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THE
MAGNIFICENT SEVEN Background:
Big Auto Sarsaparilla – Hybrids, 30 mpg Toyota SUV, Healthcare Costs, Steel Costs, 25% Market Share and Dropping, Identity Crisis, Luxury Taxes, Fuel Cells, 100-MPG, Solar Panel Breakthroughs, Hyundai, Financing, Underfunded Pension Plan, Gasoline Prices, and a Rabbit driving a Foreign Import. Can the Stagecoach of yesteryear (1957) afford to be without an SUV Hybrid/Fuel Cell Concept Car (stay-tuned as we enter the final chapter)? One billion+ people in Asia may want to buy major ground transportation (or not) by 2012: Charts 1 - 5 show the Magnificent Seven (Weekly) Cycles as they look riding thru Big GM from a distant past and into the far future. The main “horses” are 36, 44, 52, 68, 95, 235 and 420-week cycles. Chart 1 shows the match of these seven cycles versus the actual closing weekly prices (detrended) for Big GM (Weekly) Closings from 1990 – present (April 2005). A friend of mine was married to a GM Vice-President (who retired early from the Stagecoach Line) and going into Nov 1999, it was suggested unloading the GM stock over a three-month period from Dec 1999 thru March 2000) based on the cycles peaking. How was such a suggestion possible (see Chart 2)? Chart 2 shows a rare and dangerous ongoing development in early 2000 (which was happening in virtually everything else at that time and it will happen again if we wait long enough for the Wall Street Wolfpack to come around again). Most of the significant cycles in GM were peaking from Dec 1999 thru April 2000 (time to exit stage left). Chart 3 shows the Magnificent Seven in GM from 2003 thru April 2005. The stock had another “major peak” in Dec 2003 and has been in a down trend since that time. Big GM has lost about 73% of its value from April 2000. For every job lost at GM, another eight or nine jobs are affected by sub-contractors. “What’s good for GM is good for the country” is an old slogan from decades ago. The Stagecoach To Purgatory (Oct 2005 – March 2007): Chart 4 shows the Big GM predicted from 2005-2007. It looks like a “bit of a rough go of it” from Oct 2005 thru March 2007 (have I heard this somewhere before?). If you are a GM stockholder, you may wish to watch out for something in this time period. This is ugly and it is predicted to get much worse thru early 2007 before possibly stabilizing. Can you say US Recession after Oct 2005, Mr G? This could be a long downhill ride. Chart 5 suggests that just when one would think about “GM going bankrupt” (Sept 2009) is for real, the Phoenix Stagecoach rises strangely out of some Chinese ashes and flies into 2010-2011. What a move – who would have thought it!? This move would contribute nicely to the coming Mayan Bear Rally, so we will tentatively schedule it for Fall 2009 (subject to change without prior notice so check the bulletin boards). Can you say: “Where is your 30-mpg SUV, GM?” Will anybody really want an SUV in 2012? Is that a bear paw on the hood of your SUV? “ Interesting how Sept 2009 as a date enters into equities in terms of coming significant moves. After the coming Olympics (2008) in China, maybe they will have a “Dragon Auto Coin” by 2025 depicting a Dragon riding a motorcycle ready to devour the whole world’s fuel cell car supply. On the back of the coin we could have a GM SUV with Fuel Cells heading South for the coming K-Winter. My! What big SUVs you have for a country with declining oil, Mr GoodWrench! Stay away from this stock for the time being. I had this vision of an elderly “Asian” gentleman riding a motorcycle in 2014 (it was not in Beijing). The nameplate on the motorcycle said “Coach by GM, a (tiny) Division of Chongquin Lifan Group”. As the man drove up to some type of medical clinic, he was stopped by a uniformed officer. The officer told him, “No Heathcare for you today, come back next week”. Later, some type of Big Court ruled in favor of the medical clinic stating: “Medical care is too costly to expend on the elderly who ride motorcycles!”.
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, the author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.
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The
Magnificent Seven is a chronicle about the adventures of
Longwave Cycles who rode onto the “western scene” many
decades ago (would that be in 1913?). In this episode, we look
at the weekly closing prices of Big General Motors (GM) from
1962 thru April 2005. Is this puppy on a long stagecoach ride to
Dry Gulch (circa 2014)? Toyota, Nissan and Hyundai seem to be on
track but where is this Stagecoach heading? The GPS transponder
is reporting this Stagecoach is heading steadily due South and
besides there is a Vulture flying overhead. Some of the old blue
chips are dangerous stocks and this puppy’s bonds are facing
“junk status”.
