehah!
Sorry man. I'll shut up now.
No worries. You get it. Some others are just trying to pick the last nit off this mangy dawg.
Underpriced planes...
- Thread starter jfrye01
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No worries. You get it. Some others are just trying to pick the last nit off this mangy dawg.
JHW
En-Route
sort of. You can certainly get a nicer cherokee than a 172 for even money. The 172 commands a higher price because it has a usable back seat for people who have feet. Again, the market assigns value based on broad demand. If you don't care about back seat room then yes, a PA28 is a "bargain" compared to a cessna.
JoseCuervo
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JoseCuervo
When you started drifting into market "systems" and socialism, made me think you were no longer participating in this discussion.I think I do but you may be right.
Not sure the purpose of trying to shut down discussion on a discussion forum.Oh, I get it. Smart move.
What was the purpose of your comments on socialist (or socialism) or such?
BOOYAH! RIGHT THERE! <cue Rocky theme song>
Did I call it or what?! That's where you started adding your own external conditions to the example given. Boom
Yeah, as that really changed the discussion. Do you honestly think TWO campus bookstores selling at the $77 MSRP would affect the discussion? What about THREE campus bookstores selling at $77 MSRP? 5 Bazillion campus bookstores selling at $77 MSRP???
Yeah, those "external conditions" really affected the discussion of somebody paying $90 for a book that was selling for $77, and, could likely only be re-sold for substantially less than $77 (as the book is now used.)
To look at it another way, the Bid and Ask on the book is now Bid=$50 Ask=$90. That is a HUGE spread and is not a symptom of an efficient market.
That is kind of a very good measure of market efficiency. If you can't sell the textbook, then there is not a market. At what price, on the campus that the one poster was teaching, do you think the next price that textbook sells at?
Have you bought books? Did you feel the pricing was efficient? Did you feel the market was efficient?
Since you have more experience making up novel theories and terms, what term would you prefer to use when discussing the inefficient pricing and markets that Cuban and Bezos are trying to exploit? They aren't out there trying to exploit commodity markets for soybeans or corn.
Do you think there is a market for textbooks at $90 per book, when the MSRP is $77, and used books sell for a discount to the $77? I would argue there really isn't a market for books at $90, and only because the actions of one party (the professor who can't remember to bring a book to class after assigning the book to the class) caused a VERY inefficient transaction to takeplace. It may still take place, but it wasn't a "fair" transaction.
We all see people pay too much for Airplanes (or other assets) or "steal" them at a bargain price. Those transactions likely are not reflective of an efficient market, but, more likely, attributable to an inefficient market where one party did not have all the information required to make a rational decision/action.
Discussion forums are for discussion-ing....
nddons
Touchdown! Greaser!
Man, you guys sure know how to turn a good airplane discussion into a boring economics lecture. You must be a blast in the bars. 
JoseCuervo
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JoseCuervo
Man, you guys sure know how to turn a good airplane discussion into a boring economics lecture. You must be a blast in the bars.
It goes back to airplanes every once in awhile.
What planes do you think are "underpriced"? Would you ever own one?
nddons
Touchdown! Greaser!
Yes, I'm desirous of owning an aircraft within the next couple of years. I've been looking at a Commander. As a potential buyer, I don't think any planes are underpriced.
Certainly 182s never seem underpriced. Actually some older Bonanzas seem like good deals, but I am unable to judge whether that's underpriced or not.
Denial without reasoned rebuttal has no value. It's completely true in our system of economics.
JohnF
Pre-Flight
Socialism is more than political system in that it claims the economic system of its society. My comment is not to take on the whole of socialism but to point out that the socialist market system seriously inhibits its probability of being an efficient market system because it does not have price.
My reasoning was that you would pick up that market efficiency is a way of comparing market systems by determining how economically efficient they perform.
Market efficiency is not a measure of how quick transactions happen but a measure of how well an economy finds the best utility with its resources. So, economic efficiency answers questions like: How can we know we should produce wheat instead of cotton and how much of that wheat should go to making bread or beer. How is it that we have cobblers and pub owners and farmers. Rome gets fed.
Not sure the purpose of trying to shut down discussion on a discussion forum.
I wouldn't shut down a good discussion. I am a born arguer. It's one way that I learn from the experience of others.
The comment isn't about shutting the discussion down. It's about a discussion having become mired in obstinance.
