“Permission to board? Should we remove our shoes?” Becky and I asked. A polite way to board a brand-new boat on display at the Newport International Boat Show last weekend. With docks loaded with giddy, lazy cash looking for some fun next summer, you can imagine the challenge it is to keep the decks free and clear of excess debris.
As Becky and I spoke with our local Grady White dealer and boatyard owner, we learned that if you want a new boat, you’ll have to get in line because dealer allocations are a fraction of what they were pre-Covid, thanks to a lot of things like a shortage of workers and supplies. Combine the shortage with the excesses of the lazy cash hoards looking for places to be spent, and you know where prices are anchored. And it’s not just last weekend’s intelligence gathering that’s concerning.
In speaking with a client, an owner of a major manufacturing business in the South, yesterday, he told me demand is great, but because of the supply chain issues, he can only meet fifty percent of it. On top of that, the forty-foot shipping containers he uses cost three to four times what they did pre-Covid, making that a major cost to consider like never before. It makes margins that much thinner and an over-order of supplies that much more costly.
Action Line: You can see the tug of war between demanding lazy cash and discerning suppliers making the world go round. Meanwhile, lazy cash is throwing itself at the stock market like a drunken sailor. Look at my chart below of the companies in the S&P 500 trading at ten times sales, before factoring in costs of goods sold, never mind profit. Stay tuned.
E.J. Smith - Your Survival Guy
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