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Post by Deleted on Mar 15, 2022 3:23:51 GMT
1, 2 and 5 have been a forgone conclusion for over a year - sans war. This is expected as far as I'm concerned. Multiples are contracting - market is re-pricing.
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Post by FD1000 on Mar 15, 2022 13:40:38 GMT
1, 2 and 5 have been a forgone conclusion for over a year - sans war. This is expected as far as I'm concerned. Multiples are contracting - market is re-pricing. The magic is to be invested most times and be out when risk is high and most stuff goes down. |
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Post by chang on Mar 15, 2022 14:17:43 GMT
1, 2 and 5 have been a forgone conclusion for over a year - sans war. This is expected as far as I'm concerned. Multiples are contracting - market is re-pricing. The magic is to be invested most times and be out when risk is high and most stuff goes down. ”Buy low, sell high.” ~ Louis Rukeyser |
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Post by steadyeddy on Mar 15, 2022 14:59:11 GMT
1, 2 and 5 have been a forgone conclusion for over a year - sans war. This is expected as far as I'm concerned. Multiples are contracting - market is re-pricing. The magic is to be invested most times and be out when risk is high and most stuff goes down. Only magicians can perform magic. |
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Post by Chahta on Mar 15, 2022 15:07:10 GMT
But magic is really illusion. 😉
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Post by steadyeddy on Mar 15, 2022 15:32:04 GMT
But magic is really illusion. 😉 Good one.. made me ROFL.. |
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Post by Chahta on Mar 15, 2022 19:05:23 GMT
I think it's slowing down all by itself. Once gas gets to $4 it will slow down more. Just like last time, instead of just jumping in their cars and going someplace when gas gets to $4 people start to think how much is this trip going to cost. Maybe the oil companies learned their lesson,,, if they keep gas just under $4 I would say yes. Gas is over $5 in CA. Slowing down when? If something is in short supply it will cost more. Just economics 101. |
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Post by Capital on Mar 15, 2022 19:20:10 GMT
I think it's slowing down all by itself. Once gas gets to $4 it will slow down more. Just like last time, instead of just jumping in their cars and going someplace when gas gets to $4 people start to think how much is this trip going to cost. Maybe the oil companies learned their lesson,,, if they keep gas just under $4 I would say yes. GAs is over $5 in CA. Slowing down when? If something is in short supply it will cost more. Just economics 101. The amount of gasoline purchased is not that much affected by the price of gas. See link. |
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Post by Chahta on Mar 15, 2022 19:23:36 GMT
It is the last thing folks will do without.
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Post by FD1000 on Mar 15, 2022 19:37:21 GMT
Observation. When oil goes up, I see it at the pump the next day. When oil goes down, I see it at the pump, after 4 weeks. Supply, demand my axx.
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Post by junkster on Mar 15, 2022 19:49:54 GMT
Observation. When oil goes up, I see it at the pump the next day. When oil goes down, I see it at the pump, after 4 weeks. Supply, demand my axx. +1. Gasoline prices in the futures market have collapsed recently from over $3.80 to now under $3. Locally our gas has dropped a mere 3 pennies. |
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Post by Mustang on Mar 15, 2022 20:01:26 GMT
Prices have to go up the next day. If you think about it the gas station has to replenish its supplies paying the higher price. It can't do that unless it raises prices. Selling at $4 when you have to buy the next tank at $4.50 is a good way to go out of business.
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Post by FD1000 on Mar 15, 2022 20:35:11 GMT
Prices have to go up the next day. If you think about it the gas station has to replenish its supplies paying the higher price. It can't do that unless it raises prices. Selling at $4 when you have to buy the next tank at $4.50 is a good way to go out of business. The gas station station has to make money on the cost. Next time it pays more, it should raise the price. Regardless, whoever sets the price, doesn't reduce prices quickly because they can, it shouldn't take weeks. |
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Post by archer on Mar 15, 2022 21:15:56 GMT
The local station I often use is a cheaper (but not cheapest) off brand station. Yesterday it was selling reg for $5.95 and today $5.77. I think it probably had a tank truck come in yesterday, and there is a station across the street it needs to compete with. Still $5.97 at that one. People are funny when it comes to gas. Over the years I have at times seen cars lined up around the block to buy gas at a station that had low prices. I bet half of them wouldn't walk 100 feet to pick up the amount they saved waiting in line for 20 min. I often see cars at Costco waiting in line with 10 cars ahead of them. I bet some are sitting there idling their engines the whole time.
