$33.61
0.55 (+1.66%)
Honda Motor Co., Ltd. (ADR) (HMC)
CAPS Rating:
The Company develops, produces and manufactures a variety of motor products, ranging from small general-purpose engines to specialty sports cars.
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With deflation rampant, people will soon learn that a dollar will buy more tomorrow than it buys today. That will drive spending on big ticket items like cars down.
Disclosure: I owned a put on HMC at the time of writing.
Yea honda will sell less for a time. The point is to invest for a more than 3 months targeted end point and on this honda is the winner in car companies.
Demand for cars is elastic in the short-term, but very inelastic in the long-run. Over the course of 1-3 years, fluctuations in income, deflation, inflation, whatever are less likely to affect car buying than other goods. Moreover, it's very clear that Honda will be around over the next 1-3 years, while other major car companies won't be. The longer consumers wait to buy a car, the more likely they are to buy it from Honda.