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Re: 2005 and Beyond:The BEAR is BACK ?

Investor

Do you believe these profit downgrades are demand or cost driven?. I know that AMC have seen a rise in their costs of doing business, leading to the profit downgrade - but I don't know much about the others.

This forms part of my reasoning as to why we haven't seen a top in XAO in this cycle... yet.

This is really just my own thoughts and speaking in very general terms, but when you have had growth run such as in Aus, I would think a tell tale sign of the end is that in the chase for profits, businesses invest $$$ even when their expenses and costs of doing business are rising fast. Aus employment market is at full capacity (you have to pay more $$$ for the right person), and I know from the co I work for - any suppliers we use are at full capacity, suppliers have pushed up prices. Essentially this all leads to the cost of doing business rising - hurting the PL statement. Now ofcourse every industry has its own dynamics, I'm speaking generally.

To me this is not the scary part, the cost part of the equation is hurting businesses at this stage of the cycle - but from my view of the world, we haven't seen the demand side hurt....... yet. I think this is inevitable and will lead to the next recession soon (1 - 2.5 years).

I was talking to my hairdresser last night, she spends $9 per strand of hair for hair extensions, she gets 100 strands done. I said 'how long does this last for', answer 3 months. She said she pays for 100 strands every 3 months!!! I said 'how many people get this done', answer - out at the cubs/pubs she said there's heaps of girls with them!!!

Maybe I didn't hear it all right but $900 every 3 months!! I haven't seen people start to zip up their wallets yet, but when they do......

I need to find some companies that have demand 'locked in' get revenue from non discretionary spending and do well in a downturn... any ideas?

TJ

<blockquote data-quote="TjamesX" data-source="post: 10736" data-attributes="member: 193">Re: 2005 and Beyond:The BEAR is BACK ?InvestorDo you believe these profit downgrades are demand or cost driven?. I know that AMC have seen a rise in their costs of doing business, leading to the profit downgrade - but I don&#039;t know much about the others.This forms part of my reasoning as to why we haven&#039;t seen a top in XAO in this cycle... yet.This is really just my own thoughts and speaking in very general terms, but when you have had growth run such as in Aus, I would think a tell tale sign of the end is that in the chase for profits, businesses invest $$$ even when their expenses and costs of doing business are rising fast. Aus employment market is at full capacity (you have to pay more $$$ for the right person), and I know from the co I work for - any suppliers we use are at full capacity, suppliers have pushed up prices. Essentially this all leads to the cost of doing business rising - hurting the PL statement. Now ofcourse every industry has its own dynamics, I&#039;m speaking generally.To me this is not the scary part, the cost part of the equation is hurting businesses at this stage of the cycle - but from my view of the world, we haven&#039;t seen the demand side hurt....... yet. I think this is inevitable and will lead to the next recession soon (1 - 2.5 years).&nbsp; I was talking to my hairdresser last night, she spends $9 per strand of hair for hair extensions, she gets 100 strands done. I said &#039;how long does this last for&#039;, answer 3 months. She said she pays for 100 strands every 3 months!!! I said &#039;how many people get this done&#039;, answer - out at the cubs/pubs she said there&#039;s heaps of girls with them!!!Maybe I didn&#039;t hear it all right but $900 every 3 months!! I haven&#039;t seen people start to zip up their wallets yet, but when they do......<img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite9" alt=":eek:" title="Eek!&nbsp; &nbsp; :eek:" loading="lazy" data-shortname=":eek:" />I need to find some companies that have demand &#039;locked in&#039; get revenue from non discretionary spending and do well in a downturn... any ideas?TJ</blockquote>

[QUOTE="TjamesX, post: 10736, member: 193"] [b]Re: 2005 and Beyond:The BEAR is BACK ?[/b] Investor Do you believe these profit downgrades are demand or cost driven?. I know that AMC have seen a rise in their costs of doing business, leading to the profit downgrade - but I don't know much about the others. This forms part of my reasoning as to why we haven't seen a top in XAO in this cycle... yet. This is really just my own thoughts and speaking in very general terms, but when you have had growth run such as in Aus, I would think a tell tale sign of the end is that in the chase for profits, businesses invest $$$ even when their expenses and costs of doing business are rising fast. Aus employment market is at full capacity (you have to pay more $$$ for the right person), and I know from the co I work for - any suppliers we use are at full capacity, suppliers have pushed up prices. Essentially this all leads to the cost of doing business rising - hurting the PL statement. Now ofcourse every industry has its own dynamics, I'm speaking generally. To me this is not the scary part, the cost part of the equation is hurting businesses at this stage of the cycle - but from my view of the world, we haven't seen the demand side hurt....... yet. I think this is inevitable and will lead to the next recession soon (1 - 2.5 years). I was talking to my hairdresser last night, she spends $9 per strand of hair for hair extensions, she gets 100 strands done. I said 'how long does this last for', answer 3 months. She said she pays for 100 strands every 3 months!!! I said 'how many people get this done', answer - out at the cubs/pubs she said there's heaps of girls with them!!! Maybe I didn't hear it all right but $900 every 3 months!! I haven't seen people start to zip up their wallets yet, but when they do......:eek: I need to find some companies that have demand 'locked in' get revenue from non discretionary spending and do well in a downturn... any ideas? TJ [/QUOTE]

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