"Funny," our Wall Street expert, SHW shareholder and lead paint watcher observes, "the stores here were and are packed this weekend. Maybe the profits will be down because of the price cuts but I don't anticipate a disaster. A cottage industry seems to have sprung up preaching doom and gloom along with the gospel of frugality. That industry may be thriving but I don't view it as making accurate calls."
Then our financial markets genius goes on to discuss what he opines is a paradigm shift. Jump below.
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Our Wall Street Expert, off the record:
"There is going to be a paradigm shift - there has to be - in how the auto makers market cars. They will migrate or simply leap into a buy-and-build system. That will cut inventory as well as the massive cash needed to pre-build in order that dealers had a 100 cars on the lot. We will be going to a dealer or some kind of middleman facility [perhaps online], order the car, and have it in 7 to 10 days. Yes, this is will global.
"In that the paint and coatings companies like Sherwin-Williams will be in the sweet spot. They will have a booming industry to supply around the world. Think of all that pent-up demand as people like you with your 2003 Ford with 81,000 miles start to believe in the economy again. You will order a 2009 whatever. Some lucky paint and coatings company will be the vendor for the fit and finish on your new car. Now, don't you feel good already just anticipating your cool driving experience.
"In addition, house repaint and repair will be going up, probably sooner than later. Plus with mortgage coming down I sense that we will see a positive change in new home sales and re-sales. More pent-up demand. This is the age of affluence and we're not going back to austerity. As soon as people begin to become less afraid they will long for a better or new nest.
"Of course, the lower oil costs came at the perfect time - for autos, paint/coatings, all of us except maybe the oil companies. Not only will consumers be consuming more. Manufacturers will be spending less to produce their products. The paint industry sure uses plenty of oil. And that killed it for a while.
"As things improve, bank liabilities go down. Capital restraints lessen. Loans go up. And the costs of everything drop because oil is down where it was 3 years ago.
"To be more specific, I see stability in the first quarter and some upward movement by the second."
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Our financial markets guru ends his Thanksgiving-weekend message with the disclaimer "Only the shadow knows." But he seems authentically confident. He and his wife did some heavy-duty shopping.