Docmirror's classroom example was a tightly closed example of a very small exchange to show how price moves a resource to a higher utility. It was done in real time using a classroom resource that had a perceived value in the class. The price struck doesn't seem to make sense, but it does, and in ways that are very relevant in an economics discussion. It isn't the price that landed that is important but what price did that matters.
No it's not but I do understand what you are talking about. I do understand your question.
Let me leave you with this: Economics does not care about effort. Effort is a choice and will land in the cost column of a transaction.
Making it easier for a buyer to find a seller or a seller to find a buyer (what you are referring to as efficiency) is an economic good and not an economic mechanism. The NYSE is a service, not an economic system. Whenever these kinds of services pop up it is to reduce the transaction costs enough that consumers prefer the good in question over the goods they have to give up. How well that service does what it sets out to do, that is, its internal efficiency, is not a concern of economics. To muddy this a bit more for you, that price competition will push service competition to become ever more efficient (from their perspective/internally) is a subject of economics.
I am 51 and I still buy textbooks for the kid that is me. I learned what I believe about market efficiency by reading these textbooks and discussing the ideas with other, such as yourself.
<sigh>
Point taken.
Man, you guys sure know how to turn a good airplane discussion into a boring economics lecture. You must be a blast in the bars.
Well dang. I didn't think it got good until the economics popped up...
Yes, I'm desirous of owning an aircraft within the next couple of years. I've been looking at a Commander. As a potential buyer, I don't think any planes are underpriced.
Actually some older Bonanzas seem like good deals, but I am unable to judge whether that's underpriced or not.
This is really a comment about your value scale and not price. (I mean, if you find any meaning in the crap I've been spouting.)
It's an assertion; I have and cannot deny anything.
I assert that your premise is false. Economics is no more about money than it is about shoestrings or potatoes or shoestring potatoes. Love is not an economic term or concept.
schmookeeg
En-Route
This thread is hilarious. I tried to sell an airplane myself exactly ONE time.
Imagine having a version of this thread's same tedious conversation with EVERY bejowled idiot who calls to discuss his flying days when he was stationed in Guam, and it was only after investing 45 minutes of "uh huh... oh rilly? wow... uh huh" to learn he lost his medical in 1992 but he was calling to learn if his long lost friend Fred McSlapnuts used to own it in the sixties?
Then the others who ask me things like whether I had magnafluxed the wheel axles to see if they're still airworthy (really), whether the propeller had ever been in Alaska (really), or whether the plane had EVER been treated with Corrosion-X, because "that stuff eats aluminum you know" (ugh, really)
This was for a 172F by the way. I was asking $22,000 at a time when everyone was asking 35, because I needed it gone to put a down payment on a new 172SP. Thankfully someone with sense showed up with a small envelope filled with 20k and the deal was done in 10 minutes.
So, no, regardless of which idol of economic pedantry you pour rum for, there's no way in hell the aircraft market is efficient. Every single plane is one-of-a-kind and every single buyer has at his command a unique combination of anecdotes, old wives tales, stories and fears, plus his very specific and exacting requirements for the perfect airplane, AND a limitless willingness to explain in detail why my plane falls short and therefore is overpriced because it will cost 12 gozillion to modify my plane to his specifications.
...and also he wants me to carry a note with nothing down over 15 years, or guarantee the engine will make TBO, or trade for an "immaculate" project bellanca viking that has been tied outside since the carter administration....
Aircraft brokers are grossly underpaid for the excrement they sift through looking for a gold nugget.
$0.02 lost to an inefficient market.
- Mike
Imagine having a version of this thread's same tedious conversation with EVERY bejowled idiot who calls to discuss his flying days when he was stationed in Guam, and it was only after investing 45 minutes of "uh huh... oh rilly? wow... uh huh" to learn he lost his medical in 1992 but he was calling to learn if his long lost friend Fred McSlapnuts used to own it in the sixties?
Then the others who ask me things like whether I had magnafluxed the wheel axles to see if they're still airworthy (really), whether the propeller had ever been in Alaska (really), or whether the plane had EVER been treated with Corrosion-X, because "that stuff eats aluminum you know" (ugh, really)
This was for a 172F by the way. I was asking $22,000 at a time when everyone was asking 35, because I needed it gone to put a down payment on a new 172SP. Thankfully someone with sense showed up with a small envelope filled with 20k and the deal was done in 10 minutes.
So, no, regardless of which idol of economic pedantry you pour rum for, there's no way in hell the aircraft market is efficient. Every single plane is one-of-a-kind and every single buyer has at his command a unique combination of anecdotes, old wives tales, stories and fears, plus his very specific and exacting requirements for the perfect airplane, AND a limitless willingness to explain in detail why my plane falls short and therefore is overpriced because it will cost 12 gozillion to modify my plane to his specifications.
