Full Time RV USA Mini-blog

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Wednesday, July 10, 2013

The top in the RV market the moment we've been waiting for!

This is the moment we've been waiting for!

CNBC points to the RV BOOM. Now Comes the bust.

The RV market may hold up for another year or 2, but after the crash you should be able to pick up Class A diesel pushers for pennies on the dollar.

But don't take my word for it; just look at the trend.

 
 Of course we're likely to see another suckers rally off the bottom (if wave D holds true), but wave E of primary wave (B) may truncate (fall short), resulting in our final devastating wave (C), and possible bankruptcy filing for Winnebago. The lesson here is don't just blindly buy RV stock, just because you like the product. There are much bigger issues going on in the economy today than fads.

If you would like to learn how to protect your investments by selling the stock market through the use of leveraged ETF's, and bear mutual funds (which make gains as the market sells off) just as the pro's do; by all means join the 3Xtraders.com website, and be sure to drop me a line - if you have any questions. Use promo-code FREE (all caps) at sign up. I work only for donations, so it's imperative that I keep you on the right side of the trade.   
 

Rock My RV?

 
 
I'm sure many of you know Bret Michaels; singer for an 80's hair band called Poison, a TV series called Rock My World, and winner of The Celebrity Apprentice.
 
Bret has certainly made a name for himself, but this blog isn't so much about Bret, but what the theme of his latest project portends for the RV market.
 
Bret has a new show called "Rock My RV", in which he and his team of mechanics perform a complete overhaul an RV (each weak).

This show reminds me of the "Monster House series which became popular just as the housing market started to crash.  The premise of the MH show was to waste an obscene amount of resources, in order to perform some ridiculously extravagant renovation, in the name of grandiosity. If you've never seen the show you can check out an episode I've embedded.  

 
 
I found the MH show highly entertaining, but this show marked an extreme in decadence and the top in the housing market, just as RMRV is screaming "TOP" of the RV craze. 

This is the moment we've been waiting for!

The RV market may hold up for another year or 2, but after the crash you should be able to pick up Class A diesel pushers for pennies on the dollar.

But don't take my word for it; just look at the trend.
 
 
 Of course we're likely to see another suckers rally off the bottom (if wave D holds true), but wave E of primary wave (B) may truncate (fall short), resulting in our final devastating wave (C), and possible bankruptcy filing for Winnebago. The lesson here is don't just blindly buy RV stock, just because you like the product. There are much bigger issues going on in the economy today than fads.

If you would like to learn how to protect your investments by selling the stock market through the use of leveraged ETF's, and bear mutual funds (which make gains as the market sells off) just as the pro's do; by all means join the 3Xtraders.com website, and be sure to drop me a line - if you have any questions. Use promo-code FREE (all caps) at sign up. I work only for donations, so it's imperative that I keep you on the right side of the trade.   

 
 
 
 


Monday, July 30, 2012

Before you buy a new RV read this!



image courtesy of floridaoutdoorsrv.com


This is the time to sell an RV not buy one. 

While the median (fixed) home price has fallen nearly 40%, since the economic downturn, the price of an RV remains stubbornly high, and after doing a little homework, I have found some startling statistics concerning the current RV market.

I was under the impression that the retirement of the baby-boomer generation was responsible for increasing demand and stubbornly high prices, but the truth is shipment of new RV's peaked in 2006, and RV ownership remains at record levels. 1 in 10 households, aged 50 to 64, already own at least one RV, however, but the fastest growing group of owners is actually those aged 18 to 34 years! [source: accuval.net]


According to the declining birthrate seen since the baby boom of the 1940, and 50's, it's statistically impossible for the new generation of RV buyers to outpace that of their predecessors, so prices must fall. 

Demand for new RVs is closely related to the broader economy, and access to credit. The RV market has rebounded some 40% since the lows of 2009, yet according to Elliott Wave Theory (a proven and valuable tool in forecasting markets, and human behavior) this rebound only points to a dead cat bounce, and a subsequent, and much larger correction coming in the very near future. Timelines are difficult to predict, but it's typical for a market crash to be followed by a much longer period of consolidation (in what many may believe is a recovery).  My best guess for a market bottom is 2015, but I also think we could bounce along that bottom for a decade or longer. 

As followers of my financial blog already know I have already predicted that unsustainable medicare and social security costs (as a percentage of GDP, will bankrupt the country in 2013, and if chaos ensues you won't find me dry camping in a Walmart parking lot in an unfamiliar town.   


There are several factors which have held the RV market artificially high, and out of whack with the rest of the economy:
1. Recent government regulation of diesel emissions has resulted in a 20% increase in sticker price.


2. Passage of the American Recovery and Reinvestment Act, whereas RV dealerships were granted the ability to apply for federally guaranteed floor plan financing, where none could be found, due to "GE capital's decision to pull out of RV financing" [source: accuval.net] This program has since expired.

3. The Federal Reserve's ongoing inflation policy, has devalued the US dollar, so that the price on many goods appear to be rising.


If you think about it a Class A RV is nothing more than a small mobile home, that's given a fancy name, and exterior paint job, and fitted onto a truck chassis.  


Let's do the math:
2012 Freightliner CL120042ST-Columbia 120 (500 HP)  runs right around $90k
High end custom build mobile home runs $100K 
Fiberglass and paint $10k - $20K? 
Generator/inverter/batteries $15k 
Total: $235,000


According to MarketWatch.com "The national median existing-home price for all housing types was $189,400 in June (2012), up 7.9 percent from a year ago", and that includes the land by the way.


Given the immediate 20% depreciation applied to every newly purchased motor-home, I find it hard to justify paying more for an RV, than for a single family home. The price of your home may appreciate with market forces, while an RV will only lose value over time.

Recent media hype, and several TV shows seen pushing the RV lifestyle, also points to a top in the market. Once everyone is seen pursuing real-estate or any other boom, you had best run in the other direction. 

You often here that an RV vacation is far less expensive than other forms of travel, but that's only true if you factor out the cost of the RV itself, and the high cost of maintenance, and storage.  

If you're in the market for a used RV it's vitally important to see maintenance records, and thoroughly kick the tires. If you have any doubts pay for a thorough inspection! If "a house is a liability", a motor-home is a super-liability, and a luxury few can afford to maintain in an economic downturn. 


Sellers of older Class A's, may soon be required to retrofit their diesel motors, in order to meet new emission standards, and I suspect anyone who can't afford to do so will have their license plates suspended. Check your local regulations, and God help you if you live in California! 

Older RV's that sport tube TV's, outdated furniture, non-residential fridges, and other old technology, are already clogging the parking lots, so these will probably take the biggest hit.       

My plan is to wait for calmer waters, in a buyers market, and buy my dream RV for pennies on the dollar.