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The Pandemic Boom Goes Bust

therossreport.substack.com

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Re: The Pandemic Boom Goes Bust

#21

Post by sqqqqrly »

thrown_22 wrote: post #7

I am as far from an inflation hawk as you can get. I basically think that any government can both print money and avoid inflation bar external shocks with a modicum of common sense, e.g. don't pay people not working to piss off the French and Belgians: https://www.theholocaustexplained.org/the-nazi-rise-to-power... Yet we did just that. People not working being paid for existing at a time when the real economy went i…

So the "reason for doing this" was a conspiracy to discredit the left and Polosi, Schumer, Biden, etc are all conspirators? Blah!

Re: The Pandemic Boom Goes Bust

#22

Post by mitjam »

throw0101a wrote: post #8
mdm12 wrote: post #5

Earlier quoted context omitted.

Not only that, but people were stuck in their houses all day. It's not surprising at all that people ordered tons of crap on Amazon or decided their house needed some renovation/appliances/etc.

> It's not surprising at all that people ordered tons of crap on Amazon or decided their house needed some renovation/appliances/etc. As any graph comparing CPI-Goods versus CPI-Services will show: * https://ritholtz.com/2021/11/structural-or-transitory/ Further, Goods YoY inflation has been flat/negative since 2013, so most supply chains probably weren't really being stressed much (and maybe even atrophying slowly)…

I think there are quite a few structural changes that might keep inflation alive for longer: climate change and political measures to mitigate them result eg in higher energy and housing costs, globalization seem to have peaked, second round effects like wage increases already appear. Inflation may well got kick started last year.

Re: The Pandemic Boom Goes Bust

#23

Post by phkahler »

boboche wrote: post #15

Stopped reading at “tesla is a car company”. When I read that, it shows how little research has been done and not trusting anything else. Hate and downvote all you want, anyone who did basic research on the company, IP, and execution knows how bad that narrative will age. Its not about loving or hating Elon, its simple business. While the P/E compression during a recession is completely normal, and yes, Tesla is over…

Remember in P/E the E is earnings, not revenue. Their P/E is probably astronomical. The only thing that suggests P/E isn't an accurate indicator for them is massive growth. Nobody can really say what E will be when the growth slows or stops. Nor do we know when it will.

Re: The Pandemic Boom Goes Bust

#24

Post by thrown_22 »

nebula8804 wrote: post #18
thrown_22 wrote: post #7

I am as far from an inflation hawk as you can get. I basically think that any government can both print money and avoid inflation bar external shocks with a modicum of common sense, e.g. don't pay people not working to piss off the French and Belgians: https://www.theholocaustexplained.org/the-nazi-rise-to-power... Yet we did just that. People not working being paid for existing at a time when the real economy went i…

>Were I a betting man I'd say that the reason for doing this was to discredit left leaning economic policy for another 40 years, like happened after the stagflation of the 70s. You see this is what I have been thinking as well. We have the corruption and rot being exposed on a daily basis by all the new Left media. Do we honestly think the capital class is that stupid that they haven't thought of some way to extingui…

>The left frequently cites FDR and how things turned around after the people had enough and were at the breaking point.

The New Deal did very little to stop the great depression until WWII started. People forget that everything in the New Deal was still too little too late and it was only fixed when the federal government debt was 20% of the US economy for 5 years between 1941 and 1946.

Re: The Pandemic Boom Goes Bust

#25

Post by giantg2 »

pjc50 wrote: post #20

This is missing a very important graph, unemployment. Here's an example: https://www.bbc.co.uk/news/business-52938993 And its not-quite-mirror, labor force participation: https://www.bls.gov/charts/employment-situation/civilian-lab... The purpose of stimulus was to prevent those from looking even worse and causing more permanent damage to the economy. In that regard it's been a huge success; somewhere above, Keynes i…

And unloading treasury held securities.

Re: The Pandemic Boom Goes Bust

#26

Post by MisterSandman »

boboche wrote: post #15

Stopped reading at “tesla is a car company”. When I read that, it shows how little research has been done and not trusting anything else. Hate and downvote all you want, anyone who did basic research on the company, IP, and execution knows how bad that narrative will age. Its not about loving or hating Elon, its simple business. While the P/E compression during a recession is completely normal, and yes, Tesla is over…

I agree with everything else you said except your first sentence. Saying that Tesla is a car company isn't untrue and there's no reason for you to have such a visceral reaction to it.

