Serious question:

mike clements · Posted: Sun Dec 23, 2012 4:28 pm Post subject: Serious question:

Some of the NYSE, Nasdaq, etc type news I am reading or listening to, tells of impending economic doom. Crashed stock market, etc. So, let's say the stock market takes a big dive and millionaire investors lose their shirts. Even casual investors who invested 10% of their earnings from their corporate job lose what they invested. What effect will this have on the sport of karting.
Will we go on like nothing happened ?
Will we slow way down and only the very wealthy can play ?
Will only those poor folk like me keep playing with backyard karts and stock clones ?
What are your thoughts ?
thank you,
Mike
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Benn Herr · Joined: 18 Jul 2001 Posts: 1579

People won't travel as much.

When they do, it will be for events they like only, series and points wont matter.

Local racing will change a little. No more new kart each year, same for engines.

Kid kart/junior classes will see the most change. Fewer motor homes in the pits, fewer test days, less work for "tuners".

Other than that, it's a great time to be a kart racer.

Still the most value for your money in racing.
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John Kuntze · Posted: Sun Dec 23, 2012 6:58 pm Post subject:

If you don't have the money anymore you can't race.
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John Mulvihill · Posted: Sun Dec 23, 2012 7:27 pm Post subject:

On the other hand, it will be a great time to invest.

Buy low, sell high is the key to success in the stock market.

Doomsday prophets have been around forever. I am waiting for things to hit a bottom so I can buy some more and profit.

T'is the way its always been.

People who sell when it hits a low are guarenteed to lose. Worry about the brokers who profit when you buy or sell stocks. They win no matter what, you lose.

John
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Charles Kaneb · Posted: Sun Dec 23, 2012 9:56 pm Post subject:

That's pretty much exactly what happened in 2008-early 2009.

The Dow, S&P, etc fell 50%, business earnings went negative, private lending and investment stopped cold, revolving loans got called in, and commerce broke down in general. American GDP dropped 5+% in a single year.

(skip this part if you don't want a "The Lounge" style discussion) The U.S. Gov't saw revenues fall by hundreds of billions of dollars per year and automatic expenditures go up by hundreds of billions per year more - and in order to get commerce working again rapidly would have needed to pour in well over two thousand billion in a single year; they didn't and got a slower recovery as a result. Some other countries didn't attempt to and saw an uncontrolled spiral into a depression, with tax revenue falling to such an extent that the "money saving" measures ended up costing considerably more than they saved. We eventually got lucky and got simultaneous booms in oil/gas and alternative energy technology.

Kart counts in Senior Rotax went from 15 to 4 in a matter of weeks. Expansion plans got cancelled. New tracks got delayed. Some tracks sold for pennies on the dollar or closed. Overextended dealers and importers dumped inventory and stopped supporting classes. Pricing schedules went out the window - either tracks tried to keep the entry count high by going too cheap or tried to keep revenues high by jacking prices way up. Neither way worked.

Surprisingly, we couldn't get ANY car racers to "trade down" and go karting, even with discounted rental deals. We couldn't get inactive kart racers back in with cheaper classes and harder tires.

Oh. One more thing. I cancelled a kart purchase and a car purchase and bought stocks. The S&P 500 went down to 675 and I plowed a bunch of money into index funds while it was below 700. It's now in the low-1400s. They say to buy low and sell high - but hardly anybody ever does it because everyone thinks that the latest crash really will be the end of American business. I figured that if total economic collapse did happen it didn't matter whether I had cash on hand or not, so it was time to buy.
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Charles Kaneb · Posted: Sun Dec 23, 2012 10:08 pm Post subject:

One more thing.

Kart counts are an EXCEPTIONALLY sensitive "coincident" business indicator.

People skip trips to the track if they think they may have a slowdown or layoff at work in a few months. Employment changes usually lag behind production changes by a few months. If you want to know whether upper-middle-income people think business is going well or not these past few weeks, check to see whether you've got more or fewer than the last race. Obviously, this is a fairly noisy indicator (a rainstorm does not mean a depression), but a few really good weeks get karts out of garages and a few really bad ones get them mothballed.
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John Mulvihill · Posted: Mon Dec 24, 2012 9:21 am Post subject:

Oh. One more thing. I cancelled a kart purchase and a car purchase and bought stocks. The S&P 500 went down to 675 and I plowed a bunch of money into index funds while it was below 700. It's now in the low-1400s. They say to buy low and sell high - but hardly anybody ever does it because everyone thinks that the latest crash really will be the end of American business. I figured that if total economic collapse did happen it didn't matter whether I had cash on hand or not, so it was time to buy. [/quote]

Yup. Charles understands how it works. When people were running in circles pulling their hair out, Charles, calmly, doubled his money.

