Yeah that’s what I meant.
Any and all investments are a gamble. You may not think so, but it is. You hedge your bet by investing in companies that have good past performance. And while I don’t gamble directly in the stock market, I gamble by proxy via my 401K or my investment broker.
And this market is almost not predictable. My investment broker has a MS in Economics from Harvard with undergraduate degrees in Mathematics and Computer Science from Cornell. And he’s seeing things in this market that he’s never seen before.
I ran across another Stansbury Research column this morning and let it pass as I have others but maybe that’s the place to get the inside line on getting rich fast @bing. He’s a $Billionaire I’m sure.
Morning, all. This one hasn’t spun out totally, but can we get back toward topic? Thanks.
1 Like
I’ve got this!
How will Detroit get past this? (Back on track, now! 
)
I’m a little late to the discussion, and I’m not going to read all the responses (just don’t have the time), but that won’t stop me from giving excellent opinions.
Forbes won’t let me read the text. They want my money. I watched the “silent movie” and got very little information.
I’m not so sure this a major problem for “Detroit” as it is for all the individuals who’ve made poor decisions to spend more, or charge more, than they can handle. It’s crazy to see how many are in this boat! Those same individuals often are people who make many poor choices in other areas of life. You cannot blame lenders for these folks’ inability to think clearly, but I sometimes wonder if their parents were complicit or to blame by not being good role models or not taking the time to discuss money with the kids.
I’ve never financed a vehicle. It’s a fool’s game and cars are not an investment and new cars are not a necessity. For the past several decades I’ve paid cash for used cars, generally 80% to 90% off the original retail price, and I drive them for years, nearly trouble free, sometimes less problematic than folks report on this forum, concerning new vehicles! I’ve literally save tens or hundreds of thousands of dollars following this concept. I take such extreme pleasure from driving bargain finds from sources like Craig’s List. It’s the gift that keeps on giving.
From the Forbes movie, I did hear a recommendation to not keep updating vehicles to newer ones, and to drive what you have longer. (Dance with the one who brought you to the dance.) That’s probably the best part of the movie.
Anyhow, when we talk about Detroit getting past this, are we talking about the “Big 3”? I believe they are already trying to phase out of the retail market, no?
I know the push is to EVs, and car sharing kinds of things, and self-driving rides, right?
I’m just thinking this is more a problem for individuals biting off more than they can chew. I’d be more concerned with the lenders holding the contracts, than with “Detroit”. I think they’re already thinking beyond this stuff.
Anyhow, that’s my brain farts, (not all top shelf), but you can thank me for getting this discussion back on the rails 
. Hold the applause. 
please. I’ll show myself out, now.
CSA
I don’t even remember what the question is anymore. I dropped my subscription years ago so I guess I am just living in fantasyland. My only thought is people tend to do what is in their own best interest over time. This is something that is wholly lost on some economists and media folks. Better to buy new or used, finance or pay cash, short term long term, DIY or dealer, etc.? Depends on what is in the best interest of the person making the decision, and each person has different issues.
We usually bought new and were happy. Then came college and other expenses for a while and we bought used. Getting back to new again with no trade required a longer payment period (unable to access 401K money while still working) so we did that. Trading in four years the second time was a lot easier. Great comfort in having a car under warranty for the full ownership period. Of course I always did a lot of DIY to save money and to stay mobile. My BIL though should not do anything so it’s to the dealer for him (or was). Now we buy new because I like having no problems and money is not a big issue. When I told my wife though we should think about trading she said I like this car and didn’t want a new one. We’ll see how that goes. Meanwhile I’ve got some rust to fix on my Pontiac. So no right or wrong, people do what they need to do by and large, just don’t be stupid.
I opened with that link but what was on my mind at the time was the local Toyota plant and the not so distant Nissan plant have shut down production for a number of weeks and while the shutdown is ostensibly to prevent an overstock of vehicles, certainly somewhat due to corona virus but before the pandemic arrived sales were down considerably. I see Ford has been on a decline on Wall St for a while and it’s likely to continue down to who knows where. But maybe Detroit will see the pandemic as a smoke screen to cover their mismanagement hoping for some bail out money again. Or for Ford in particular a first handout.
Me too! I struggle to find the benefit of driving a new car with a costly monthly payment, when an old car will run fine most of the time, which should allow one to save up for the times when costly repairs are needed.
1 Like
Most of the cars I drove on my 120 mile daily commute started out as used cars (not all). I keep pretty good records on repair and maintenance costs on all my cars and equipment. I don’t bother with gas cost, insurance, or licensing-what’s the point? At any rate when I sat down and figured out the marginal for each 10,000 miles and overall cost per mile, including the fixed cost, on my cars over 6 or 700,000 miles, I found very little difference in the cars that started out new and the ones that started out used. I concluded it makes no difference over the long haul depending on mileage. A new car is just as cheap per mile as a used car if you keep them and drive them. Of course I did most of my repairs myself, so purchasing repairs would have increased the costs in later years. So just depends in my book. Of course the new car sitting in the garage going nowhere was over $2 a mile while the new car on a daily drive closer to 15 cents. Just depends how you use them, and how much equipment investment you feel comfortable with.
