Stock
I was checking GM's stock price the other day. I check it every so often but recently, I've been doing it more because its been on a nice rise (from $19 to $26.50 a share) over the past few months. The market has decided to appreciate it again after GM's major plans to turn the company around. You can check out the stock here.
As I was saying, I was checking out the stock the other day and maxed out the chart (it goes back beyond 1965) and something struck my eye. It was the giant dip in 1975. This got me thinking -- wasn't the gas shortage around that time? So, I decided to dig a little deeper and found some statistics on the average gas prices for the past 35 years (the data I found was for California -- which can be found here)
As anyone can see, GM's stock price greatly decreased whenever gas prices shot up. The stock took a dive in 1975, 1982, 1992, and once again in 2006 as gas prices, adjusted for inflation, are almost at their highest. The average price of gas in 2005 was $2.47 while it was $2.50 in 1982.
I just thought it was some interesting data that I would pass on. Ford and Toyota showed similar patterns as well, although I couldn't find any data for Toyota prior to 1993.
Perhaps what's good for General Motors is good for America as the saying goes ... and vice versa.
Tags: Gas Prices, GM, Auto Industry, & Stock Market
posted by Aventius @ 4:14 PM
4 comments
4 Comments:
Very interesting analysis.
You know gas prices are all preception. This weekend (Memorial Day), gas prices in the Detroit area went down! I paid 3.05/gallon to fill up the Corvette with Sunoco Ultra (94 octane). One month ago, 87 octane Sunoco was 3.29 per gallon. On Memorial Day, 87 octane Sunoco was 2.71 per gallon here. Two weeks ago, I paid 3.49 per gallon for Regular in Stamford, CT. State taxes may account for some of the variance, but who knows the real truth? I'm convinced that E85 is the only short term solution.
Through it all, sale of Full Size Utilities remains strong!
I believe that E85 is a type of "answer" to our gas problems. In that it could provide a supply of fuel that will compete with gasoline. Our high gas prices are due to low supply and fear of problems in the middle east.
Its true that E85 will get poorer mileage but that doesn't mean that we shouldn't use it. Everything gets less mileage than gasoline but that doesn't mean we should be sitting around with our thumbs up our asses. The beauty of E85 is that ethanol can be used or gasoline can be used whenever which is cheaper as long as the mixture in the take is at least 15% gasoline. The 15% mixture of gas is required in cold temperatures so that the ethanol doesn't become to vicous.
E85 is no savior. We can't go transfer to a ethanol based economy. The amount of corn needed to fuel our vehicles would require 70% of the US farmland, which isn't going to happen. It won't fix our long term problems but it is a nice short term fix that when adopted, will bring regular gasoline prices down.
Its all about bringing competition to the marketplace.
BTW, E85 fuel is much cheaper than gasoline. When approximated for the fuel economy difference, its price is on par with gasoline.
There's also the issue of reducing our dependence on foreign oil and the fact that its a renewable resource and despite when naysayers have said, it does not take more energy to manufacture than it produces (i can provide information for this if necessary).
Lastly, E85 creates jobs in the US.
Oh, and the "distribution problems" you've mentioned.... thats crap. Its a matter of not using certain materials and using other materials. its a matter of using different materials in the tanks and pipes. Its not a real problem. Gasoline engines and tanks, converted to E85, had the same "problem" that took almost no time at all to fix. People who say there are distribution problems are A) looking for a reason to say NO or B) really cheap distributors.
Like I said though, E85 isn't our fuel savior but its not useless. When used together with out existing gas economy, E85 will help the consumer.
So...sell the stock short? Only if gas prices are gonna keep goin up i suppose.
I'm inclined to think this is more coincidence than anything. look at 1990 to 2000...the price increased dramatically but gas prices remained fairly stable. I too think it would be interesting to see Ford and some of the Japanese manufacturers compared in a similar manner. Sales volume vs. gas price would be another interesting comparison.
Coincidence? I really don't think so. Every major decline coincides with major price increases.
Oh course yes, there are other factors involved as well but I think its pretty easy to see that there is a connection.
As for sales volume comparisons.... that'd be interesting but I'm much too lazy to set that up.
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