https://finance.yahoo.com/news/a-major-shift-in-the-economic…
snippet on the pattern
“Demand booms. Companies aggressively order or even over-order in order to ensure they have inventories. Then demand shifts. Suddenly fears of shortages and empty shelves turn into inventory pileups, gluts and disinflation.”
I hope you’re right.
I have noticed that after a while, they started to give away bottles of hand sanitizer and masks as party favors at the pharmacy counter.
intercst
“Demand booms. Companies aggressively order or even over-order in order to ensure they have inventories.
I remember when Broadcom issued an earnings warning, the day after Thanksgiving, 2000. One of the very few useful tidbits I ever heard reported on bubblevision.
Seems that the overflowing order books the semiconductor makers were reporting was from customers double, triple, or more, ordering, to increase the probabilities that someone would deliver on time. When fab capacity caught up, the overordering stopped. Order books, and semiconductor company stocks, collapsed.
Same was true in flash memory. Companies like SanDisk would see margins soar, for about 18 months, until fab capacity caught up with demand. Then margins would collapse.
Can’t help but wonder how long the automakers will be able to keep the “chip shortage” narrative going, to justify their gouging? I have noticed that the local VW dealer is much better stocked than 6 months ago. There were times he only had a couple cars on the lot. Today, he has 22. Still gouging tho. The Taos is supposed to have a base price of $23K, but every example he has is optioned up to $31-$36K.
Steve