Tesla has made no indication that they'd ever license their self-driving or sensor tech to others. Pretty much every other project Tesla has suggested is vaporware. The one and only thing they'll successfully produce and launch, possibly in our lifetimes, is cars.

And yes, the car part of their company is not important to them, but it's what they're making, and it's what we're buying. It's also the weakest part of their company. Despite their production numbers being relatively low, the QC issues and service issues are pretty noticeable. They absolutely need to fix them to reach the average customer, which they'll need to. To reach full potential of their current stock values, they can't just rely on tech savvy individuals looking to overlook QC issues.

It's like saying "Apple isn't a phone company, it's a services company." Even though that might be true in a sense in terms of their revenue, the iPhone is the lynch pin of their business. If they fucked up iCloud and Apple TV+ and the App Store, it'd suck, but the company would survive. If they majorly fuck up the next iPhone? Probabaly not.

Re: The Pandemic Boom Goes Bust

#27

Post by boboche »

phkahler wrote: post #23
boboche wrote: post #15

Stopped reading at “tesla is a car company”. When I read that, it shows how little research has been done and not trusting anything else. Hate and downvote all you want, anyone who did basic research on the company, IP, and execution knows how bad that narrative will age. Its not about loving or hating Elon, its simple business. While the P/E compression during a recession is completely normal, and yes, Tesla is over…

Remember in P/E the E is earnings, not revenue. Their P/E is probably astronomical. The only thing that suggests P/E isn't an accurate indicator for them is massive growth. Nobody can really say what E will be when the growth slows or stops. Nor do we know when it will.

Exactly, wall street is following guidance or lower while they are striving to exceed that by a lot, and are succeeding extremely well so far, but being realistic and doing your own research vs. trusting online “sources” for confirmation biases was my point.

Wow lots of passion you should see the points going up and down on this one ;).

Re: The Pandemic Boom Goes Bust

#28

Post by gniv »

The author makes a few good points, but I'm not convinced by the overall thesis, which seems to be supported by a few anecdotes (meme stocks) and speculation. Notably, he went all out with Apple and he was wrong. Apple both reported great sales and guided well for the future.

Re: The Pandemic Boom Goes Bust

#29

Post by geofft »

drexlspivey wrote: post #13
bluedays wrote: post #2

I think it’s naive to say that a couple stimulus checks and some unemployment is responsible for high consumer spending.

I think it's naive to say that 6 TRILLION dollars of stimulus and a sharp rise in inflation that followed it is unrelated

But most of that stimulus didn't end up in the hands of consumers.

People weren't purchasing Pelotons with $600 stimulus checks. The sort of person who has nothing better to spend an extra $600 on than a Peloton is the sort of person who wasn't eligible for the stimulus in the first place. (I do fully agree that stay-at-home orders motivated some purchases, though - but again, the sort of people who could actually stay at home and take meetings from their home office instead of driving around town delivering Pelotons were the sort of people who already had the cash to spare for these things, anyway.)

That stimulus ended up in the hands of business owners, which effectively caused a partition: because business owners, as a group, had more money, they could all raise prices and afford it. But the working class, as a group, did not have noticeably more money.

In other words, there was a sharp rise in inflation - for the owning class. The effect was the same as if there were two neighboring countries, and one experiences inflation. That country's cost of living goes up, but so do their wages and the valuations of the things they own. So they're fine, and effectively they can buy things from the second country for even cheaper in terms of purchasing power. But people in the other country find it harder to afford to buy things from the first country. They're the ones most hurt by inflation.

Re: The Pandemic Boom Goes Bust

#30

Post by bryanlarsen »

phkahler wrote: post #23
boboche wrote: post #15

Stopped reading at “tesla is a car company”. When I read that, it shows how little research has been done and not trusting anything else. Hate and downvote all you want, anyone who did basic research on the company, IP, and execution knows how bad that narrative will age. Its not about loving or hating Elon, its simple business. While the P/E compression during a recession is completely normal, and yes, Tesla is over…

Remember in P/E the E is earnings, not revenue. Their P/E is probably astronomical. The only thing that suggests P/E isn't an accurate indicator for them is massive growth. Nobody can really say what E will be when the growth slows or stops. Nor do we know when it will.

The P/E for the latest quarter is about 100. At that valuation, growth only has to keep up for a year or two to hit a reasonable P/E. If you think growth will continue for longer, the stock is cheap.
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