Auto Sales -- 2024

See this post.

CNBC here. 

My not-ready-for-primetime reply to a reader who sent me the story about auto sales increasing year-over-year:

As an investor, it's always about a) volume; and, b) margins. If you sell 4% more vehicles y/y but your margins decrease significantly, one's profit (all else being equal) will fall y/y.

So, the question is this: "did Ford have to do more discounting in 2024 to increase sales?"

And the answer is, according to google AI:

Also, need to compare with overall market. Earlier from the blog:

All numbers need to be fact-checked, but in very general and in some cases, very round numbers, number of vehicles sold in the US by these manufacturers, 2023:

• Toyota: about 2.8 million vehicles
• GM: about 2.6 million vehicles (an increase of 14% y/y)
• Honda + Nissan: about 2.2 million vehicles [Honda, 1.3 million; Nissan, 0.9 million]
• Honda: an increase of 33% y/y
• Nissan: an increase of 23% y/y
• Ford: 1.9 million vehicles (an increase of 7.9%)
• Hyundai Kia: 1.65 million vehicles
  

That was 2023. But two data points stand out.

33% increase y/y/ for Honda; 8% increase y/y for Ford.

And if y/y (2023/2022 was 8%) and then this y/y (2024/2023 was 4% ....

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The big story, of course, the EV is dead in the US and its prospects don't look better with Trump in the White House. As Dan Rather would say the future of EVs in the US is slim, slim just left town.

https://www.theatlantic.com/magazine/archive/2005/03/rathers-familiar-quotations/303736/

Ford (F) is still paying an incredible dividend. And it certainly appears that the dividend is propping up the share price: https://www.nasdaq.com/market-activity/stocks/f/dividend-history.

 

P/E: 11.

Market cap: $40 billion.

3Q24 Economic Numbers -- Much Better Than Expected -- PCE -- The Fed's Favorite Inflation Number -- December 27, 2024

 https://x.com/StockMKTNewz/status/1870099697227936006.

https://x.com/LizAnnSonders/status/1870101394620850431

https://x.com/LizAnnSonders/status/1870101292690936060

https://x.com/LizAnnSonders/status/1870101189767114974

 

Berkshire -- Update -- December 27, 2024

Link here.

Warren Buffett’s Berkshire Hathaway has increased its overall stake in VeriSign VRSN, a provider of Internet domain-name registry services. 

Berkshire Hathaway insurance unit Geico and pension plans of other Berkshire Hathaway businesses bought a total of 143,424 VeriSign shares from December 20, 2024, through Tuesday, December 23, 2024, for a total of $28.5 million, an average price of $199.05 each. 

Geico added 14,921 of the shares to lift its investment to 7,920,402 VeriSign shares, while the pensions bought 128,503 shares to boost their stake to 5,272,947 VeriSign shares.

Overall, Berkshire Hathaway now owns 13,193,349 VeriSign shares, according to a form Buffett’s firm filed with the Securities and Exchange Commission. 

It remains the largest shareholder with a stake of more than 10%.Berkshire Hathaway didn’t immediately respond to a request for comment on the stock purchases. 

VeriSign stock has been flat so far in 2024, while the S&P 500 has surged 25%. 

Shares have badly underperformed the index in recent years as well. Since the end of 2019, VeriSign stock gained 6.6%, while the S&P 500 has soared 86%. Berkshire Hathaway also bought more VeriSign stock earlier this month, along with shares of Occidental Petroleum and satellite-radio firm Sirius XM Holdings.

American Credit Card Debt -- December 27, 2024

American credit card debt:  

• As of the third quarter of 2024, the average American's credit card debt is $6,380, which is a 5% increase from 2023. 

From CNBC today:

 In general this would not include borrowing costs associated with housing and transportation.

Apple's $20-Billion Problem -- December 27, 2024

Breitbart headline: Apple desperate to defend mega-payout from Google in antitrust case (https://www.breitbart.com/tech/2024/12/27/apple-is-desperate-to-defend-mega-payout-from-google-in-antitrust-case/).

"Everyone" has known about this issue for decades. 

My hunch: Apple has planned for that contingency, a ruling against the arrangement.

Apple's annual revenue: $400 billion.

Apple's annual income: $100 billion.

The $20 billion (or whatever it is now) comes in as "revenue."

