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State of the Boat Market?


CaptainMorgan

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5 hours ago, ahopkinsVTX said:

I’m not saying it’s not going to get tough and rough but this doomsday narrative has been spewed all of forum for two plus years now. Has some of it been true? Yeah, but it has never been nearly as bad as posted/predicted. I don’t know one manufacturer that is sitting on heavy inventory let alone light inventory. It’s still hard/impossible to find vendors that can supply on a pre Covid timeline for anything in our manufacturing business. Our net sales has been holding steady and our forecast from our customers is very strong. New programs are lined up, extensions in place for a lot of current programs. We’ll see. 
 

If the average joe becomes 20-40% poorer, we are all toast anyway. 

Don't think we're Doomsday end of world..  i think we're going to be something like 08

Mfgs are very heavy.. but not on finished sellable goods . They are heavy on many items but missing critical ones which is tying  up cash flow to be able to sell the  finished goods.. also due to lead times much of the cash tied up is in "ordered goods" not necessarily for finished goods.. it's killing companies cash flows with so much tied up that's not sellable at the moment.. 

 

2022 narrative is that sales dollar amounts are similar or up but unit qty is down along with margins.. granted not quite half way through the year so those qtys will continue to decrease significantly..

 

I'm curious: your net sales are similar but how much is your margin down? 

Lead times are absolutely getting longer on everything and not necessarily  cheaper this is stagflation.. 

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Interesting read through the thread so far.  A few things come to mind.  Locally car dealers have no inventory, ordering what you want is still 5-6 months for delivery and those heated seats forget it, no chips.  Housing around here is lacking inventory not buyers, still multiple offers above asking, surrounding neighborhoods don’t have many signs up.  Building for housing is booming, lots of multifamily, still can’t meet demand.   Major investment in new production plants (EV battery plants and EV production plants), and high tech, pharma etc are being announced and development for them has started.

Rational investment is driving the local economy not speculation

Chicken little lives on Wall Street.

Will the global economy correct it self, sure.  But we have seen this before.

Why would you spend billions on drilling for oil with a 5 plus year development time when Europe and other developed economies are looking at total EV sales by 2035.?  When Exxon is spending way more for buybacks and dividends than capital budgets for drilling something has to give.  Lordstown Motors largest investor is the Saudi Government, that tells you something.  Petroleum products will be pricey for the foreseeable future.  Thus, leisure is on the edge, RVs and boats come to mind.  I have both, better get an EV tow vehicle….  Lightening comes to mind.

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ahopkins22LSV
36 minutes ago, The Hulk said:

Don't think we're Doomsday end of world..  i think we're going to be something like 08

Mfgs are very heavy.. but not on finished sellable goods . They are heavy on many items but missing critical ones which is tying  up cash flow to be able to sell the  finished goods.. also due to lead times much of the cash tied up is in "ordered goods" not necessarily for finished goods.. it's killing companies cash flows with so much tied up that's not sellable at the moment.. 

 

2022 narrative is that sales dollar amounts are similar or up but unit qty is down along with margins.. granted not quite half way through the year so those qtys will continue to decrease significantly..

 

I'm curious: your net sales are similar but how much is your margin down? 

Lead times are absolutely getting longer on everything and not necessarily  cheaper this is stagflation.. 

If manufacturers are heavy, then they are over buying. Which we are a bit but not to the degree of being heavy. And on our margins? I don’t know. They are worse I’m sure because of raw material costs but a lot of that has been negotiated back to the customer which of course will go to the consumer. Not one of our customers (major oems for passenger car and commercial truck) are cutting orders or slowing future programs. It’s the opposite. It’s 125% full steam ahead. Granted I wasn’t working in 08, was finishing college, but I can’t imagine we’d have strong demand like this for this year and forecasted into next year and the next following. 
 

We were also at record record high in everything. It was going to stay that high. It was going to come down and level itself out. It always does.

