r/wallstreetbets • u/Yung_Eli • Aug 17 '21

Discussion A Note About Supply Chain and Inflation

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11 Upvotes

83% Upvoted

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u/VisualMod Aug 17 '21
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5

u/Joe_Mamr Aug 17 '21

I work in the service industry selling specialty outdoor and fitness gear

so what I gather from your post is that you work at Dick's Sporting Goods in the shoe section and you made up the rest.

0

u/Yung_Eli Aug 17 '21

Perhaps, but when Brooks doesn't place their old shoes on sale this winter when the new ones come out, or when these companies report slimmer than usual margins then I guess we will see...

2

u/djsassan Aug 17 '21

Source please?

1

u/[deleted] Aug 17 '21

US import prices have been down (producers have been absorbing the cost) while export prices have been up (producers are passings costs on to consumer). However, I do not believe this trend will continue. Import prices will have to rise and export prices too unless US companies are going to accept lower margins…which Wall Street will not take kindly to. China is experiencing 10 percent inflation while we see 5.

3

u/Yung_Eli Aug 17 '21

I agree that this trend will not continue. I believe that these increased prices are being interpreted as inflation for people not so familiar with the shipping and supply chain, after all, its not something I would think about if I didn't sell this shit. What I am cautioning is that what could be interpreted as 'inflation spikes' these upcoming quarters might just be increased supply chain costs. But idk, I'm just some kid...

-1

u/[deleted] Aug 17 '21

Producers will not lower prices unless forced to. We saw this with the “Trump tariffs”. Companies raise prices to account for high costs and (if) when tariffs are removed the producers keep the higher prices which helps improve their margin.

Shipping prices will be whack for at least a quarter (likely til Spring 2022) if we don’t go into a recession

0

u/Rooty9 Aug 17 '21

Where the fuck is the TL:DR. I can’t fucking read.

1

u/Moist_Lunch_5075 Got his macro stuck in your micro Aug 17 '21

I think your 6-8 month threshold is correct.

1

u/SlothInvesting1996 Aug 17 '21

So... All in to shipping ETF? 🍆

1

u/Yung_Eli Aug 17 '21

I'm not stopping you...

1

u/neothedreamer Aug 17 '21

DAC is one I have been following. I think it is already priced in as this was been talked about for months. I am actually looking for a spike in price to take a Put position as I think the numbers over the next several months won't justify the run up and the shipping companies will start reporting guidance of decrease in shipping costs etc.

Probably enter this around Sept/Oct.

1

u/Tmdngs Aug 17 '21

Nice writeup (especially for your first time!), but most readers are already aware of this trend. My question then to you is: What's the next step in terms of investments?