$20 / $400 = 5%.

Unfortunately, one assumes there is very little cost to this "revenue," thus suggesting the revenue drops to the bottom line as income.

$20 / $100 = 20%. Ouch.

So, yes, this is a big deal.

My understanding is that this is an issue of a "monopoly." Apple has an exclusive agreement with Google.

Such cases do not play out well in the EU and are likely not to play out well in the US.

If that is the case, that Apple needs to "open" its search capabilities to other search engines, my hunch is that, though cumbersome, Apple will slice and dice that opportunity, charging each search engine provide a fee for allowing Apple users to use a particular search engine. 

One reason Google likes this arrangement, Apple and Google set a price to which they both agree. But neither really knows what the free market might bring. My hunch: in total -- more than the $20 billion Apple currently gets. Some search engines would not be able to compete, and others that want to get in on this lucrative arrangement may be willing to pay more than what Google has been paying.

Even better, Apple is going to cash in on ChatBots / AI. "Search" as we currently know it goes away. I'm now using AI on a regular basis which is much better than search for answering specific questions. 

But Apple has bigger issues.

Here are the revenue and income charts for Apple.

It's pretty obvious Apple has a bigger problem than losing the $20 billion mega-payment from Google.

But this is the real problem with regard to the $20-billion payout.

A reader calculates that this payout works out to $ 1.32 per share at today's numbers, if accurate:

• 1.32 / 260 = 0.005 or 0.5%. 

Chickenfeed.

This problem is the headline. 

"Apple Loses Mega-Lawsuit; To Cost Apple $20 Billion Annually."

That will spook investors and the share price won't drop $1.32 / share. The headline will drive the Apple share price down $13.20 / share. 

A buying opportunity, if I ever saw one.

US Voter -- 2008 -- 2021 -- Financial Times Data -- December 26, 2024

Link here.

Previously posted:

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The Book Page: Re-Posting

America's Red Shift: Now Who's On The Wrong Side Of History

Essay by Charles R. Kesler, editor of the Claremont Review of Books.

Claremont Review of Books, Fall 2024, p. 6.

Six-page essay on the Trump-Harris campaigns and outcome.

The essay leads up to Obama's famous "on the right side of history" speech in which he originally suggested that those on the right side of history will eventually win because it's the right side of history.

But, now, with the outcome of the 2024 presidential election he has changed his speech slightly. "The right side of history" is not a given to win out. For the "right side of history" to win out, "we must will it to win."

"The right side of history" is not a given. In fact, it may not even be the "right side of history."

His argument leads up to a very fun piece of writing, page 12:

Though he didn't use that demographic argument in his speech to the DNC in Chicago, Obama still looked forward confidently to building "a true Democratic majority." Someone ought to endow a prized and name it after Obama -- the Barack Obama Prize -- prize for being painfully out of touch with your own country. 

He (Obama) should receive the inaugural trophy. He could display it alongside the Nobel Prize he got in 2009 for bringing peace to the world. Trump and the MAGA Republicans are now in the process of assimilating working-class voters, including young black and Hispanics, supposedly elements that "true Democratic majority," into a new Trumpian movement that may form, in time, a new Republican majority party.

 

Consider Hispanic voters. Exit polls showed Trump winning about 55% of the Latino male vote. CNN reported a 42% swing toward the Republicans from 2016 to 2024. And it wasn't just en. Support for the Democrats among Latinas, according to CNN, dropped from a 44% advantage in 2016 to a 22-point advantage this year.

 

The Los Angeles Times interviewed some of Trump's Latino supporters. "Why am I for Trump?" asked Tomas Garcia, who supported him in 2016, 2020, and 2024. "Because I'm an American first of all." 

The70-year-old's great-grandparents emigrated from Mexico. "Hispanics are about the American dream, said Abraham Enriquez, 29, who was raised by the children of Mexican immigrant parents in west Texas.

"Trump being a billionaire from New York, with a beautiful family and a beautiful wife, as a young Hispanic man, that is the American dream, that is what you one day want to be like."

Michael Fienup, an economist who studies Hispanics, commented, "Latinos are hard-working, they're self -sufficient, they're entrepreneurial, they're patriotic, they're optimistic. Guess what? Those are fundamentally American characteristics."

Nvidia -- Continues To Attract Investors -- December 26, 2024

Link here.