Auto Industry

  • 22 Nov
    Here’s Why You Need To Invest In The EV Trend

    Here’s Why You Need To Invest In The EV Trend

    • The EV trend is here—that’s a certainty—but the question is, how big will it be?
    • Another important question is how fast will the disruption happen?
    • It’s interesting that the more real business strength an EV manufacturer has, the cheaper it is.



    Introduction

    We all know one thing, electric vehicles (EV) will be the future.

    Many countries don’t have oil and will do their best to switch to electric vehicles with the goal of lowering pollution which is a huge issue, especially in China. More →

    By Sven Carlin Auto Industry Investiv Daily
  • 05 Oct
    The Electric Vehicle Trend Will Be Explosive – Here’s How To Profit On It

    The Electric Vehicle Trend Will Be Explosive – Here’s How To Profit On It



    • The latest news surrounding the electric vehicle market is extremely positive.
    • However, not every related investment will do well. We’ll discuss car manufacturers, graphite, cobalt, nickel, copper, and lithium.
    • There’s one way to profit from the growing trend that carries little risk, is already profitable, and definitely offers high upside in the next decade.

    Introduction

    We all know transportation will be electric in the future. However, this doesn’t mean that every investment in the sector is a smart investment.

    A great example of how investments in hot trends can work out is Amazon (NASDAQ: AMZN), and this example is the best-case scenario out there. More →

  • 11 Sep
    Out Of This World Debt Levels Will Damn Future Generations

    Out Of This World Debt Levels Will Damn Future Generations

    • Debt levels are the key driver of economic growth in developed countries. So keep an eye on debt.
    • The velocity of money, household debt, car loans and sales aren’t telling a good story.
    • Globally, the situation isn’t much better. However, there are a few exceptions.

    Introduction

    In today’s article, I’ll analyze the current global debt environment.

    Debt is an economic factor that is unwatched as long as things are going well but as soon at things turn south, everyone will be screaming about a debt crisis and the end of the financial world as we know it.

    Given this, it’s extremely important to know what is going on, how sustainable the current debt levels are, what the impact of debt on the economy is, how to position your portfolio, and perhaps even how to take advantage of potential black swans arising from future debt instabilities. More →

  • 06 Jul
    The Only Way To Invest In The Automotive Sector Today

    The Only Way To Invest In The Automotive Sector Today

    • Automotive stocks are best bought in a recession. I’ll explain how patience pays off.
    • There are no indications of a recession, but car sales have already reached their ceiling.
    • However, a new trend is booming and you may want to expose your portfolio to it.

    Introduction

    The automotive industry is a perfect example of sector cyclicality. What’s important for us investors is that cyclicality offers great investment opportunities. However, a lot of patience is necessary as such opportunities usually only arise once in a decade and only when there is a recession.

    If we take a look at Ford’s (NYSE: F) stock price over the last 30 years, we can see how stock price dips coincide with economic recessions. The stock was the cheapest in 1991, 2002, 2008, and 2012 when there was a recession in Europe. More →

  • 10 May
    The Trouble The Market Refuses To See

    The Trouble The Market Refuses To See

    • GDP growth is at three year lows, car sales have dropped 11%, and the biggest sector contributing to new employment is about to go into oversupply.
    • The FED is in a stalemate situation. It should raise interest rates and deleverage, but it’s already too late as the economy, government, and population is hooked on low interest rates.

    Introduction

    The market’s behavior reminds me of the three wise monkeys. One doesn’t see, the other doesn’t speak, and the third doesn’t hear. The VIX index, a measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices, indicates that investors expect stability and didn’t even react to the bad news coming from the automotive industry, jobs, and a very important bankruptcy. More →

  • 30 Apr
    Sunday Edition: When Buying Luxury Isn’t So Illogical

    Sunday Edition: When Buying Luxury Isn’t So Illogical

    Sven wrote an interesting article a couple of weeks ago on Ferrari (NYSE: RACE), and how investing in it is dangerous as doing so is investing purely in sentiment. If you didn’t have a chance to read it at the time, you’ll find the article here.