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Post by Mustang on Mar 15, 2022 21:29:37 GMT
Prices have to go up the next day. If you think about it the gas station has to replenish its supplies paying the higher price. It can't do that unless it raises prices. Selling at $4 when you have to buy the next tank at $4.50 is a good way to go out of business. The gas station station has to make money on the cost. Next time it pays more, it should raise the price. Regardless, whoever sets the price, doesn't reduce prices quickly because they can, it shouldn't take weeks. There is a difference between bookkeeping profit and cash flow. |
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Post by FD1000 on Mar 16, 2022 0:21:32 GMT
The gas station station has to make money on the cost. Next time it pays more, it should raise the price. Regardless, whoever sets the price, doesn't reduce prices quickly because they can, it shouldn't take weeks. There is a difference between bookkeeping profit and cash flow. Looks pretty simple to me. Suppose a gas station makes 10% on the cost. All the owner has to do is add the 10% until the next refill. Whatever he pays next, just add the 10%. But, he can the gas station near him and tell the other owner, let's raise our price. Or, just raise the price and others follow. Last week I drove somewhere and came back after 4 hours. I saw the increase at 9 AM at one station. By the time I came back 50% already had it. I once talked with a station owner, he admitted that he can leave the price as is until he gets new refill, but he raises it immediately, he is no dummy and then smiled |
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Post by Chahta on Mar 16, 2022 2:42:07 GMT
I heard one time from an owner the supplier tells them the price to post. Stations only work on a few cents per gallon of profit.
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Post by Mustang on Mar 16, 2022 9:08:33 GMT
I don't run a gas station but from what I have heard 10% might be a little high in such a competitive market. Let's assume 5% and that the underground tank holds 1000 gallons. The station buys at $3.90 paying the gas company $3,900 and sells for $4.10. In the mean time the distributor has risen the price to $4.20 per gallon. He is bringing in $4,100 but has to pay $4,200 for the next 1000 gallons. His book profit is $200 but if he doesn't raise prices immediately he will be $100 short of being able to pay for the refill.
That is just a simple example of the difference between book profit and cash flow. A lot of small businesses can show a book profit and still go bankrupt because they cannot pay their bills. By the way, the opposite is also true. Because of non-cash expenses such as depreciation a company can post losses and still stay going. But that is a slow death because it becomes difficult to repair buildings and replace equipment.
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Post by Deleted on Mar 16, 2022 10:39:36 GMT
I spent literally a minute googling this - gas station owners and how much they make - www.eposnow.com/us/resources/how-much-do-gas-station-owners-make/. Don't know if the info is all correct, but it looks okay. From a point of sale component of the industry. I think I'll stay out of the gasoline retail business - average owner salary in the 60Ks as of April 2021. Explains costs a bit. |
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Post by Deleted on Mar 16, 2022 10:50:07 GMT
As to the broader topic - investments - economy is still in good shape - bonds are still poor investments at this time - I am holding my G fund and cash (17% all total) still though and it just feels good! Can't figure out where to put some it yet. Inflation is still in the higher single digits overall annually. High multiple stocks - of any type - not supported by earnings - are still grinding lower with corresponding volatility as they find their "new" prices. Equities supported by earnings and reasonable multiples should do fine in the long run. Geopolitical factors are just that and not much more can be said. Still - as Chang said - buy low, sell high - works for the gifts given by the schizoid Mr. Market. Personally - I wouldn't be in indexes with too many high multiple equities or concentrations at this time.