Its like people freaking out that the Great Lake levels are down a foot or so from a few years ago. No one is paying attention to the fact that they are still well above historical average and apparently they already forgot they were crying about how high they were a few years ago. It always levels out

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Futures in freight/Truck leasing is crashing.. goes hand in hand with demand Same as RV market ... 110% accurate in downturn predictions.. how much of a downturn or recession will we go into who knows the FED May kick in bail out again.. they're obviously raising interest rates quickly so that they can go back to lowering them again so they have some tools in the shed.

Diesel shortages coming and $5-6/gal gas.. something is going to break.. 

Problem is avg joe is getting hammered..

CPI .. ie CP-LIE is way up when fed says inflation was 2% pre covid it was in real CPI terms 7% annually for a long time

Now it's 8+% which means in reality it's 28-30+%.

If you truely calculate inflation based on what avg person spends on things as a percentage of their income like housing/rent,  food, energy, insurance, etc basically what you really spend 80-90% of your income on it's well into 30%+ inflation... Maybe a 50" TV is not so much more than it was or possibly cheaper.. but you don't spend much on TVs on annual basis.. food gas energy insurance housing/rent are way way up.. rent alone nationally is 20-30% higher and for avg joe that's 30+% of their monthly paycheck.. so you can't say real inflation is only 8%..  i doubt anyone is only paying only +8% on anything they are buying over last year..

The hardest thing for people to understand is also the simplest the M2 money supply has grown by over 36% in less than 2 years at the end of the day how do you NOT end up with at least that percentage in inflation?... 

i mean gas alone is 210% increase in 2yrs or less.. not like people got a 2X pay raise in 2yrs..

Avg Joe is in debt and beyond broke.. 

We are is a darn energy crisis.. not good..not good.. energy is one of the highest % input costs of everything produced on planet earth.. 

 

 

 

 

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10 minutes ago, Pnwrider said:

Glad I read this, it’s been about 2 years since I saw the latest version of hulk saying the global economy is set to collapse. 

I don't know about total Armageddon collapse but surely a realistic restructuring and downturn from an unrealistic past 2yrs.. 

I mean after all they could just double the money supply again to kick the can down the road.. again! 

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3 minutes ago, The Hulk said:

I don't know about total Armageddon collapse but surely a realistic restructuring and downturn from an unrealistic past 2yrs.. 

I mean after all they could just double the money supply again to kick the can down the road.. again! 

Since my grandmother was born “they” have been kicking the can down the road.  If I recall correctly she was born well before you or I…. Try somewhere in the 1880’s…. Remember the gold standard?

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5 minutes ago, dlb said:

Since my grandmother was born “they” have been kicking the can down the road.  If I recall correctly she was born well before you or I…. Try somewhere in the 1880’s…. Remember the gold standard?

I read in a history book they kind of changed that good ol gold standard 😂

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2 hours ago, bigskydoc said:

It doesn't seem bad to people because we are at the peak of the market. Days before the '08 housing crash, you could walk into any bank in the country, and walk out with a NINA mortgage on your 3rd house. New construction was going full steam ahead, and construction supply companies were stocking and shipping at record rates. Seemingly overnight, all of that changed.

All the leading economic indicators are pointing to the fact that the long-predicted recession is finally at hand. The QE bubble is popping, and unless the Fed reverses course, and makes the bubble bigger, the pop is inevitable. It will be every bit as bad as the tech and housing bubbles. There will be a generational buying opportunity for those who are prepared to take advantage of it. 

JMHO

Agree there will be a HUGE buying opportunity soon, sadly most won't have the guts, or means to do so.. 

World's second largest economy is lowering rates due to lower demand which always preceeds what happens here .  Almosts like they already know whats happening...

Edited by The Hulk
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10 hours ago, dlb said:

Interesting read through the thread so far.  A few things come to mind.  Locally car dealers have no inventory, ordering what you want is still 5-6 months for delivery and those heated seats forget it, no chips.  Housing around here is lacking inventory not buyers, still multiple offers above asking, surrounding neighborhoods don’t have many signs up.  Building for housing is booming, lots of multifamily, still can’t meet demand.   Major investment in new production plants (EV battery plants and EV production plants), and high tech, pharma etc are being announced and development for them has started.