John
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I bowl overhand..........

Dan Haynes · Posted: Mon Dec 24, 2012 10:54 am Post subject:

Best time to buy is when the market is weak. Same goes for just about anything. Buy low, sell high!
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Walt Gifford · Posted: Mon Dec 24, 2012 2:50 pm Post subject: Re: Serious question:

The track will raise it's fees.

Gif Cool

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Cory Ross · Posted: Mon Dec 24, 2012 7:53 pm Post subject:

I do not let the market dictate when I go to the track or not. If I paid attention to the market I would not be near as well off as I am now.

Stop worrying about the stock market and the wealthy and do things in your life that you have control over and you will be much better off. To many people react to what the stock market is doing and let it influence their decisions when the market plays no part. If everyone stopped worrying about what companies that have no effect on their lives were doing, we would be better off and the market would not have nearly the influence it does.

ted tucholski · Posted: Mon Dec 24, 2012 9:06 pm Post subject:

Mike, the market goes up and the market goes down. You can make money either way. The sad part is the general public doesn't understand that concept or knows what options they have. If you think the market will crash then buy the SH - S&P 500 short or the RWM -Russell 2000 short or maybe the DOG - the dow jones short. If the market goes down all of these ticker symbols will make you money. If you get into the market you have to make sure your gun has all the bullets "options" it can carry.

Robert Lawson · Joined: 10 Nov 2001 Posts: 2219

In the event of a "complete crash" as you mentioned......you bet your a$$ karting will suffer!!!!!

Gas prices will soar, that ALONE has proved to be the demise of many Road Racing events in the recent past.

Not sure how local sprint racing will be effected but it certianly WILL be effected in some form.

6 months ago I came back to the indoor karting center after a 10 year hiatus. Back then the "Holiday Season" lasted from Thanksgiving right through the 1st of the year. 2-4 hour long corporate parties/rentals, morning to close, every bloody day!!!!! This "season" the office guys said to prepare....."it's going to be crazy" they said.....

It certianly wasn't what I was expecting (see above!), we were "busy" for maybe 2 weeks. The last 2 weeks!!!!! Nothing more than a 60-80 person gig for just an hour or so. We did have a 100 person gig that only had 50 or so show up. We did mostly 8-10 person GP's (practice/qualify/standing start final) and it wasn't start to finish each day.

Piece of cake in my 10 year old book!!!!!!!!

Things have changed top to bottom, thats for sure. Can it get worse???? You betcha!

RPM

Oscar Aguilera · Joined: 18 Jul 2001 Posts: 1614

yea...we have seen this before,

but imo this time we need to pay closer attention to jobs and manuf...because if we lose a bunch of jobs (again) and we dont manuf anything to make more money (instead of printing more)...the money circle will dry up..

in that case from karting to the top...racing will get a hard hit. harder than in the past.

we will need natural gas and oil production (once again) to save us. unless we have a war? i dont see anything else being manuf in the relative short time we need it to happen to turn things around. i dont think that is doom and gloom...just some reality of how things work, have worked, and continue to not work. something has to give and that my friends is the middle class...by definition....the weekend warrior that makes up the gird!!!

just my opinion

David Womack · Posted: Sun Dec 30, 2012 5:24 am Post subject:

In some areas, kart counts can actually pick up in a down economy. People that race cars, pull tractors, do monster trucks will find another avenue to try in motorsport. They will have kids who are old to race so they try karting. Here in the south, many dirt race cars get parked or sold during slow times and a few go to karts. There are many dirt kart tracks in the south that aren't on the national level radar.
Until we get spending under control(at the federal level) we will be in for a roller coaster ride. Mostly downhill. A total crash is in store for us somewhere down the road. We've reached the tipping point now where there are more receiving aide than there are contributing. A recipe for disaster down the not too distant road

Allan Dawson · Joined: 10 Jan 2007 Posts: 15

When watching most all media, just remember that "Good News Doesn't Sell". I find my life is better limiting what what I watch.

Like what Mark Twain said...." I've seen a lot of trouble in my lifetime, most of it never happened"
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