...and also he wants me to carry a note with nothing down over 15 years, or guarantee the engine will make TBO, or trade for an "immaculate" project bellanca viking that has been tied outside since the carter administration....
Aircraft brokers are grossly underpaid for the excrement they sift through looking for a gold nugget.
$0.02 lost to an inefficient market.
- Mike
Neal Howard
Cleared for Takeoff
I sold the same airplane twice. Broke even both times. It is a Cherokee 140 and I put nearly 900 hours on it during the two times I owned it.
Over and growing population combined with limited resource prevents an efficient market period, no matter what economic policy you set. It's all a bit of a fallacy since the 'efficiency' is all about how much money we can make with the resource rather than how much benefit can be achieved with it.
We value the wrong things, ant it is destroying humanity.
We value the wrong things, ant it is destroying humanity.
jhausch
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jhausch
Boy oh boy do I regret using the term "efficient market".
Allow me to restate my opinion of aircraft pricing as being "directly related to support network (formal or informal) and inversely related to operating costs"
IOW cheap airplanes have little support or a small amount of hard to access tribal knowledge and/or are expensive to operate.
Allow me to restate my opinion of aircraft pricing as being "directly related to support network (formal or informal) and inversely related to operating costs"
IOW cheap airplanes have little support or a small amount of hard to access tribal knowledge and/or are expensive to operate.
JoseCuervo
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JoseCuervo
Yes, I'm desirous of owning an aircraft within the next couple of years. I've been looking at a Commander. As a potential buyer, I don't think any planes are underpriced.
Actually some older Bonanzas seem like good deals, but I am unable to judge whether that's underpriced or not.
Narrow in on the range of 182's you would consider (or any model), and start chasing all of them, you will find some are OVERPRICED ("I paid$110,000 for it in 2007 and put a new radio in it, it must be worth $120k"), others that are FAIRLY priced (lots of utility and life left in the engine, paint, interior, and/or fairly discounted for condition/time), and then some are UNDERPRICED ("I need to sell it, it is just a hole for money as I don't fly it and insurance/annuals/etc.. are killing me").
As a Buyer, once you chase all the planes in the year/model/vintage you are looking at, you soon start to understand the market and how inefficient it is. You can quickly toss out the overpriced, and then settle on fairly priced, and, if possible, stumble across an underpriced before someone else does.
There are certain planes out there in the age I purchased that have been on Trade-a-Plane and Barnstormers for more than a year. I can assure you, they are OVERPRICED.
The market for specific models of piston planes is very inefficient, sellers have way too much emotion, in my opinion, and buyers don't have enough information. (This likely changes as you move up to corporate aircraft where emotion leaves the equation and information is better.)
Florida Cracker
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Florida Cracker
When I think of undervalued planes, I think of planes that give so much more than they cost, like cessna 140.
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mnewb1
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M Newberry
N747JB
Final Approach
There are planes that provide a lot more bang for the buck than others, a good 421B can be bought for $150-200K, it will haul 6 people in pressurized, air conditioned comfort with radar, at 200-220 knots. But, they are not cheap to operate and maintain. I don't know that I would call them underpriced, but they do a lot for a little money upfront, compared to some others like a 414A. Same cabin, same speed, less useful load and sell for two or three times the price of a good B model!
I don't know that I would call them underpriced, but they do a lot for a little money upfront, compared to some others like a 414A. Same cabin, same speed, less useful load and sell for two or three times the price of a good B model!
retailguy
Line Up and Wait
All things equal that should take you about 11 months.
Paulie
Line Up and Wait
Not true. The only thing different is the avionics which are much more reliable than the old ones. Older planes have this thing called corrosion. Ever hear of the aging aircraft program the feds pushed?
Tell me what airframe system in any century type Cessna has become more complicated.
Paulie
Line Up and Wait
There a lot of airplanes that will continue to be desirable, because they do something others can't do, like 180's, 185's, 206's, 207's, they earn a living.
Some planes simply have no modern equivalent. Twin otter is a example.
There are planes that provide a lot more bang for the buck than others, a good 421B can be bought for $150-200K, it will haul 6 people in pressurized, air conditioned comfort with radar, at 200-220 knots. But, they are not cheap to operate and maintain.
It's the trailing link gear planes that bring the big dollars, and I really don't understand the premium level, 30% maybe, 300%?
