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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (91328)	7/4/2002 8:00:22 PM
From: hillbillies	Respond to of 99280

Zeev- Yes I actually read this last week and posted to this thread; response was a short squeeze jest and Misheldo was kind enough to reply to me. I don't tear apart reports as you do; but my logical brain says this is a accident waiting to happen. As for zero rates coming back into affect (on certain models I read)brain said this is just a effort to get consumer back in, due to slowdown in various dealerships.

To: Zeev Hed who wrote (91328)	7/4/2002 8:20:16 PM
From: Bob Pittsfield	Read Replies (2) \| Respond to of 99280

Zeev Back in early June you were asked about stocks to play in a ramp:QLGC, EMLX and BRCM in that order, if you need more, than BRCD and GNSS. Have your thoughts changed any since then? I have been messing around with all the markets for many, many years. Never have I seen anyone who has your understanding of all of the elements that make the market and was willing to share it as you do. Thank you.

To: Zeev Hed who wrote (91328)	7/4/2002 8:52:03 PM
From: stormrider1	Read Replies (3) \| Respond to of 99280

Zeev, I am not involved in the car business, but I do work for one of the largest trucking companies in the country. I will tell you that I think that the trucking industry is a leading indicator of economic expansion, and from what I am seeing, that double-dip isn't looking like it's there yet. We are experiencing the largest increases in shipments this last month since year 2000. This may well be a blip on the screen, but I view it as an opportunity for a short-term economic expansion. Thanks for your excellent calls lately :) Mike

To: Zeev Hed who wrote (91328)	7/5/2002 11:20:59 AM
From: robert b furman	Read Replies (4) \| Respond to of 99280

HI Zeev, I'll chime in on the auto sector. I'm 1 of 3 partners who own 1 GM dealership(Chevy ,Pontiac,Gmc Truck,Olds,Buick) in Cleveland Tx,1 Chrysler,Dodge Jeep dealership in Livinston Tx and 1 Chevrolet only Dealership in Livingston TX. Tx in general is a full size truck market - unlike most markets which are generally Car dominant. GM's recent incentives for cars 0.0% goes out for 5 years on all cars and some slower selling trucks - minivans and small trucks. The 0.0 % APR is for up to 5 years.This is a straight up aggressive incentive.Many ads will be 0.0 % for 36 - but then 2.9 or 3.9 for 48 and 60 months - most often just a price leader. My take on this is to stem the loss of market share to the Japanese manufacturers - they are predominantly car makers.This should be successful - but almost under the horizon is perhaps the second punch.The last time I saw GM gain substantial market share was when the dollar was weak. If there were to be parity between the Dollar and the Yen - you'd see tremendous market share gains by domestics or incredible profits.Auto makers ahve a reputation for being greedy and I'm sure a combination of both would be the result. So in the car world the incentives are genuinely strong and they will stir demand - in a segment that is the slowest.Most Japanese and Domestic are now battling in the mid to luxury market.The Koreans are now dominating the entry level market in cars. A retail battle is brewing - since the major Rental fleets backed off almost all of 02.The model year started with them downsizing the fleetsize after 9/11 and then with bankruptcy looming with some of the largerst players - manufacturers were'nt real excited about giving them a lot of cars.The rental fleets are agreements where the manufacturers guarantee a depreciation rate and will buy them back after a minimum holding period.A bankruptcy would be messy in the middle of buying back a big fleet. So with the absence of fleet - manufacturers look to the retail market.GM is down for mandatory vacation the first 2 weeks in July.When the workers come back they'll be building 03's.This incentive round is intended to get inventory levels down so dealers can begin ordering 03's. If every dealer is were I'am - I'm waitng to see.Even though floorplan rates are lower than I've ever seen - in terms of cars I'm playing it very lean. To the degree that a weak dollar gives domestic cars a price advantage - I hope it works. In the truck world - the incentives are strong but a little deceptive.0.0 for 36 months ,then 1.9 for 48 or 2.9 for 60 months. GM is in the sweet spot - ALL of their trucks are new -they have superior engineering and features (hydroformed frames, 4 wheel disc brakes etc).So in the midst of current times going back to 9/11 GM has had two price increases which amount to about 500 dollars on a full size truck. So the incentives are up by about 500 more than they ever have - but the price is up that much.HURRY IN FOR THE SAVINGS. Not to be too critical GM sales and mine are up year over year. LAST YEAR WAS THE ALL TIME RECORD IN SALES. So this year is in fact better and the prices are basically holding flat in and amongst the marketing smoke and mirrors.In truth after 9/11 trucks had 0.0 for 5years also-that was exceptional and it impacted the market tremendously.A huge number of Tahoes and Suburbans were snapped up by a very intelligent opportunistic group of sophisticated buyers.They seized the moment - because they could afford to. Hopefully we will see the same result in the slower moving car market.If it does work - this will be a good boost to Q3 GDP. It is important and interesting to note that Q1's 6.1 GDP bump was to a large degree the result of auto production. Last months NADA letter said that auto production inventory rebuilding ADDED to GDP somewhere around 1.5 - 2.0 of GDP in Q1. In the grand scheme of things new vehicle production this years is at the lowest a 15.7 million unit year (April's rate with reduced incentives)- at the high side 16.7 - 17.0 million units (January's rate @higher incentives).Cut it either way and it will come in as the 3rd or 4 th bets year - not bad in anybody's book.Certainly not Recessionary! So production is being pushed by incentives.Opportunistic Americans love good deals.They are seizing the unsettled markets to real in free money for five years. In the balance of what could only be called a good year- the market share shift is the real story - IMHO. With the dollar and Euro @ parity - watch Volvo Jaguar ,BMW sales slow - watch Cadillac and Lincoln (if they don't implode - Ford has very little new model money) make nice improvements in volume. To the degree that the dollar and the yen get closer - domestic makers will gain here also at the expense of Japanese makers. With steel Tarriffs cutting off cheaters dumping and a strong dollar that Japan intervenes against and our government gives lip service to - you can begin to see that Bush wants a strong domestic manufacturing segment going into the next election. Even the - we'll give you a 20 % advantage to the Japanese - is of question.Now that terrorism has landed on our land maybe we're over the guilt trip of dropping nukes on Japan. So we've got a good year going and the dollar will determine who can afford to "buy" market share -as well as quality,style and marketing. My bet is the winners will be the domestics.Pay attention to the economy - it is well on its way to being good - not robust.That is perfect for equities. America will lead a slow global recovery.A recovery that will not have inflation and rates will be allowed to stay a very nice healthy low for a nice long time. It will build nice slow growth and wealth. It is perfect for equities that create wealth with real products. I for see a nice slow stairstep consolidation kind of market. JMHO Bob