1% (was Re: Looking for info - En-link Ethernet card for the Apple II)

From: Ethan Dicks <ethan_dicks_at_yahoo.com>
Date: Wed Jun 27 15:11:25 2001

--- Eric Chomko <chomko_at_greenbelt.com> wrote:
> Ethan Dicks wrote:
> > > > ...the 1% rule - ten years later, you can get a computer for 1% of its
> > > > original purchase price.
> Well I suspect that the 1% rule means that a system is a) not rare, and b)
> totally obsolete in the sense that all its functionality can be had in newer
> machines (more at superset).

As I disclaimed, this does not account for the collector value of certain
computers, especially as you get far beyond 10 years. A 10-year-old
computer hits 1%; a 25-year-old computer is frequently worth more than it
was at 10 years, but not necessarily more than it was when it was new.

> I'm trying to think of a coin collecting equivalent and can only think of
> coins sold by the pound (weight). Many coin dealers actually buy foreign
> coins that way.

Debased currency aside, I would think that a coin that is legible is never
worth less than face value, or 100%. Money that has been removed from
circulation (British Pound notes, for example) is no longer currency, and
could be considered to be "no longer functioning". A bundle of cotton rag
paper with colored printing on it is worth an infintessimal fraction of the
same weight in $100 bills.

> I was think that ISA cards could trade that way (weight).

These days, probably. Weigh the gold for an approximate max scrap value.
Maybe the tantalum, too.

> > This rule seperates computers from other forms of manufactured goods
> > because they are rarely worth 1% or less while still functioning. Think
> of a car.
> No, actually a car IS a good example. What is the value (scrap) of a cubed
> car?

*Functioning* A cubed computer isn't worth much more than a cubed car.
I said functioning for a reason. Scrap value changes everything. That puts
you into the realms of commodities trading and it doesn't matter what did
when it was new; only what its made of.

> 'Still running' does make a difference. And 'still running' computers
> obviously are worth more than scrap, IMO. But it seems that many of them
> (still running computers) do get scrapped.

Still running cars, too, just not as freely. That's my point. An old car
retains more value than an old computer, even if they still perform their
jobs recognizably well. If I walk onto a used car lot and offer a dealer
1% of the original purchase price, I'm likely to get a rude response. If
I offer 1% of a 10-year-old computer's price to someone, in the majority of
cases, I will be asked how large my truck is and how soon can I back it up.

Of course one thing that sucks about this is that property tax depreciation
schedules do not allow for that amount of depreciation. Some manufacturing
equipment can only be depreciated to 30% of purchase price. We used to
pay more in taxes on 11/750s and 11/730s than we could buy them for, but
it would have been too much hassle to replace them in a legal manner with
identical stuff, but bought more recently at prevailing rates.


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Received on Wed Jun 27 2001 - 15:11:25 BST

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