Is there some factor I'm not understanding? Besides, don't the 414A wings have the expensive AD on them? Are they all done? The other one that confuses me is why would anyone want the high stress direct drive engine when they can have the geared one?
Jimmy cooper
En-Route
No it doesn't. Hayek does an excellent job showing how the price system allows the free market to deal with dispersed and imperfect knowledge.
I wouldn't shut up. Why be sorry? Wall Street did an excellent job of showing how " free markets police themselves" from 2001 to 2008. A total disaster. A glaring example of deregulation, it's consequences and all the hot air from those who support such none sense. Wall Street likes to privatize profits, socialize losses. Hi there mr. Fuld! How's remodeling your office at leahman coming along? Old airplanes bring much more than they are worth , and should for the most part be on the scrap heap. People today dont have the income to buy a new overpriced dull aircraft like a 172. Too many good jobs gone overseas. As for a 140 Cessna, I've owned two, both were in first class shape. One , a trophy winner was overpriced at 27000 .00 as it had the 85 hp engine recently overhauled but very underpowered. It needs at least an 0200 to perform well. Boring ride.( incidentally subprime car loans are once again out of control due to lousy regulation. It's starting all over again.)
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JohnF
Pre-Flight
Hi Jim. Anything in particular I am supposed to comment on?
Ya know, it's a crazy mixed up world. Education is your friend.
N747JB
Final Approach
It's the trailing link gear planes that bring the big dollars, and I really don't understand the premium level, 30% maybe, 300%?
It's only the first year 414A's, up to serial number 199, that have the wing spar AD, due at 7500 hours I think. I was a big believer in 414's until I flew in a 421 and bought Charlene!
if I got another one, it would be a 421.
It's only the first year 414A's, up to serial number 199, that have the wing spar AD, due at 7500 hours I think. I was a big believer in 414's until I flew in a 421 and bought Charlene!
Yeah, my first experience in cabin planes was a 421B with an old man who knew LOP and how to make TBO with them, I used to fly around with him. Got in a 414 later and could not for the life of me figure why someone would buy it rather than a 421.
The gearing gets them right into a good RPM range for gasoline. The problem with direct drive gasoline at 2500RPM is that in order to get more than .5hp/CuIn you have to run a high ICP which borderlines on detonation. You pick up the engine rpm to 3400 geared down to a slower prop, you can reduce the torque/ICP requirements greatly increasing you margin on detonation.
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TriGear28
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TriGear28
There really aren't any underpriced a/c. Buy old... Pay maint... Pay fuel... Get in the fetal position and cry like the rest of us... Wake up in the morning and go to work to pay for it all again. It doesn't go away... Like child support.
Sent from my iPhone using Tapatalk
Sent from my iPhone using Tapatalk
The subprime crash was the direct result of Clinton putting subprime into Fannie Mae and Cuomo as head of HUD pumping out NINJA loans to the poor. The Democrats converted middle class housing into a wasteland and it crashed the econ.
New Study Finds Democrats Fully to Blame for Subprime
Blaming Wallstreet and banks for that is like blaming Newton for every aircraft that falls out of the sky out of fuel.
nddons
Touchdown! Greaser!
N747JB
Final Approach
Don't worry, he'll post something else and you'll realize you don't ever want to agree with him, even if he is occasionally correct.
Who the hell do you think demanded those changes in regulations? He didn't do it because it was his idea, that's for sure. The financial industry Ponzi stripped the entire economic boom away from the people and into their pockets in one swoop. In the mean time foreign manufacturing combined with domestic consumerism had a hay day and we grew the **** out of the Chinese economy in that time and added over a billion new consumers to the global Ponzi economy. The financial industry had been looking to get rid of those rules for a long time. You seem to be under the miss impression that the POTUS controls the Financial industry, you could not have it more backwards.This all started under Eisenhower and stretches way further back to the American Revolution. It stretches all the way back to the Jewish Ghettos in Venice where the money lenders would sit on their benches, banks, and do business with Christian merchants and nobility financing business and wars because Christians were not allowed any usury at that time.
We have been having the same issues as a species for over 4000 years, we're obviously dumb as rocks.
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Florida Cracker
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Florida Cracker
Yep. Free enterprise and capitalism is the bane of human existence....After all, where would all the money come from that people have to hire you Henning to operate their obscene toys?
After all, where would all the money come from that people have to hire you Henning to operate their obscene toys?
Nö, actually it's supporting fiat currency. The world economy is based on fantasy rather than commodity, that's going to change..