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Letter to the Editor

This article originally appeared in the December 2008 Issue of INSIGHT

More Good Grief, Charlie B.

Not a single U.S. Collision Repair Industry stock that we track in our monthly report is posting a per share stock price at or above its January mark. This week, financial analysts have announced that the country has been in a recession for a year already. I sure would have appreciated that heads-up a bit earlier than now!

Dismal economic news has cropped up everywhere I turn. Black Friday consumer sales were off. Nervous companies laid off over 350,000 employees in November. In INSIGHT’s hometown, Cleveland’s oldest bank, National City, apparently cannot be saved despite the earnest efforts of our Congres-sional members. The heads of GM, Ford, and Chrysler are pledging to cut their own enormous salaries down to one dollar a piece for 2009 as a condition of receiving bailout money from the government.

National car dealerships are crashing badly at the Dow again this month. Sonic Automotive is almost 83 percent down from its initial mark of $19.41 per share. If an investor is feeling daring, one can pick up shares of Sonic for three dollars and change a pop. AutoNation, CarMax, and Penske Automotive are doing a little better per share than Sonic, but not by much. All of their per share stock prices are down nearly 60 percent YTD.

Of our refinish paint manufacturers, Sherwin-Williams is out ahead of the pack, with a price of $54.50 per share, down, but only by five percent YTD. Valspar, at $17.29 per share, is off its New Year mark by about 23 percent. Both DuPont and PPG shares are going for about one third off their January postings. Akzo Nobel’s per share price is only half what it was at the start of 2008.

Insurers are getting clobbered on Wall Street, too. Allstate’s per share stock price of just over $27 is just about half of its posting on January 1st. Progressive and Travelers per share stock prices have gone down about 25 percent YTD.

I cannot imagine any big upward trend on Wall Street or in the economy at large in this last month of the year, especially with a new president and administration coming onboard in January. Within the next week or so, I am pretty confident that some type of funding will be granted by Washington to the Big Three car manufacturers. Too much is at stake to delay. The impact of failure in Detroit throughout the national economic structure would be devastating.

Good Grief! Enough doom and gloom. I look forward to a prosperous 2009 for all of us. Happy New Year to All!

-Charles Baker-

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