Rational investment is driving the local economy not speculation

Chicken little lives on Wall Street.

Will the global economy correct it self, sure.  But we have seen this before.

Why would you spend billions on drilling for oil with a 5 plus year development time when Europe and other developed economies are looking at total EV sales by 2035.?  When Exxon is spending way more for buybacks and dividends than capital budgets for drilling something has to give.  Lordstown Motors largest investor is the Saudi Government, that tells you something.  Petroleum products will be pricey for the foreseeable future.  Thus, leisure is on the edge, RVs and boats come to mind.  I have both, better get an EV tow vehicle….  Lightening comes to mind.

True, but they can't make anything.  Tons of money spent and still no product.  Similar to Rivian.  They have very little product commercially available.  Coming to market for many in the EV sector is taking FOREVER.  Look at Canoo.....great concept, but they lack the funds to bring it to market.  None of this, IMO, is particularly rational.  It's government fueled, and reactionary.  

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52 minutes ago, CaptainMorgan said:

I kinda do... the potential fuel bill of $3k+ is gonna register; not sure it'll change my wake-boat use, but is likely to affect some of my other boat-related spending (i.e. that $2k foil gets even harder to justify, surfing is plenty fun).  But i'm lucky in that i could choose to do whatever, its only levels of self-restraint. 

i'm more concerned for anyone who stretched to finance a boat over 20 yrs to get a ~$500-600 monthly payment and now is looking at a monthly fuel bill that could exceed their loan pymt.  Don't want to lose those folks from the community -- not just for short-term market value reasons, but they help to grow/support the overall industry/sport we at TMC sure do enjoy.

 

Agree.  I've always been in the camp of "I'll pay whatever gas is on the water for my family to be together" but I'm concerned about this season.  We have cancelled some camping trips and while our lake vacations are still happening, it's scary to think what a week's long trip is going to cost in fuel and food costs alone.  Our big vacation is 5 hours away and last year it cost $140 in truck fuel (round trip) and we averaged about $100/day in boat fuel.  So last year was about $850 in fuel.  I'm looking at over $1500 in fuel for our June trip + groceries and lodging increases.  We do two trips like this a year so I'm going to spend more on two weeks of vacation than my boat costs all year long.

I'm a business owner with little debt and cash on hand but the current market sure has me re-thinking our plans.  We elected not to do a Memorial Weekend lake trip because of the high costs and we will probably skip many other things in the very near future.  I knew we were on the brink of a bubble burst which was a primary reason to save some cash and go back to Axis vs a new Malibu.  We still enjoy the boat just as much and I have the extra $$ for a rainy day that's sure to come.

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I'm in similar boat above.. been fortunate, but quickly trying to cut back on as many extras or frivolous expenses as possible.. just going out to eat these days feels like 1.5-2X what it use to be, cutting that way back now. 

death by a million needles as they say.. 

 

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I know for me the gas prices aren't stopping me, but they might be slowing my down.  I have a crew of guys that are all willing to split gas costs (including drive to lake).  I'm lucky I have this group to weather it with me.  That said, right now it's $50 for 2 wakeboard sets.  So far everyone is still on board to ride 2-3 times a week.  We'll see how it fares through the summer, especially if gas keeps going up.

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In September of 2008, a week or so after Bear Stearns folded, I bought a brand new F-150 for roughly half off sticker. Let that sink in for a moment especially compared to what is happening today, F-150s selling well OVER sticker. Back then the United States and much of the worlds financial system completely froze up and collapsed, almost overnight. At work we held an “emergency” leadership team meeting in early January 2009 and I’ll never forget the our company owner saying “there is no business model or formula on what to do when your bank goes out of business”, which was exactly the position we found ourselves in. We (eventually) found a new bank and proceeded to triple the size of the company over the next 6-7 years.

The current problem is to much money in the system. Hulk is exactly right, the inflation we are experiencing was inevitable and stagflation is likely, for how long is anyones guess. Much will depend on the continuing level of manipulation of financial markets and the free flow of accurate information to the “average joe”. 2022 is a completely different world than 2008.

