✨ Value Investing Substack NEWS - 6 Charts on How PSR Changed Rail
McDonald's $42B Real Estate Empire, US Retail Returns Returns, Robinhood Deal Rumors Quelled, PLA's Rotating Door of Generals, G7 Raises $600B To Counter Belt & Road, Malaysia's Chicken Problem
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I was the corporate pricing manager for Wendy's from 2010-2012, so as a professional pricer seeing this thread go viral, I can't help providing some corrections.
The most basic thing to understand about fast food pricing is that a successful store needs to run at ~30% food cost
C. Katsfoter, Burger Stalinist🔻 @primarycatdad
> Let’s first get oil out of the way. The primary thing people focus on when discussing inflation. Since it was a major contributor to inflation in the 1970s. And demand is pretty inelastic. Nominal oil prices went up more than 10x from 1970 to 1980. Adjusted for inflation, they went up about 5x (source)
Oil as a % of GDP went up from about 2% in the late 60’s to as high as 11-12% in 1980. Not hard to see how that can create double digit inflation.
Currently at $110/barrel, we are at 4% of GDP. With demand being less inelastic today as working from home, going electric and using Zoom is much more of an option than in the 1970’s. And we are still below the highs of 2010-2013.
> So my overall feeling is that these inflation fears are very overstated. And that things will normalize in 2023-24. The market is generally not a good predictor here. It panicked about crashing oil prices in 2016, about Trump, then changed its mind quickly. It panicked about Brexit, about the trade war, about Covid. In hindsight these were all great buying opportunities if you just looked at the numbers, instead of buying into narratives.
LINKS
Stock Markets:
Just keep your returns: Stores weigh paying you not to bring back unwanted items
Hyundai Quietly Climbs the EV Sales Charts and Elon Musk Notices
Apple ready to bargain with its first U.S. store to unionize: source
Macro
ASEAN:
Asia:
China to create yuan liquidity reserve pool with BIS, Malaysia, four others — PBOC
G7 aims to raise $600 billion to counter China's Belt and Road