QUOTE(Tom_T @ Jul 7 2017, 03:53 PM)
QUOTE(mepstein @ Jul 7 2017, 03:19 PM)
QUOTE(Tom_T @ Jul 7 2017, 03:02 PM)
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IIRC they were intended to be priced higher than the $12-14K noted above - at $16000 in 1973 dollars, which was maybe around $250,000 today with inflation - which would be a hard sell for a top dog Boxster/Cayman even today.
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Tom
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$16,000 in '73 would be about $91,000 today
*dollar times inflation calculator.
I stand corrected: $93,597.70 using the calculator below
http://www.in2013dollars.com/1972-dollars-...17?amount=16000 ... or $95,422.21 using the compounded actual inflation rates (not CPI Factor), with the 1.10% estimated rate for 2016 & 2% for 2017.
But then, that's assuming you accept the Fed's stated rates & CPI, which are known to significantly understate the true rate of inflation, in order to curb CPI based labor & government benefit costs.
Most economists whom I know & under whom I studied for my MBA in Urban Land Economics feel that the actual rate of price increases is more like double or more of what is stated, resulting is an actual value "thumbnail" erosion factor of 1/2 per decade - or double the price per decade +/-.
This is partly due to things like surreptitious price increases sneaking by the CPI price checkers, when a product is introduced in a new smaller size for almost as much money, then later the larger & lower cost per unit priced one is withdrawn. A good example is what we used to pay for a 1/2 gallon of ice cream last decade vs. the now common 1.5 quart size - the change to which was an effective 25% increase in that year at that point alone.
Another damping factor is items which are held out of inflation calculations because they're said to be "too volatile" (translation: would make real inflation much higher) - such as oil & gasoline prices. Using my SoCal gas prices as an example - my local best price (not average nor highest price) for Regular ran $1.00/gal+/- in 1999-2000, then ran up to $4.00-5.00/gal+/- by 2005-06, & is now about $3.00-3.50/gal+/- today - making 400-500% over 6 years & 300-350% over all 17 years - & certainly NOT 1-3% per year!
Multiply that by millions of other products, & your dollar has devalued by far more than the stated "official" CPI or inflation rate.
Y'all can think of that the next time you ask for a raise!
So I used my thumbnail of about doubling every decade, compounded for the $250K+/-.
I sincerely doubt that they could produce & sell a 916 today - with Porsche's typical profit margin - for only $95K+/-. JMHO!
Tom
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Is CPI accurate?
Here's a Forbes article on the problem:
https://www.forbes.com/sites/perianneboring...i/#23c48fc7200b ADD: another from Mises Inst.:
https://mises.org/library/whats-wrong-cpi ... & another from Investopedia:
http://www.investopedia.com/articles/07/co...rpriceindex.aspOf course there are arguments on both sides, so you all choose what you want to use ....
.... either the +/- 1-2% average inflation CPI based estimate of $90-95,000 ...
... or the contrarian estimate of roughly doubling each decade for say $200-250,000
> price x 2/10 years x each decade ~ or average about 7.2% annually, & ranging from about 3-12% per year, but you can't compound that annually for the same result of the easy to do in your head "2x every decade" compounding) ....
... or somewhere in between 1-2% & +/- 7% annually.
As someone trained in economics & real estate economics, I veer toward the 7.2% or doubling every decade - & that has proven to be pretty accurate for our long term projections of real estate development, construction, operational & management costs over the 20 year horizons on which we typically project, for the past almost 50 years that I've been in the RE/Construction/Design/Development business.
So you all can choose what you want to believe inflation has really been over the past 45+/- years - 1-2% or about 7%.
Tom
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