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Volkswagen:Position Changes: Difference between revisions
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Note: I already sold and repurchased 25% of the Volkswagen position on February 7. <ref>https://discord.com/channels/978370501237932092/1012303584446136380/1072635724865753189</ref> | Note: I already sold and repurchased 25% of the Volkswagen position on February 7. <ref>https://discord.com/channels/978370501237932092/1012303584446136380/1072635724865753189</ref> | ||
==== Additional Arguments: ==== | |||
<u>Pro selling arguments</u>: | |||
<u> | * Competition in China's BEVs market continues to grow.<ref>https://www.just-auto.com/features/competition-heats-up-in-chinas-ev-market/#:~:text=Competition%20in%20China's%20BEV%20market,production%20plans%20of%20their%20own.</ref> For instance, NEV cars sold by domestic brands accounted for 79.9 percent of China's overall NEV market in 2022<ref>https://discord.com/channels/978370501237932092/1012303584446136380/1069724474951348265</ref>. | ||
* Volkswagen said that it won't participate in BEV price wars initiated by Tesla in China. This means that its market share will likely diminish<ref>https://discord.com/channels/978370501237932092/1012303584446136380/1069985203000459274</ref>. | |||
<u>Magaly:</u> For a macro perspective I don't feel comfortable that one of a biggest portfolio position is in one of the most interest rate sensitive industries. Since it will be hit by both possibilities higher interest rates for longer or a recession. | |||
I know valuation is cheap compare to previous years, but is also a very different period this one compare to the last few decades: - Higher inflation (I have started to think inflation could be more structural, and we will need to fight it constantly) - High interest rates - QT - Extreme high debt All of these factors in my opinion makes all stock market valuations lower than what we were used to in past years, since I don't think we can continue to experience in coming years the growth and expansion we had, especially in financial assets, with these conditions. I also think that it will be a few years that passively investing will not generate the same returns that we were used to. On top of this the industry in facing a big structural change that will make the competition more challenging in coming years. You probably need to be 100% sure VW will be one of the winners in this transition for their innovation. | |||
Just a last point, from what I understand VW is dependent from their margins in luxury cars, if there is a recession later on, I think the luxury market could have the biggest hit, since luxury is a more discretionary market than the regular one | |||
== References == | == References == | ||