Your car may be more valuable than your portfolio is.
Jim Bianco says used auto prices are rising faster than other assets.
If you want to know what the best investment you probably had in 2021, it is that car sitting in your driveway or garage, according to the Bianco Research President. The stock market has appreciated more recently than some cryptocurrencies.
He is using the Manheim index of used car prices to build his analysis.
They have gone up in price more than 20% in the last four months. Over the last four months, that is more than the S&P. The latest set of data we have shows that they are going higher and higher. There is no peak as of now.
Over the past four months, the stock market has had a close. The S&P 500 is up 26% this year.
Bianco says there are two bullish drivers in the used car market. The first is people getting priced out of new cars because of the shortage of chips.
The Kelley Blue Book says auto prices are at a record high. The average price for a new car in November was $46,320, a 27% increase over the same month last year.
The second is people who want to flip vehicles.
There is a rush for people to buy used cars and a rush for people to speculate on them. It is only going to get more expensive now.
It is not your parents' auto market.
He said it has all the signs of a bubble. It is thought that used car prices are a depreciating asset. They are not supposed to go up in price. This year they have gone up in price by 50%.
Bianco thinks the auto price sticker shock is a bigger problem.
The Federal Reserve doesn't want to see this happen because it is a self-reinforcing idea about inflation.
The first inflation comeback in a generation may happen in 2021.
He thinks inflation will decrease in 2022, but it will be slower than people think. It is anyone's guess as to when the peak in auto prices will be.
This could continue for another year. Bianco said it could go on for two more weeks. The activity you are seeing is probably bubblicious.
There is no information about this
