Postcards: Vultures, Momentum, and Car Vending Machines

It's too nice of a day for long-winded rants or chatter about valuations. So, let's keep it simple on Friday as we head into the weekend. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Vultures, Momentum, and Car Vending Machines]( It's too nice of a day for long-winded rants or chatter about valuations. So, let's keep it simple on Friday as we head into the weekend. [Garrett {NAME}]( Feb 23   [READ IN APP](   Dear Fellow Expat: Spring cleaning is complete. We’ve thrown away probably half our stuff, and we still own more than the Canadians down the block. I’ve said it before. I’ll say it again. When you hit this age, those prime work years where you put in long days… [There are no better things than these three (in order):]( - Canceling plans. Canceling plans is better than any chemical. In the Florida Republic, we embrace canceled plans. I wouldn’t even be upset if you canceled reading this right now. - Going to Sleep at like… 8:45 pm. Nothing is open here after 10 pm, except for the bar where all Industry Employees (bartenders/servers) go. I haven’t been out on a weeknight in forever. Feel free to cancel plans and call it a night. - Throwing Things Away When you have a kid, the best thing that can happen to your friends is that they have a kid of the same gender. That way, you can pawn all this crap off on them. --------------------------------------------------------------- While dumping stuff at the curb for all of the local scavengers, I parked the golf cart at the end of the driveway. I had to chase the dogs inside, and then I got distracted. It was 15 minutes later that a car pulled into my driveway. A man knocked at the door and asked if I was “giving away my golf cart.” Despite being a Bills fan, my golf cart is Ravens-themed… It’s mayhem down here. Make sure that you nail things down in the Florida Republic. Speaking of Cars It’s fitting that I wrote a story for LuckBox Magazine this week about the state of the auto industry and the future of Ford Motor Company (F) and General Motors (GM). You’re better off buying a two-year bond than owning either. But [I can make the case for Ford]( based on its Ford Pro program. That said… neither are companies I pay much attention to. Instead, from an academic standpoint, the stock that has fascinated me the most over the last three years is Carvana (CVNA). This company is bonkers. Americans are so lazy that they are buying cars from vending machines. I’m not a fan of Carvana’s business - at all - because it’s very clear that their cars are vastly overpriced when you assess Blue Book value. But… they basically said: We’ll bring you the car if you pay us more… and instead of putting in handling fees, we’ll roll it up into the loan. Carvana just reported a profit today for the first time. The stock traded at $360 in August 2021, as all the COVID-19 and at-home madness peaked. Just 13 months later, the stock traded at $4.00. Now, it’s up 583% in a year. There is absolute madness in this stock. But what I have noticed - [time and time again]( - is that this stock does VERY well when our Equity Strength Signal is positive. And with rising liquidity and plenty of momentum, it’s probably poised to move higher. This is also one of the most heavily shorted stocks in all of finance. Roughly 40% of the float is short - so with this earnings report and this momentum - it could get out of hand fast. That said… the next time momentum turns negative, expect the shorts to pile on again. The valuation will be insane when the dust settles at the end of the day. It may be even worse than NVidia’s PE multiple. The other thing: The repo men are coming with U.S. consumer credit challenges ahead. Auto dealers are starting to face a severe buyers market - and massive levels of oversupply. And interest rates are not going down anytime soon. I’ve repeatedly been on the record saying no cut until at least July. New York Fed Bank President John Williams today echoed that sentiment. “At some point, I think it will be appropriate to pull back on restrictive monetary policy, likely later this year. But it's really about reading that data and looking for consistent signs that inflation is not only coming down but is moving towards that 2% longer-run goal," he said. As I’ve said before… don’t try to short until you see the red in their eyes… [Or the red in our signals.]( With Global Liquidity strong… it’s a hard time to be a bear. I repeat that it’s time to take what the market gives you… I’ll be back tomorrow with an update on next week. I have some planning around a new project, and I will be writing a really interesting story (set for release in late March) about American surveillance. It’s a scorcher. Stay positive, Garrett {NAME} Florida Republic Secretary of Defense Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()