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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: yoremonhoj who wrote (448)	8/22/2005 2:54:28 PM
From: SliderOnTheBlack	Respond to of 50662

yoremonhoj... re: the RV Industry & Economic Indicator. ...good points. My comments form this spring and my trade - Short on the RV stocks then; was based initially on my belief that shareprices were not reflecting the impact that higher Gasoline Prices would eventually have. I'd acknowledge your comments from this spring... that most suppliers along the supply chain and especially the frontline Exec's in the RV Industry - were at that time... "not" seeing, or feeling the pinch. I based my short-trade on the proverbial "man on the street" feedback that I was getting from the "average Joe" Retail RV Sales Rep, Service Tech's etc. Retail Sales Rep's (and a few Sales Mgr's) for example were telling me that their "closing ratio's" were falling and that they were starting to get "final objections" centering around the fears over rising gasoline prices...and customers who had the financial wherewithall to just write a check and for whom it really wouldn't make any significant difference to... were postponing purchases. I kept hearing from Sales Reps that when they would call back customers that they had spoken to on their showroom floors over the prior months...that they kept hearing inceasing amounts of comments & concerns over "rising gasoline prices". For "Traders"... imho, there has to be a degree of anticipation on acting upon and trading short upon information & trends that were then - not yet to be reflected in the those present quarterly earnings reports, or in the supply chain... but, that seemingly - would soon be. In the RV Stocks and Industry... for example in the Class A Segment - whether gasoline is at $1.90, or $3.00 - on a mathematical and logical basis... shouldn't matter. - if someone is writing a check and paying cash for a $150,000 to a $1 Million highline coach... spending $1,400 on gasoline versus $1,000 for a Trip from St. Louis to Orlando isn't going to matter. But, it's not "logic", or the "math" that affects a great majority of these purchase decisions, or even the US Economy... instead it is subtle shifts in "emotion" and "perception" and small changes within a customer base such as merely postponing a purchase decision untill the following "season", or deciding to keep their 3-year old $200k Coach vs. trading it in on a new $400K Unit and waiting to see where gasoline prices, or the economy goes... That subtle shift in EMOTION, is enough to significantly affect the Economy and the Market....and from what I was hearing... customers we're starting to make irrational "emotional" decisions...as they always do. For the RV Industry however, it's not the $500k Dream Coach segment that is going to get hurt... it's the 30-40 something year old Family-Buyer with 3 small children that is buying the pop-ups and towables - that goes to the weekend Lake Retreat 3 weekends out of 4 over the Summer... that is now begining to feel the pinch of not just gasoline prices, but worries over job losses and a slowing Economy and is getting squeezed by rising rates and higher prices on virtually everything they buy... In regards to Consumer Spending and Sentiment as a whole... we should never underestimate how much hearing about Fed Rate Hikes in the Media, or reading about a 5,000 person layoff, or even a Strike, or Bankruptcy worries in sectors like the Airlines brings...this all affects the "EMOTIONAL MINDSET" of US Consumers. It's not the change in the real economic numbers that the market has to fear... it's the paradigm shift in Consumer Sentiment that is going to occur from the combination of rising Interest Rates, Gasoline Prices and Economic Fears now being reflected by the Headlines... - let the Housing Bubble begin to deflate and this Market that is internally, vastly over-dependant upon earnings from Energy, Housing and a low Interest Rate Environment of "Financial Engineering" - that has been propped up by a US Consumer fueled on a Debt, Credit and the Housing Bubble...and a recession seems a given. Given the disequalibrium in the US Dollar, Trade & Budget Deficits, unfunded Mega-Liabilities in Social Security and Medicare and the ticking time bomb in Derivatives...with who knows what - going on with FNM in the shadows and the final resolution to all of this... may give us another multi-year period of low/negative returns similar to the 1966-1982 period....AFTER we bottom. ...we shall see. Slider