idasuperman

How to prevent a (stock market) “speeding ticket”?

NYSE:AZO   AutoZone, Inc.
What causes (any stock) to get a “speeding ticket”?

Will the general stock market get a “speeding ticket?”

What companies are likely to get “speeding tickets”?

Many stocks have been trying to “avoid” (price or "price to earnings") speeding tickets by letting their price stay high and not do stock splits… however something doesn’t seem to be working… Stock splits can be effected in any number if ratios, but the most common are 2:1, 3:1, 3:2, 4:1, 5:1 and so on.

Most speedometers (on cars) max out around 140 or 160 mph. Its funny and ironic because this happens to be around when many stocks “stop and split” at a (magic) price point of about “100”? Even though most REAL cars aren't designed to go that fast (above about 70 mph)? So the truth is that the average modern car is limited to a safe top speed of around 70 miles per hour or about 120 mph at fastest, and the VERY fastest cars can go about 200 but you will for sure get a speeding ticket if you speed above 70 and you will even go to jail if you your caught going too fast… but why dont stocks get speeding tickets for prices above 50 or even “100”?

The world land speed record, was set a long long time ago… on 15 October 1997, when “rocket propelled car” achieved a speed of 1,228 km/h (763 mph) and became the first land vehicle to officially break the sound barrier. This sounds a lot like the stock price of “google” or “tesla” or “amazon” but its the “real actual speed record?”?

One of my problems is that many of the stocks on the stock market including some Auto Parts companies like AutoZone that I would like to “invest in” have broken all the records all the “speeds” and need “tickets”… every stock in the last 10 years has broken all the rules. How is it even possible to buy stocks like Autozone (AZO) when the prices are above $1100 per share? Thats well above the maximum speed of ANY car ever – even which a “jet engine attached to the car” you can’t go that fast?

But the stock market says it can be that “costly”?

Certainly you can get arrested for driving that fast? But not if your buying and selling stocks?

Volume Profiles are one of the interesting ways to study a stock. In the above graph I’ve looked at Volume and Price at the same time. Its interesting because the volume around 2004 to 2008 is very helpful in tracing back the problems we have seen. Whats interesting about AUTO ZONE is that the price use to be about $75 and today its up above $1000. Autozone is trading like its one of those “amazon” stocks. In fact “most of the stock” history it was trading at about $75 up until about 2001 to 2009 the stock was priced between $20 to $120 and then recently the price jumped up to 1000+? (sorry thats $120 dollars per share not Miles Per Hour MPH).


One interesting “fact” is that Autozone has been around for 30+ years and didn’t see “any” significant “crash” during the serious crashes of 2001 or 2008 for everyone else. However, whats very strange is that Autozone did see a major crash in 2016 … when many if not all of the other companies in the stock market saw a crash.. in fact this “crash” in 2016 for the general stock market and for Autozone was maybe a “crash before the crash”. In a lot of ways the entire stock market was already slowing down before 2020 and was “expecting a crash” of 2020?

Whats really interesting about a business like Autozone or O'Reilly or really “any” Auto Parts local store is that you can go in and “ask a real question”. In a lot of ways this is a “new business idea” many new stores that are successful seem to be doing the opposite of “online” retail. For example, no one can really ask google or facebook a question anymore however one of the fundamental ideas for Autozone and O’Reilly Autoparts is that you can do a “computer diagnostic” of your car for “free” and the people working inside the store will often walk outside and take a look at your car with you “for free”. This could help us all personally think about “starting a new business” based more on the idea of “helping” and “helping others” just like they do at many of the Auto Parts companies in just about every larger sized town around the world?

Surprisingly the 2020 crash has hurt the airlines the most and also even Autozone? While in 2001 and 2008 AutoZone and their main competitor O’Reille didn’t really see any crash at all? However, looking at the stock you can see that for sure there has been some speeding and maybe even a “speeding ticket is a given”? Perhaps the "most interesting" time for Autozone's (volume) was around September of 2012. This was after the crash of 2008 and in the middle of one of the most significant changes in price at Autozone. Its interesting because I recently went to Autozone to get some new spark plugs, fuel filter, ignition coils, and break pads and also some "bar" for my suspension... however, next to autozone in both towns is a O'Reilly. The funny thing is that its like the fast food chain McDonands and Burger King but its with auto parts and they have them next to each other?

