Recipe for disaster coming up for SONC
Here's the preamble to their next earnings release
"Due to gasoline prices and rapidly declining consumer confidence, people have stopped eating out to save money to fill their tank, and especially eating out at restaurants that involve their #1 nemisis - their car"
holy crap - the djia goes to 7000 level by November I'll be a rich man (hold 10000 DIA puts at 101 for November)
Weird market today - whistling past the graveyard I'd say
The nation is freaking out at $3+ gas, discussions around the dinner table tonight about cutting back on spending, trips, etc, and the DIA's are up. Go figure. Tempted to buy more puts and shorts - golden opportuniity
I doubt if people are going to be going out this weekend to confidentily buy $800,000 2 bedroom condos
Good questions - thank you for your response
1) $3 gas... hmmm.. it's 7:44am on the west coast... So, the correct answer is 7:45am August 31, 2005. Go look outside sport. Your local gas station just raised their prices (dramatically). Hope you filled up last night
2) $4 gas... the correct answer is Friday, September 8. Enjoy.
3) $5 gas... the correct answer (I kid you not) is October 4. Enjoy
4) Sonic and the DIA falling 30%? The correct answer is October 20.
Hope you're all out there repositioning your portfolio right now - you'll thank me in 60 days (oh, and filling up your tank).
It has started.
So, when does this recession start? How long will it last? $3 dollar gas, when does that start? When does the $4 and $5 gas come into play? Next month? Next year? Next decade? If you're going to throw numbers around Nostradamus, put some dates with them.
As for the investment strategy, I think I'll stick to dollar-cost averging. It suited me quite well just a few years ago.
if the price goes to hight what about the customer, we depend on gas to drive our cars and trucks dont we count, its 265 a gal here and what is it going to take to bring the price of gas down, stealing it. how about this what if there is a riot and starts a revolution and starts a war over oil. i am am not happy as a customer, why should we pay more because president bush and oil companies line pockets with cash. its not fair that oil companies and goverment steal from us law abiding citizens, remember the tea tax and cause the boston tea party well if the oil prices keep going up there is going to be a Revolution agaist the oil companies and there will be no one to stop us. also what happens when people start stealing from others over gas and people start dieing from gun shot wounds from high gas prices. and what about this to should we start considering useing other sourses of fuels to keep our cars running i have considered using methane as a alternative for gas and people in the usa are angery over the price of gas. when is this all going to stop when we the people start doing something to keep america going if not then what will we do? i will stop buying gas and start walking before i pay $4.00 and $5.00 per gal... hell with with the oil companies. i wonder what it would cost to get a horse and make my old car a dn use it as a buggy for the horse to more it around to place to place...?
Boy, bad news for you. With wholesale gas over $3 a gallon, get ready for $4, and then $5 a gallon gas
Whistle past the graveyard all you like. But you should come to terms with reality (and change your investment strategy accordingly)
We will now rapidly enter a recession. And this hurricane and then gasoline shortage and price spike, is our Kyoto Earthquake.
The recession was coming anyway (see housing bubble, trade imbalance, etc) but this just expedites it.
Sorry to give you the bad news. But instead of a knee jerk bull reaction, please think it through a bit. Maybe next week when you're filling up your car you'll come to pause and think
Were you around in the mid 70's when fuel prices jumped 5X and there were lines at gas stations due to lack of supply? I was, and I can tell you that McDonalds did just fine during that time. Besides, the market has fuel prices already discounted....ML
Wow, there sure is some ignorance (or unwillingness to face facts) on this board
Go pull up MCD sport. McDonald's stock dropped 30% from '72 to '75 during the oil crunch (from $59 down to $42). MCD was UGLY back then. In fact, MCD was ugly for the entire decade of the 70s - from '72 to '80 there was no growth.
Boy, it's amazing how ignorant some folks can be. I'd hate to see your portfolios - folks like you get taken to the cleaners. Go do your research before you spout bad info.
Pretty much every restaurant I visit involves my car. I just don't always sit in it while I'm eating.
Tough economic times sometimes favors QSR concepts over more expensive brands. I may not go to Olive Garden or PF Changs (which are further away than my local Sonic anyway) but I can always afford a burger and fries.
unfortunately (for your portfolio) you're exactly wrong
It doesn't matter what you do. It matters what a company's customers do.
Who gets hurt most by rising gas? Not me or you (assuming you have a decent job, decent income). It's low income folks.
Gas instead of 10% of their income goes to 20% and higher. Leaving nothing for anything else
For someone making $100,000 a year (a nice PF Changs customer), gas goes from 0.1% to 0.2% of income.
Gas is the most regressive situation you can imagine. I think Bill Gates is still going to enjoy is Morton's or Ruth's.
But Joe Six Pack is done eating out for now. Period. He's more worried about paying his interest only loan on his depreciating house.
And he's done shopping at Walmart (except for basics) and vising Dollar Tree.