While I agree that many people do make bad choices and that’s why they are in this predicament…Banks do have some of the blame with their predatory banking practices. Most of the practices are easy to spot. Some require a law degree. The regulatory rules and punishment for these practices are so lax…you stop one, then 10 more pop-up. 20/20 did a show on this just last year. One guy was finally sent to jail (2 years) after he had been doing this type of lending for decades under at least 10 different companies. He gets caught and is shut down. Within a month he’s opened another business (even in the same state/town).
I too have only been buying cash for several decades. But to think that everyone has that option is absurd.
I don’t think Detroit will ever come back to what it had been and the decline happened way before the COVID-19 situation.
The Generation X and later generations are not as car conscious. Back in the 1950s when I became a teenager, there was the excitement when the new models hit the showrooms. The style changed every two or three years. In fact, the 1957, 1958, and 1959 Chevrolets were completely different in appearances. Young owners modified their cars for better performance. There was a hierarchy in the brands from GM, Ford and Chrysler. When the recession hit in 1957, Ford, GM, and Chrysler were caught with their pants down. Young buyers were buying VW Beetles. The Big 3 came out with more economicsl compacts–the Falcon, Valiant and Corvair, but by the end of the 1960s, the cars became large again. Then in the 1970s, the Hondas, Toyotas, and Datsuns came on the U.S. market and the Big 3 really didn’t offer anything equivalent.
Today, many teenagers aren’t excited about getting their driver’s license. Many younger people are moving into urban areas some aren’t even owning cars. Those who do think of a car as transportation rather than an indication of one’s status.
Detroit seems to have left the car and minivan market to the Asian nameplates in favor of four door pickup trucks. I really don’t think the four door pickup truck market for those needing basic transportation will last very long.
Yeah I hear you, don’t sell all I heard, hope the stocks come back in 15 years when I will need them. No car stocks but got the gun, unloaded by the door, and next one by my bed. Cars got rifled for change, now locking and setting alarm, I think this is going to turn into a nasty mess. Thinking what will I do if somebody knocks on the door and says they need food, I donated to the food pantry probably not going to make me feel good, I will probably go pull out a frozen lasagna can of beans or something and give it to them. Friend does shopit or whatever, grocery store sold out of so much stuff including dried pasta. Hoarders suck, I will find something to eat at the grocery store if needed.
I live in an area that was hard hit by automobile plants that manufactured transmissions, batteries and electrical parts that shut down. This shut down began over 30 years ago and our region has never recovered. Unemployment is nothing new.
When I began my teaching career as an instructor at a state university in 1965, my salary for the academic year was $6000. I was able to get summer teaching which gave me an additional $1700. However, if I had worked on the assembly lines at one of the factories, I would have made much more money. When the factory jobs disappeared, many workers had a difficult time. It was hard to relocate, because they couldn’t sell their houses, and they still had mortgages.
These automobile manufacturing jobs paid high enough wages that the workers could afford to buy the product they produced. This kept car sales up.
Yes, I fault Detroit for not looking ahead to the future.
A couple things:
My Gen-X children and their husbands all have cars and enjoy them. I know it’s a small sample, but their friends all seem to have the same interest level, and all own cars except one, and she lives and is a student in downtown Chicago.
I worked at a steel mill that at its height in the 1950s employed 35,000. Over time, the plant became more efficient, using new technology to make the same amount of product with fewer employees. When I started in 1974, there were about 12,000 employees. Today the plant is shut down, but lasted until about 15 years ago, employing about 7000 and making about as much steel as when I was there. Had
they continued to employ 35,000, they would have gone out of business many years earlier, probably before I arrived in the mid-70s. The same thing happened at auto plants. Today the assembly line is automated and the tools the assemblers use allow them to do in seconds what took minutes many years ago. They could have continued to build cars the old way, but they would not provide really good jobs for their workers, even though there are fewer of them. You know all this. I just thought I’d remind you.
@jtsanders. I remember back in 1960 hearing Margaret Mead, a well known cultural anthropologist, giving a speech at a convocation. She talked about the middle class norm-a married couple with three kids, a house in the suburbs and a station wagon. The breadwinner stayed with one job his or her entire working career. Much of that has changed. There are more single parent homes. People are more apt to change careers a couple of times in their lifetimes. Younger faculty at colleges and universities are on year to year contracts and have become professional migrants. More younger people are living in urban areas, Now if you are living in a downtown apartment and do own a vehicle, it probably isn’t going to be a large four door pickup truck. It’s more apt to be a Toyota Prius. Detroit missed the boat in coming to the market too late developing a hybrid like the Prius, just as it missed the boat back in the late 1950s in not building a challenger to the VW Beetle.
By the 1970s, the two parent house in the suburbs with 3 kids and a station wagon was changing. My point is that Detroit should have paid more attention to societal trends and built vehicles for these changes.
That might be considered a niche market.
In the last 10 years the U.S. Prius sales ranged from 49,500 to 147,500 per year with sales peaking in 2012.
In the same time frame the U.S. sales of the F series Ford truck have been between 528,349 and 909,330 with sales peaking in 2018.
The Prius is less profitable than a truck but with Toyota’s large number of SUV sales they can afford it.