    I agree wholeheartedly with Sven on Ferrari. The brand is synonymous with exclusivity, and when a brand’s market is meant to remain small—Ferrari produces only about 8,000 vehicles per year—it’s hard to imagine how the company intends to grow sales, and if sales and revenue won’t grow significantly over time, I have to wonder what the real point is in investing in the company.

    Not only that, but the instant sentiment for the company changes or the market begins to decline, Ferrari’s stock price will undoubtedly fall significantly and any gains made will be wiped out.

    However, I also believe that there are ways to invest in luxury that do make sense. More →

  • 28 Mar
    Triggering The Next Recession – The Automotive Industry

    Triggering The Next Recession – The Automotive Industry

    • The automotive industry makes up 2.5% of GDP, but its discretionary nature is what makes it important.
    • Car loan delinquencies are rising, sales are starting to get stretched from a credit perspective, and higher interest rates won’t help.
    • There is no risk of a financial crisis arising from the automotive industry, but it’s very likely that the industry will lead the economy into a healthy recession.

    Introduction

    In a recent article, I elaborated on the difference between having a static or a dynamic view of the markets and how not thinking ahead can be very dangerous. I used the total amount of car loans outstanding to point out how things have changed in the past, i.e. car sales increased due to low interest rates, and how things will change in the future, i.e. interest rates will increase and lower car sales. More →

  • 19 Jan
    Analysts Have It All Wrong On Tesla

    Analysts Have It All Wrong On Tesla

    • In order to justify current market valuations, Tesla should increase car sales at least 12-fold, but there aren’t any sell recommendations for the company.
    • GM has a market capitalization per vehicle sold that is 79 times lower than Tesla’s.
    • Analysts are extremely exuberant about the market and are misleading investors. A better risk reward model is necessary in order to prevent tragic investment situations.

    Introduction

    As we are in the eighth year of this wonderful bull market, investors, analysts, and asset managers spend much more time analyzing potential rewards than analyzing risk because we easily forget to think about risk which is in opposition to Warren Buffet’s first and second rule of investing:

    “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”

    Not losing money means we should spend more time analyzing risk than we should on analyzing potential future investment rewards. Unfortunately, this is neither fun nor cool, and demands high levels of discipline, a very cyclical and long term perspective on investing with strong self-awareness, and confidence in what you’re doing so as to not just follow the crowd. More →

  • 26 Dec
    Beware The Short Term Cycle In The Automotive Industry

    Beware The Short Term Cycle In The Automotive Industry

    • The automotive industry is expected to grow in the future. While the high barriers to entry eliminate new competition, it’s a perfect business to be in.
    • The short-term debt cycle and stretched balance sheets indicate a contraction in revenues, margins, and profits.
    • To make money with automotive stocks just follow the short-term cycle and be patient, it will hit stocks, it always does and it is close.

    Introduction

    I have recently been nagging about the negative asymmetric risk reward situation the general stock market offers. In order to give you more value, I’m going to analyze a few sectors in detail with the hope of finding the ones that will give you better risk reward ratios.

    Today, I’ll discuss the automotive industry. Many consider it extremely cheap, but valuations simply don’t want to hear about it and remain low. I’ll start with an analysis of the two cycles in the industry, continue with an overview of the fundamentals and a conclude with a risk reward estimation. More →

  • 26 Sep
    An EV Future: Investing Dos & Don’ts – Specific Investment Opportunity Disclosed

    An EV Future: Investing Dos & Don’ts – Specific Investment Opportunity Disclosed

    • We won’t mention Tesla (except for right here).
    • Margins are essential for profitable long term investments.
    • Alternative related investments seem like the best option for low risk, high reward pre-hype investing opportunities in the electric market, the opposite is true for oil.

    Introduction

    The rumor is that Apple Inc. (NASDAQ: AAPL) is searching for a partner to develop a car that many believe will be all-electric. This would be only one additional player in the long line of automotive manufacturers that have embraced the electric trend.

    In this article, we will look at how big the electric trend really is and what the investing opportunities and risks related to the new trend are. More →

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