Stock market analysis: the lesson of automobile stock research!

I studied the auto industry for nearly two years and found that I had a negative return on my portfolio.

In the trillions of dollars in the auto industry, there is no good business and long-term good target on the whole.

It took me nearly two years to prove that Barr was right to say that wheeled is not a good business.
Other people make money, and I earn the following experience:
First, the car is essentially a bit similar to the business of TO B, the unit price is on the high side, consumers buy more rationally, and the space to pay for the pain point of demand is small, but tends to cost plus pricing.

The long-term trend in the price of cars of the same quality is downward.
As to why the price of the house is higher but the business model is better, I guess it may be because people are social animals.

Cars can be used to pick up girls, but you have to rely on the house to have a son.
Anyway, the price is the embodiment of the relationship between supply and demand, the price is better than the downward business for a long time;

Second, the R & D investment in front of the automobile enterprise can not guarantee the profit harvest behind, and the sunk cost is serious.

Customers have little loyalty to car brands, and individual models may be popular, but this is not predictable and sustainable.

This is similar to making a movie, that is, the audience will not go to the cinema according to the producer, even if it is to see the big director and star, it is often a pile of bad films;

Third, in the long run, free cash flow is relatively poor, constantly to R & D investment to capital expenditure, and now out of the trend of intelligent electrification to subvert, making greater uncertainty, more sensitive factors.

Not only the cash flow of the main engine factory is not good, the parts are worse, the voice of the channel is weak, and the turnover rate of the post-market is very low.

Basically, evaluating a business model is good or bad, I think cash flow can be used as a key indicator of judgment, but where cash flow continues to be good business, continuous poor must not be good business;
Fourth, there is no financial scale effect in the automobile industry from a long cycle. when the gross profit margin rises and the cost rate decreases during the period, it often does not reach the break-even point.

Once there is a certain scale and profit, the long-term trend of gross profit margin can not rise but show a downward trend, and the cost rate can not decline during the period.

When it comes to investment, it is equal to making a short and medium term according to the explosion point of the new car cycle, and it is difficult to predict whether the key will really erupt.

Fifth, because the automobile industry chain is long, the market scale and the influence are big, receives the policy intervention also to change greatly.

In this year's trade war, tariff cuts and an increase in foreign ownership of joint ventures are typical, and the impact of such policies on individual carmakers could be fatal, creating greater uncertainty about research and investment.

To sum up, I make introspection, the car stock can only be seen as a lover, not a long-term standard or high-end.

When there is a strong feeling, short-term masturbation can not be everywhere affectionate together ah.

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