Investing in “uniqueness”: where the risk lies

Some assets are bought for income, others for status. But there is a rare category of assets that people buy for the feeling of becoming part of history.

In the high-performance and luxury car segment, the rules are different. The number of wealthy buyers globally is growing. And while the mass market stagnates, the top price tiers continue to expand at rates of 8–14% per year. Margins here are often measured not in single digits, but in tens of percent.

According to McKinsey, the global collectible car market is already valued at around €800 billion, with annual transaction volumes reaching €45 billion. A car is not just a means of transportation – it is an asset with both emotional and investment appeal.

One of the most illustrative companies in this space operates almost by the textbook. Revenue grows moderately – around 7% per year, operating margins approach 30%, and cash flow grows faster than earnings. At the same time, the number of units produced barely increases.

This may seem unusual for the automotive industry, but it makes perfect sense for a business that sells not transportation, but limited access. The company deliberately produces fewer units than it could sell. The waiting list stretches years ahead. Personalization is a key driver of success.

It feels as though it’s hard to go wrong

For investors, stories like this are particularly appealing. It feels as though it’s hard to go wrong here. And yet, this is precisely where mistakes are most often made. Such businesses are typically bought at the peak of confidence.

The investor pays not only for the business, but also for expectations that are already reflected in the price. As a result, even a high-quality business can lead to mediocre returns. Simply because the entry price was too high.

Growth within this model is clearly not infinite. The recent market reaction to more cautious long-term guidance showed how quickly expectations can be revised, even if the underlying business has barely changed.

A question that cannot be answered “in general”

This is where the real challenge arises, one that investors often face alone. Not determining whether the business is good but understanding the price being paid for that “uniqueness,” the role such an asset should play within a broader portfolio, and the risks being taken – often without fully realizing them.

These are far less obvious questions.

Good business does not always mean a good investment.

And the difference between the two is rarely obvious in the moment – especially when the price already includes a sense of uniqueness.