Timing & trends

MarineMax, the largest boat dealer in the US, has seen its stock jump from ~$8 to $58 per share since March of 2020

Posted by Zachary Crockett / the HUSTLE

on Tuesday, 23 March 2021 7:28

 

People bought boats like crazy last year.

The pandemic has had a devastating impact on car and airplane sales.

Between travel restrictions and reduced domestic mobility, dealerships and major manufacturers in both sectors have seen some of their biggest dips since the Great Recession.

But out on America’s waterways, another mode of transport has thrived…

Boats are booming

According to a report by the National Marine Manufacturers Association (NMMA), sales of boats and related marine gear hit $47B in 2020 — a 9% bump from 2019, and a 13-year high.

Per Boating Industry, all types of big-boy water toys saw a bump in 2020:

  • Freshwater fishing boats and pontoons: 143k units (+12%)
  • Personal watercraft (Jet Ski, Sea Doo): 82k units (+8%)
  • Wake boats: 13k units (+20%)

Who’s buying?

Experts say this trend has largely been buoyed by first-time boat buyers, many of them on the younger side — a demographic that hasn’t historically been the industry’s strong suit.

As it turns out, boating enthusiasts aren’t as niche of a community as one might expect. Per NMMA:

  • 100m Americans report going boating every year, making it one of the most popular outdoor recreational activities in the US.
  • 61% of boaters earn <$75k in household income/year.

Collectively, these boaters make up a $12B/year industry — and ~4.3k boat dealers exist to cater to their needs.

Why boats?

Boats weren’t the only form of recreational transport to spike last year: Bicycles, RVs, and electric scooters all sold like hotcakes.

But boats in particular seemed to benefit from a perfect storm of more flexible remote work schedules, travel restrictions, and timing (boating “season” is generally considered to run from April to October, which coincided with 2020 lockdowns).

The only people having more fun than the boaters themselves are the people who bought boat-related stocks last March.

 

Texas Freeze Creates Global Plastics Shortage

Posted by IRINA SLAV

on Tuesday, 23 March 2021 6:52

 

First, it was a demand slump across pretty much every manufacturing industry because of the pandemic. Then a surge in demand for electronics caused a shortage of microchips, which hit the automotive industry particularly hard. Now, the Texas Freeze has caused a global shortage of plastics. The Wall Street Journal reported this week that the cold spell that shut down oil fields and refineries in Texas is still affecting operations, with several petrochemical plants on the Gulf Coast remaining closed a month after the end of the crisis. This creates a shortage of essential raw materials for a range of industries, from carmaking to medical consumables and even house building.

The WSJ report mentions carmakers Honda and Toyota as two companies that would need to start cutting output because of the plastics shortage, which came on top of an already pressing shortage of microchips. Ford, meanwhile, is cutting shifts because of the chip shortage and building some models only partially. GM, on the other hand, has started building some pickup trucks without a fuel management module because of the shortages, which will affect the fuel economy performance of these cars.

Yet, the automaking industry is just one victim of the abnormal circumstances on the planet and the Gulf Coast. Another is the construction industry. The WSJ reports, citing industry insiders, that following the petrochemical shutdowns, builders are bracing for shortages of everything from siding to insulation.

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Good to Know

Posted by Michael Campbell

on Monday, 22 March 2021 9:17

Real Interest Rates vs Nominal Rates – the difference between borrowing and lending rates (nominal rate) minus inflation = real rate.
ie 5 yr bond annual interest rate is just over 1% per year – you then subtract the inflation rate, 1.1% = real rate of negative 1/10th of 1%. In other word, if inflation stays the same bond holders lose 1/10th of 1% per year of purchasing power. Not a good time to lend (buy a bond) but a good time to borrow because borrowing money costs 1% per yr in interest but buying power of the money you pay back with will be 1.1% less.

(P.S. for gold owners – note a strong inverse correlation between gold and real interest rates. When real rates up, gold prices tend to drop)

STAT OF THE DAY

Posted by the HUSTLE

on Monday, 22 March 2021 9:00

 

Which tech firms hired the most last year? According to The Information, the companies that increased head count % the most were Zoom (+74%), Amazon (+63%) and Twilio (+59%).

A few cybersecurity firms (Crowdstrike and Cloudflare) and work productivity firm Atlassian round out the top 6.

These hiring sprees come as the entire tech sector saw employment fall by 1.5% from February 2020 highs, according to the Bureau of Labor Statistics.

On an absolute scale, Amazon dwarfed everyone. The ecomm giant added 500k global employees — or, per The Information, “113 Zooms.”

 

March Madness Gamblers Expected To Break $8.5 Billion Record Thanks To Mobile Sports Betting

Posted by Will Yakowicz FORBES

on Monday, 22 March 2021 6:50

With online gambling now legal in 25 states, the 2021 NCAA tournament will be a slam dunk for gaming sites—and the friendly office pool may never rebound.

Bob, a 34-year-old gambler from Illinois who works in logistics, has bet in his office March Madness pool for the last five years. With about 75 colleagues and a $25 buy-in, the pot will be just under $2,000 for this year’s NCAA men’s basketball tournament—but he’s not filling out a bracket.

For gamblers, the office pool has lost its luster. “It’s boring—I’d rather gamble other ways,” says Bob, who did not want to give his last name. “For Betty Sue, who runs the front desk, does she like the office bracket? Of course, she does; she’s not a gambler.”

March Madness is always big action for Bob, who says he lays out about 25% of his annual $20,000 bankroll during the three-week long, a single-elimination, seven-round college basketball tournament. This year, he’s placing bets on mobile betting services like DraftKings and Barstool Sports. Bob will also wager with his go-to bookie, a longstanding relationship he has decided to keep despite his access to legal options.

He is not alone. According to a study published by the American Gaming Association this week, the number of Americans—36.7 million—filling out a bracket is down 8% compared to the last NCAA Tournament in 2019. (March Madness was cancelled in 2020 due to the Covid-19 outbreak.) About 31 million Americans are placing more traditional bets on this year’s tournament, up from nearly 18 million in 2019.

“Brackets bring in about $2 million,” says DraftKing’s Johnny Avello. “I can’t tell you what March Madness will bring, but it will be exponentially bigger.”

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