Street Capitalist: Event Driven Value Investments

When I start looking at investments, I keep in mind what is happening with the global economy. To be clear, I don’t let this guide my thesis. I wont wake up in the morning and see where futures are at or an interest movement and drastically change my investments. It is just another thing that I keep in mind.

One of the things I have been monitoring is the effects of gasoline. So far, things have not been good. While retail sales appeared to be up, upon closer examination the areas with the most stimulation were gas stations. Now, in today’s New York Times, we see some anecdotal evidence of a shift in spending.

For many people, higher energy costs mean fewer restaurant meals, deferred weekend outings with the kids, less air travel and more time closer to home. Big box retailers are suffering as customers balk at driving to the mall, airlines have slapped on steep fuel surcharges and carmakers have seen their sales slump. On Thursday, the Ford Motor Company announced production cuts because of sharply lower demand for sport-utility vehicles and pickups.

Adapting, With Gritted Teeth, to Higher Gas Prices (NY Times)

The article takes a bit of a populist bent, attacking our dependency on foreign oil - which I don’t necessarily agree with. I will say though that I see little reason for oil to fall anytime soon, which means we as consumers are going to be impacted as well. This could mean trouble for the casual dining and retailing sectors as a whole for the medium-term.