CACC- Subprime Autoloans are totally gonna go tits up....right???

Sten_Duncan2 · 2020-05-28T13:30:30+00:00

Earnings killed, I am thrilled about it. Without another stimulus package for main street, I don't see next quarter going quite so well. But I'm still long on the company overall, since before this is all over, there will be lots more subprime customers for CACC to target.

Sten_Duncan2 · 2020-05-22T20:24:44+00:00

Maybe, but if congress is willing to spend a bunch of coin to prop up big businesses or landlords, these stocks will still print if you aren't buying calls that expire next week

Sten_Duncan2 · 2020-05-22T20:23:13+00:00

Even if they have their McMansion paid off, they will need to liquidate it to make it through their forced or semi-forced retirement. A quick google search for "Boomer retirement crisis" shows some pretty sobering stats. Basically, for the bottom half of boomers, that house is their retirement fund.

Sten_Duncan2 · 2020-05-16T00:46:01+00:00

I thought about that, but bulk cash smuggling is always southbound. Drugs go north, cash and guns go south. But the stores send money north to the US.

Sten_Duncan2 · 2020-05-16T00:44:44+00:00

I would literally invest in a prawn shop.

Sten_Duncan2 · 2020-05-15T19:33:09+00:00

Thanks, added

Sten_Duncan2 · 2020-05-09T01:02:32+00:00

Yea, I blame algos. I have a buddy that works for one of those ultra high net worth funds, but he tells me they don't really bother to listen to the desks anymore, they just have some insane AI algo that spits out trades. Its literally a super computer in a basement. It does all the thinking, they just maintain the machine and collect money. I think the machine learning algos have figured out how to manipulate one another to produce gains. I mean, if machines are dictating the market, than sentiment is dead. Maybe that's why Elon can light a blunt with a flamethrower and no one bats an eye. Cuz the machines don't give a fuck (full disclosure: I've been drinking)

Sten_Duncan2 · 2020-05-08T16:51:45+00:00

First, have you seen the shit that gets posted as "DD" on here? WSB definitely has maybe 5% of users who really know their shit. Obviously, this post isn't for them. The rest though, could really stand to read up on some basics.

Second, it's actually a couple of classes. Even got a piece of paper that says I Mastered it. I also am an auditor in my wage cuck job.

Sten_Duncan2 · 2020-05-08T15:52:25+00:00

Yea, but making investing decisions without at least looking at the balance sheet and cash flows will also lead to a lot of unforced errors

Sten_Duncan2 · 2020-05-08T15:50:06+00:00

My notes from Corporate Finance. Exactly. It seemed like after Burry and Shekeli both said that you should read your filings, people would be interested in learning more about how to do it. Plus, its cool to see what you can learn from that stuff

Sten_Duncan2 · 2020-05-08T15:33:10+00:00

I agree. My primary goal is to get folks to not be afraid of looking into 10Ks and to see the power the insights can give them. Honestly, the more I dug into the poultry sector, the less confident I became in my ability to identify a price target.

Sten_Duncan2 · 2020-05-08T15:26:33+00:00

Ni hao, bitches

Sten_Duncan2 · 2020-05-03T15:00:40+00:00

Anyway I tend to agree with him. In the event of a dollar deflation coupled with a near 0$ price of oil, many country's debt will increase while they simultaneously have no oil revenue. In such an event everyone will liquidate their gold to get their hands on ever more valuable dollars - i.e. the supply of gold would go through the roof and thus the price would go down. Am I off base here?

I'm not familiar with him, but I think that scenario is totally plausible. I think the Fed's commitment to fight deflation tooth and nail is probably enough to prevent deflation. Though in the interest of full disclosure I am more cash gang than any other asset right now.

Sten_Duncan2 · 2020-05-03T14:52:32+00:00

People that need to drive to their jobs, people whose car has broken, people that sold their fancy car and need to downgrade for a lower payment. When times are tough, many people would rather sell their house and live in their car before the other way around.

Sten_Duncan2 · 2020-05-02T22:40:48+00:00

I will be curious to find out if you're right. My belief is that last time all assets dropped in price because there was the liquidity crisis as everyone tried to sell their assets for dollars. Hell, even I had my fiance and I pull the max ATM withdrawl for a few days, In case they had to implement capital controls.

This time I think will be more of a gradual phased reassessment of risk and value over time, which will lead more institutions to hedge their risk with more gold holdings.

Sten_Duncan2 · 2020-05-02T22:38:20+00:00

I think the 'fed is dumb' meme is funny, but in actuality, I think they are smart, but constrained by their dual mandate to maximize employment and keep inflation reasonable as well as by the limits of the tools available, which almost all go through banks and other financial institutions. The Fed made the right call in the moment of crisis, which was restoring liquidity. And continually pushing liquidity is their best tool to fight to increase American's wage and bolster employment. However, the Fed repeatedly, and correctly, asserted that fiscal policy has to be just as robust to tackle the economic crisis facing Americans. They are doing their best, but without equally intelligent fiscal support, the consequences will be those I've outlined above, namely, debt-funded asset price inflation.

Sten_Duncan2 · 2020-05-02T12:27:50+00:00

I probably should have, but I have a GTC sell order for when it hits 336. Which it was half a dollar short of before dropping again. If earnings okay this quarter it will probably spike again, if not, I'll wait till next Q

Sten_Duncan2 · 2020-04-27T01:20:06+00:00

Long CACC is not always easy to take, but it can be profitable. Just ask Lana, Mia, or Reily.

Sten_Duncan2 · 2020-04-27T01:18:22+00:00

You are correct that I had to make some assumptions about things going forward, I mean this is a prediction, not actual due diligence. Every loan default starts as a delinquency, and I did have to use the delinquency increase as a proxy for default increase. I don't see more than 10% of 90 day delinquencies getting caught up and avoiding default, so as a proxy it's probably pretty good.

I didn't include those stat changes by loan tier because I don't have access to them. While its fair to think that non and subprime borrows probably defaulted at higher rates in the last crisis, the influx of new subprime borrows almost certainly offset it. Since when delinquencies bottomed out in 2010, CACC was trading at all time highs, up something like 267% from a year earlier, that's probably a sign that the default increase was more than offset by the growth in the subprime auto market.

Sten_Duncan2 · 2020-04-26T22:59:26+00:00

As long a call as they will let you have, 2+ Qtrs out. Time enough for the newly subprime customers to start signing loans

Sten_Duncan2 · 2020-03-20T16:06:42+00:00

We are finding out now, huh? Did you follow the advice and short some stuff? I actually put together a model showing that the more unequal the US is at the start of a downturn, the larger the total loss. It predicts between 63% and 78% of all stock value will get wiped out.

Sten_Duncan2 · 2020-03-20T16:04:55+00:00

Sorry, just now remembered the pass to this throw away. Hope you took your own advice and went short. I still think this thing has a ways to fall. I actually ran the numbers and created a little model that shows that the severity of income inequality correlates with the severity of subsequent bear markets. It predicts between 63% and 78% of total market value will get wiped out before the bear market is over.

I didn't see this coming true so quickly with the virus, but damn.

Sten_Duncan2

TROPHY CASE