The recreational marine industry will ebb and flow with “lifestyle” discretionary spending. And, I heard this saying somewhere.

”The cure for high prices, is high prices”

 

 

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this has been such an informative thread.  I love getting everyone's take on the market and the industry as a whole.  you know the economy is crazy messed up when people are making money off selling their 5 and 10 year old boats!  but I do feel like wake boats are a market all their own. most owners that I know of that have a 5 year or newer boat either paid cash, or only financed  out of convenience not budget / necessity.  it will be interesting to see what takes place over the next 6-12 months for sure.  

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16 minutes ago, smuurph84 said:

this has been such an informative thread.  I love getting everyone's take on the market and the industry as a whole.  you know the economy is crazy messed up when people are making money off selling their 5 and 10 year old boats!  but I do feel like wake boats are a market all their own. most owners that I know of that have a 5 year or newer boat either paid cash, or only financed  out of convenience not budget / necessity.  it will be interesting to see what takes place over the next 6-12 months for sure.  

Meh, mine was a mixed bag. My initial budget (before actually understanding what a GOOD tow boat was) was blown out of the water once I realized how insanely difficult it was going to be to find a used SW ready tow boat. I put 25% down on a new build. I probably could have waited a year or two and paid cash for most if not all but the CFO kept trying to put a sunroom higher up on the list. 

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46 minutes ago, DFW said:

In September of 2008, a week or so after Bear Stearns folded, I bought a brand new F-150 for roughly half off sticker. Let that sink in for a moment especially compared to what is happening today, F-150s selling well OVER sticker. Back then the United States and much of the worlds financial system completely froze up and collapsed, almost overnight. At work we held an “emergency” leadership team meeting in early January 2009 and I’ll never forget the our company owner saying “there is no business model or formula on what to do when your bank goes out of business”, which was exactly the position we found ourselves in. We (eventually) found a new bank and proceeded to triple the size of the company over the next 6-7 years.

The current problem is to much money in the system. Hulk is exactly right, the inflation we are experiencing was inevitable and stagflation is likely, for how long is anyones guess. Much will depend on the continuing level of manipulation of financial markets and the free flow of accurate information to the “average joe”. 2022 is a completely different world than 2008.

The recreational marine industry will ebb and flow with “lifestyle” discretionary spending. And, I heard this saying somewhere.

”The cure for high prices, is high prices”

 

 

I vividly remember that time.......

We had a similar meeting at the company I was with at the time and while it wasn't about our bank going out of business, it was about how to deal with lost revenue from several large construction projects that just completely stopped.  We were told to stop, pack up, leave, and send the bill for what was done to date.  It was pretty crazy.  We made decisions to cut pay based on salary (Executives took 20%, Sr. Managers took 15%, Managers 10% and people under $50k/year took 5%) rather than cut people.  It all came back in mid-2009, but sucked nonetheless. 

 

This time around is different, yet no less severe.

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4 minutes ago, Slayer said:

Much will depend on the continuing level of manipulation of financial markets

It's nice to find someone out in the wild recognizing how screwed up our financial markets are. 

4 minutes ago, Slayer said:

We made decisions to cut pay based on salary (Executives took 20%, Sr. Managers took 15%, Managers 10% and people under $50k/year took 5%) rather than cut people

This is something I can get behind. The key is that it came back mid 2009, and from there you likely had a ton of extremely loyal employees.

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2 minutes ago, SmoothbrainA22 said:

This is something I can get behind. The key is that it came back mid 2009, and from there you likely had a ton of extremely loyal employees.

It did build loyalty.  2 years with no bonus or salary increase except getting back to where you were before the cuts.  2010 was a great year for the company and some of us saw bonuses between 60-75% of our salaries.  The company has since lost many of us who were integral to their growth, but that's another story........  

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Ebb and flow. This too shall pass.

There will be some market correction, as there always has been. Let's hope it's not too bad, but frankly we (the country) need it in some capacity. It will bring change in November I hope!  :-)

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