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Letter to the Editor
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This article originally appeared in the August 2010 Issue of INSIGHT

Prickly Heat

Well, the “Dog Days of Summer” have brought most of the nation some very hot and sticky weather during these last few weeks of the season. Unfortunately, nothing seemed to heat up on Wall Street this month. The Dow was off barely a hair from its January posting, but the mood at the Stock Market was kind of - I hate to say “depressing” - so let’s say prickly, as in prickly heat, that annoying itchy rash you can get when it is too warm and humid.

Refinish paint manufacturer Akzo Nobel per share stock price improved somewhat from last month’s nearly 20 percent downward plunge. At $57.85 per share, Akzo is still almost 14 percent below its New Year’s price.

Our other refinish coatings manufacturers, DuPont, PPG, Sherwin-Williams, and Valspar, all continued to warm up this month, with Sherwin-Williams again leading the paint pack at $71.73 per share, but significantly lower than last month’s impressive $77.92 per share price. DuPont, PPG, and Valspar, while still in the black, were all off a bit from last month’s marks.

Our national car dealership groups have had a blood pressure rising summer - and after such a lovely first half of the year. The Penske Automotive Group per share price fell again this month. Its per share price of $12.43 is almost 19 percent lower than its January price per share. CarMax fell farther behind, dropping nearly 22 percent YTD to $19.14 per share. Sonic Automotive’s per share price slipped almost 15 percent YTD, to $9.09 per share. AutoNation continued its lone national car seller climb to mark a per share stock price of $19.87, a tiny two percent above the vehicle retailer’s January price.

Progressive has really heated up at the Dow this month. The insurer’s per share price, at $20.11 is almost 12 percent above its January spot, Allstate sank a little more this month, dropping to $29.01 per share.

I have been reading about what is called the Hindenberg Omen, an esoteric and complicated forecasting of potential Stock Market misfortune and mayhem. If you’re interested, you can Google it and get all sorts of hot and heavy summer reading material - and I do not mean like a trashy romance paperback. I was developing a bad case of prickly heat reading about it, but I did discover that the Hindenberg Omen has a roughly 25 percent accuracy rate, so I am inclined to think I could get predictions just as close to truth from reading my tea leaves.

-Charles Baker-

 

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