The good news is that after the crash of 2008... Autozones stock went up more then it ever went up... starting in about 2009... If all the stocks in the stock market "go up" a lot after the crash... what is the "speed"? In the small town I live in my rent is going up by about 10% and I hear from a lot of other renters that their rent is also going up... ? What are the key parts of the economy? Perhaps transport is one key and housing is the other?

Perhaps one of the most important (new ideas) in (modern) businesses like AutoZone is the idea of letting a customer ask a real question and even try and help the customer not just sell a product (like food, autoparts...) but also help the customer install the part for example or even barrow some tools and "go outside the store" (to help). This idea is “almost” true (in some of the worlds largest "new" businesses (last 10 to 20 years)?) at Home Depot where you can rent tools and however, they dont typically have “free tools” to borrow or a computer to “check your car” like a auto parts store.

Anyway! I need to prevent myself from getting a "stock market speeding ticket"... I really would like to look for some other ideas outside of "price to earnings" or (even worse) just "looking at the price and volume"... it maybe that one of the reasons some of the prices are so high is because people really like these companies... however, (its possible) that the smaller auto parts stores maybe will have a come back? Or even a new wave of "mobile online" auto dealers that come to your house and "buy all the parts online"... rent is expensive... and it maybe that the crash of 2020 will just make things be even more "online" which is kinda bad. Its nice to be able to have "real stores".

One of the most surprising things is that after the 2001 (9/11 crash and dot-com crash) autozone had one of its biggest "rises" in 2002. However, it wasn't until 2009 that autozone stocks really took off and "for sure needed" a speeding ticket?

Anyway, it will be interesting to hear other peoples ideas on transportation industry in general. Many of the recent parts I have personally purchased at the local store are "import" products made in the "east" ... I wonder if most of the companies rely on this idea of having their products manufactured not by their company "autozone" but by others and then relabeling. The problem is really fundamental because its also with foods and foods packaging. In some ways the "tractor" has changed a lot of foods industry.. However a lot of this is also "repackaged".. and its actually very difficult to grow food "outside" without significant "custom hoses" and "water irrigation" or even a green house... this is called hydroponics and is very interesting to see how "robotic" some of the farming process maybe is?

However, with autozone it seems like many of their parts (the brand name of many autozone parts are "Duralast") are not made by autozone but by manufacturing overseas? The quality of the break pads seems to be "okay" but I wasn't too happy with the "clip" on the back of the pad for instance however, I was happy with the quality of the "end links" that I got they also had a small hole to add grease during an oil change to the end link.

Whats worrysome is that all the products need to be shipped from overseas. Its "okay" to build products all over the world but it is wasteful on energy to build and then ship long distances?

As I recently was driving home in my car that I'm working on... I noticed a tesla pull out and I wondered to myself.. how much of telsa really was a "new idea" vs parts that are just "used" a lot of the parts like break pads and wheels need to be "standardized" so you can just easily get new break pads or wheels or even "end links" or fuel filters even for an electric car? However, the engine of a "telsa" is radically new... however is the light bulb? I dont own a tesla but the more I look at it the more I like it and the more I actually see fundamental design flaws paradoxes. The body seems to be very "plastic" and the entire car seems very light weight which is great in a lot of ways...

Anyway this is suppose to be about "speeding tickets" and "price"... I think a (price) speeding ticket is actually only a speeding ticket if you think really differently then everyone else in the stock market... however, its also important to "pick" interesting stocks that you can learn a lot from.

Anyway, I'm still new to a lot of this... and there are some suggestions for me to understand "speeding tickets" for now... it seems that the "price is right"... and its perhaps too high? However, what I'm seeing is that most speeding tickets in the stock market seem to "bring stocks" P/E ratios back to about 4 or 5... however, is there possible evidence that it should different?

Clearly I think most people would agree that also agree to the "speeding ticket" concept that 2000's (10 years) was "normal" and "2009+ to 2016" was "speeding". This was seen all over the stock market. However, the other idea is that it wasn't speeding and that "transportation" and "auto parts" was actually very important and the stock was "undervalued".. most people believe this idea. However, in 2016 there was a major crash... from the study I've done almost everything is showing that the 2020 crash is looking to be like the 2016 crash... and that in general the market is still looking for a way to "understand" the growth after 2009ish?

Anyway, I need to get back to some cleaning and a few other things... hope this helps!

:)

Anyway? ;)
Asher!




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