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Carmageddon Is Coming

And I looked, and beheld pale affordable ride-sharing: and his name that caught a Lyft was Death, and Carmageddon followed with him.

Are you prepared for the end of times for personal vehicles?

Dogs and cats ride-sharing together … mass hysteria!

It’s happening already. Well, not the “dogs and cats” thing. They don’t have opposable thumbs to operate ride-sharing apps or open car doors, thank God.

But the pain for the auto industry is real:

  • Analysts project car demand to drop 3% this year.
  • Automakers cut their global workforce by about 38,000 in the past six months.
  • British car production declined for the eighth consecutive month, falling 18.2% in January.
  • U.K. commercial vehicle exports plunged by 89% in April.
  • Car buyers in Turkey bought 60% fewer vehicles since January 2018.
  • U.S. car registrations fell by 10% this year.

That’s just the tip of the engine block. Nomura analyst Masataka Kunugimoto says: “The pain is just beginning,” and that the world has passed “peak car.”

It seems like Lyft Inc. (Nasdaq: LYFT) was right in its IPO prospectus: “We believe that the world is at the beginning of a shift away from car ownership to Transportation-as-a-Service.”

The Takeaway:

Great Stuff readers know that I’ve regularly bashed both Lyft and Uber Technologies Inc. (NYSE: UBER) for losing billions and for not being technology companies!

But … that doesn’t mean that they aren’t on to something big here. This is especially true outside the U.S.’s car-ownership culture. Why own a car, and all the costs that come with maintaining it, when you can simply summon a ride from your smartphone?

This will become even more prevalent, and more efficient, once self-driving cars become mainstream.

While Lyft and Uber stocks are overpriced right now (investors are treating them like tech stocks), they could still be solid long-term investment opportunities.

But the real investment opportunity is in self-driving cars. Companies like Tesla Inc. (Nasdaq: TSLA) will give car-obsessed Americans a solution for their driveways and provide lower labor costs for ride-sharing companies like Uber and Lyft.

Things That Make You Go, “Hmmm”

  1. They Don’t Really Care About Us

    Are you one of those people who calls up your cable company and threatens to leave if you don’t get a good deal? Have I got bad news for you. Pay-TV companies like Comcast Corp. (Nasdaq: CMCSA), Charter Communications Inc. (Nasdaq: CHTR) and AT&T Inc. (NYSE: T) are showing you the door. If you want to leave, leave. They don’t care anymore.

    “I’m sort of indifferent,” Charter CEO Tom Rutledge told investors last month. That’s because they’ve found higher margins and revenue by selling broadband. Meanwhile, pay-TV services are now looking for “high-quality” customers — i.e., those willing to accept price increases.

    With cord-cutting rates continuing to rise, those better be some really gullible — ahem, I mean really “high-quality” subsribers. Let’s hold on CHTR, T and the like until we see just how well those internet margins hold up.

  2. Fitness IPO Into Your Portfolio

    Somehow, this is a big thing. Riding a bike, not going anywhere and having a random stranger on the screen in front of you encouraging you to do it. Personal trainers streamed right to your exercise cycle. It’s such a big deal that Peloton is filing for an IPO … one estimated to be worth at least $4 billion.

    Peloton cycles sell for about $2,000. Subscription prices to digital workout classes cost about $39 per month. It’s a lucrative business, as Peloton raised $550 million last year. It still amazes me what kind of abuse people will pay for. Keep Peloton on your IPO radar [Note: link to MIP IPO Speculator promo]. This health trend has wheels.

  3. Amazon Drones On

    A veritable airborne army of delivery drones is on its way to a neighborhood near you! The Federal Aviation Administration just gave Amazon.com Inc. (Nasdaq: AMZN) permission to start testing delivery drones in the U.S.

    The company plans to start testing drone delivery “within months.” According to Amazon, its newest drones can fly up to 15 miles and can deliver a package under five pounds in about 30 minutes.

    I have to give this one a great big “Hmmm…” You just know certain people are going to see these flying drones as a challenge. Shoot them down, get a prize. Good luck, Amazon.

Turn on your images.

Today’s reader feedback comes courtesy of this conversation-starting article from Axios: “1 Big Thing: Too Much Money (And Too Few Places to Invest It).”

Enlightening article … and so true. What entity can handle all this capital? Don’t forget the $184 trillion in frightened bond money. 

Based on what I’ve learned, real estate investments at times are not the best candidates for cash investments; too illiquid. Gold and silver likely won’t work either because their markets are too small to accommodate so much cash (when including trillions in frightened bond money.) 

There are two options: cash and the U.S. stock market.  

This is where investors can realize liquidity, better returns in the form of equity growth and dividends and “relative” safety.

This is why we can expect to see further appreciation in the Dow with retracements along the way through 2020 to 2021. Dow 30K, anyone?

— Amber Lancaster, Director of Investment Research, Banyan Hill Publishing.

Mrs. Lancaster has a point … though I’m still trying to wrap my head around the idea of having so much money you don’t know what to do with it.

My “devil’s advocate” take on this is: If you have this much money, and you aren’t already investing, why would you invest now? Dow 30K and 40K are tempting and all, but if these companies won’t invest in themselves, why would they invest in the stock market?

What’s your opinion? Great Stuff wants to know! Drop us a line at GreatStuffToday@banyanhill.com and tell us what you think about having too much money to invest.

Yoo-Hoo! I’ll Make You Famous

Turn on your images.

You know you want to see your quote in an edition of Great Stuff!
What are you waiting for?

Send me your great stuff! Market memes, snide remarks, stock tips … the sky’s the limit. (But no profanity, please. We can’t publish that s%*& here.)

Drop me a line at GreatStuffToday@banyanhill.com [Note: this email is working, please send stuff in so I can test it out.].

And, if you’re really lucky, your wisdom could end up immortalized in the Great Stuff e-zine.

Until next time, good trading!

Regards,

Joseph Hargett
Great Stuff Managing Editor, Banyan Hill Publishing

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