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29/05/20185 mins

Back to the future

Would you buy a used (or even new) car from this man?

After a high-flying early career, he founds his own car company. He has a brilliant new concept in automotive engineering and wants to revolutionise the production of the car.

But he soon runs into production problems. These arise from an inexperienced workforce and poor planning. As a result, he is unable to meet his customers’ expectations.

Nevertheless, he has numerous celebrity investors and endorsements. And his car features prominently in several films.

But despite all this positive publicity, he remains a bit of an outsider in corporate America and falls out with investors after over-promising. He also takes deposits from customers for a new model that is never delivered.

Meanwhile, he has a turbulent private life. This includes a notorious involvement with drugs and numerous marriages.

Yes, we’re talking about John DeLorean.

The DeLorean example teaches us to be wary of businessmen who overpromise and underdeliver. And it also reminds us that not everything hailed as a technological breakthrough lives up to expectations. For all the fanfare at its inception, the DeLorean Motor Company went bust after just six years, in 1981.

In that year, the DeLorean DMC-12 cost $25,000. Today, mint examples sell for over twice that. Not bad, but you could have made more money investing in the stockmarket.

Readers should be aware that, the value of all stockmarket investments (and cars) can go down as well as up. Past performance is no guide to the future.

If only we had a time machine, now where’s that car…

 

Please remember that past performance may not be repeated and is not a guide for future performance. The value of shares and the income from them can go down as well as up as a result of market and currency fluctuations. You may not get back the amount you invest.

Please note that SIT Savings Ltd is not authorised to provide advice to individual investors and nothing in this promotion should be considered to be or relied upon as constituting investment advice. If you are unsure about the suitability of an investment, you should contact your financial advisor.

Subscribe to our newsletter

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We respect your privacy and do not sell, rent or loan any information collected on this site and your data will not be used in ways to which you have not consented.

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