General Investing and Economics Discussion - No Politics

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RonJohn said:
I read that wholesale used car prices have declined for two or three weeks in a row. You could probably sell it now and buy another one in a year for 50-60% less than what you sell it for.
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Yep. This clown show will end badly, they always do. Hang on to your wallets, because that’s the next step that always follows - “those evil X who forced me to spend money I did not have on something I did not need. I know I bragged about it at the time, but they duped me.”
 
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Ramblin Wreckt said:
I have one that I bought new in 2018 that I know I could sell for more now. But I love it, will drive it into the ground!
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OK. We all know a kid. I know a kid you bought an old pickup truck when he was 17 and started collecting side of the road junk. When he retired he had the largest antique store in Orlando Florida. I was happy for him and every other kid who makes it work. But that is not the normal.
 
Northeast Stinger

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I once bought a pickup truck for $500. It was in really bad shape but I needed to haul some wood. It caught on fire and burned to a hulk. Insurance gave me blue book value which was $2000. So I made $1500.

Stories like this are fun but you don’t build a life on them.
 
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Northeast Stinger said:
I once bought a pickup truck for $500. It was in really bad shape but I needed to haul some wood. It caught on fire and burned to a hulk. Insurance gave me blue book value which was $2000. So I made $1500.

Stories like this are fun but you don’t build a life on them.
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This year is an aberration. Some understand it, and will make some short term money. Others will think it's the new normal, and will probably leverage themselves to buy cars to make money...and will be left holding the bag on assets that are worth a lot less than the loans they took out to buy them. The merry go round eventually stops...and it gets REALLY ugly when it comes to depreciating assets like cars. At least with Real Estate in 2008 crash you knew they weren't making more land, and eventually it would catch back up. If you had cash to weather the 5-8 years it took to rebound, you're doing quite well today.

On a side note, I thought briefly about buying a 22ft bay boat in 2018 for $38K (Sea Pro with 200hp Suzuki, and fully decked out). That boat today would cost me $65-75K. If you think cars prices are ridiculous, look at what's going on with boats.
 

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Fed came out today with the latest guidance on its ongoing $1.5T/year fiscal stimulus (buying back our own govt bonds, corporate bonds, mortgages, etc. with printed money). They said inflation and employment have gotten to the point that tapering this program is now on its radar, but made no statement about if it would happen anytime soon. IMHO the time to taper gradually and raise interest rates gradually to allow for a softer change is way way behind us and now we're committed to the rocket ship.

While researching their comments from today to see what they were, I stumbled on this from the Atlanta Fed. I don't really know what to make of it, but I found it interesting that they've cut their GDP growth estimates (green line below) down 8% absolute value (14% to 6%) in just the last 2 months. Perhaps that's why the Fed is taking their posture - they still view this rocket ship as temporary and growth will slow appreciably in the coming months.

gdpnow-forecast-evolution.gif


The Fed has accumulated $4T worth of assets on its balance sheet from all this buying.
www.federalreserve.gov

Recent balance sheet trends

The Federal Reserve Board of Governors in Washington DC.
www.federalreserve.gov
 

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Huge miss on GDP today. Of particular interest is that green line above - the Atlanta Fed hit it exactly, and the trend over the last 3 months landed in the right spot. Probably why they're still injecting massive amounts of money into the economy - their internal projections must be that the economy is slowing substantially.
 

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SnidelyWhiplash said:
Huge miss on GDP today. Of particular interest is that green line above - the Atlanta Fed hit it exactly, and the trend over the last 3 months landed in the right spot. Probably why they're still injecting massive amounts of money into the economy - their internal projections must be that the economy is slowing substantially.
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Supply chain issues are effecting a LOT of companies and limiting their ability to react to their specific demands. I know a few that are actually seeing a drop in revenue because they cant get the chips they need to make their products. They have orders but cant deliver
 
Northeast Stinger

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MountainBuzzMan said:
Supply chain issues are effecting a LOT of companies and limiting their ability to react to their specific demands. I know a few that are actually seeing a drop in revenue because they cant get the chips they need to make their products. They have orders but cant deliver
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Spot on.

Also starting to see odd shortages in grocery store due to supply chain issues.
 

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Some very interesting housing numbers just came in today. Existing pending home sales dropped 5% sequentially month over month and that number is also down 5% year over year. And new construction home sales are down 20%. (!)
 
RonJohn

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SnidelyWhiplash said:
Some very interesting housing numbers just came in today. Existing pending home sales dropped 5% sequentially month over month and that number is also down 5% year over year. And new construction home sales are down 20%. (!)
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Looks like you sold your house at the right time.
 

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www.marketwatch.com

Nikola electric-truck prototypes were powered by hidden wall sockets, towed into position and rolled down hills, prosecutors say

Prosecutors said the prototypes didn’t function and were Frankenstein monsters cobbled together from parts from other vehicles.
www.marketwatch.com www.marketwatch.com

Fascinating read on Nikola - kind of the wanna-be-Tesla of Big Trucks. But here's what I find especially fascinating - the whole thing has now been exposed as a ruse and the stock has tanked. BUT, despite the fact their company is a ruse, they haven't sold a single truck and have zero revenue, the company is still worth $5 Billion based on the current stock price and market cap. That's just incredibly hilariously pitiful.
 
RonJohn

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SnidelyWhiplash said:
www.marketwatch.com

Nikola electric-truck prototypes were powered by hidden wall sockets, towed into position and rolled down hills, prosecutors say

Prosecutors said the prototypes didn’t function and were Frankenstein monsters cobbled together from parts from other vehicles.
www.marketwatch.com www.marketwatch.com

Fascinating read on Nikola - kind of the wanna-be-Tesla of Big Trucks. But here's what I find especially fascinating - the whole thing has now been exposed as a ruse and the stock has tanked. BUT, despite the fact their company is a ruse, they haven't sold a single truck and have zero revenue, the company is still worth $5 Billion based on the current stock price and market cap. That's just incredibly hilariously pitiful.
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Does the article go into how many outstanding shares there are not in the hands of insiders? I don't really trust market caps in situations like that. The market cap can be inflated by relatively few people (few thousands, few hundreds?) trading at inflated prices. If the founders/venture capitalists/etc. started selling off their shares, which I assume are the great majority of shares, then the market cap would likely tank very quickly.
 

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RonJohn said:
Does the article go into how many outstanding shares there are not in the hands of insiders? I don't really trust market caps in situations like that. The market cap can be inflated by relatively few people (few thousands, few hundreds?) trading at inflated prices. If the founders/venture capitalists/etc. started selling off their shares, which I assume are the great majority of shares, then the market cap would likely tank very quickly.
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According to this: https://finance.yahoo.com/quote/NKLA/holders?p=NKLA about half the shares are owned by insiders.

So take a look at all the funds that own shares and make sure you're not investing with them. Who would own shares in a company with no revenue in the first place? LOL. They've been public for well over a year and are 7 years into development and still have nothing to show for it.

LOL: Article about insane valuation based on nothing

Article on investigation and GM backing away
This investigation has been ongoing for a long time. Several several months ago folks like GM backed away from doing deals with them. Yet still these funds own millions and millions of shares???
 
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