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Post by Mustang on Mar 16, 2022 12:39:08 GMT
I spent literally a minute googling this - gas station owners and how much they make - www.eposnow.com/us/resources/how-much-do-gas-station-owners-make/. Don't know if the info is all correct, but it looks okay. From a point of sale component of the industry. I think I'll stay out of the gasoline retail business - average owner salary in the 60Ks as of April 2021. Explains costs a bit. I didn't know that. That isn't very much. It comes out to around $28 per hour to own, manage, buy materials, keep the books, pay the loans and other creditors, etc.. Since stations are open probably 16 hours per day 7 days per week they would need several employees. With a 2.5% unemployment number and help wanted signs on just about every store he would have to be paying at least $15 per hour. I'd bet a little more. That would be roughly $90,000 more in salaries. |
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Post by Chahta on Mar 16, 2022 12:41:31 GMT
That is why gas stations used to do repairs and morphed into convenience stores.
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Post by FD1000 on Mar 16, 2022 14:05:20 GMT
That is why gas stations used to do repairs and morphed into convenience stores. They make more money from the convenience store and why you see much nicer gas station, and some of them have lower prices. When we are on vacation, we always buy coffee at these places, NEVER in Starbucks. In Europe, they are better, they serve real food and cakes too...mmm. |
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Post by FD1000 on Mar 16, 2022 14:18:09 GMT
I don't run a gas station but from what I have heard 10% might be a little high in such a competitive market. Let's assume 5% and that the underground tank holds 1000 gallons. The station buys at $3.90 paying the gas company $3,900 and sells for $4.10. In the mean time the distributor has risen the price to $4.20 per gallon. He is bringing in $4,100 but has to pay $4,200 for the next 1000 gallons. His book profit is $200 but if he doesn't raise prices immediately he will be $100 short of being able to pay for the refill. That is just a simple example of the difference between book profit and cash flow. A lot of small businesses can show a book profit and still go bankrupt because they cannot pay their bills. By the way, the opposite is also true. Because of non-cash expenses such as depreciation a company can post losses and still stay going. But that is a slow death because it becomes difficult to repair buildings and replace equipment. Of course, it's better to raise the prices. If the owner always make 5%, he will keep making it without raising the price immediately. On the first 1000 gallons he made $200 On the second 1000 gallons, he paid $4200, sell it for $4.41 per gallon(total=$4410), making $210 which is still 5%. If he raises it immediately, he made extra money because he could, unless the guy next door kept the prices lower until the next refill. Why prices don't go lower fast? Because the owner must lower the prices right away and he doesn't want to lose based on his cost, he waits for the next refill. Basically, when he can make money he does, that's capitalism=greed  . It works only one way. So, if the owner wants to be honest, he should increase/decrease prices right away, I will vote for that. How can we enforce it? What about the oil producers? Do they lower their NEW oil production price as fast as they increase it? I'm sure they don't either. |
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Post by steadyeddy on Mar 16, 2022 23:51:37 GMT
Observation. When oil goes up, I see it at the pump the next day. When oil goes down, I see it at the pump, after 4 weeks. Supply, demand my axx. In physics, it is called hysteresis. Those interested in that term, the definition is... "As a general term, hysteresis means a lag between input and output in a system upon a change in direction. Hysteresis is something that happens with magnetic materials so that, if a varying magnetizing signal is applied, the resulting magnetism that is created follows the applied signal, but with a delay." |
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Post by FD1000 on Mar 17, 2022 0:12:56 GMT
There is physics and there is a reality check, oil was up 30+%, gas at the pump was up 80-90 cents. Oil price fell back to the same level, prices are down maybe 5 cents.
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Post by gman57 on Mar 17, 2022 1:08:16 GMT
Have no fear... as it has always been and always will be..... the cure for high prices is high prices.
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Post by Chahta on Mar 17, 2022 1:46:11 GMT
There is physics and there is a reality check, oil was up 30+%, gas at the pump was up 80-90 cents. Oil price fell back to the same level, prices are down maybe 5 cents. At least you won’t be shocked by the next increase, because it’s not over. |
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Post by steadyeddy on Mar 17, 2022 2:32:32 GMT
The bond traders do not believe Powell that he could raise rates 6 more times this year LINKThe 5 to 10 year segment of the yield curve inverted today. Recession is highly likely. |
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Post by alvinthechipmunk on Mar 17, 2022 2:40:24 GMT
.....Would love to hear from Old Skeet, particularly after today's big pop.
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. It works only one way.