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> where carrying costs create a structural price disadvantage for incumbents. Very interesting. Got any ideas?
by DenisM 9y ago
> where carrying costs create a structural price disadvantage for incumbents.
Very interesting. Got any ideas?
- motohagiography 9y agoI admit it was a bit of an afterthought. :) If we are in a world of rising interest rates, it suggests upward cost pressure downstream of companies who exploited the low interest rate environment to load up on cheap debt. Hypothesis would be companies and sectors with highest debt to income ratio would be most vulnerable and point us in the right direction. A quick google search showed utilities were indeed the ones with highest debt ratios, followed by "industrials." If this were all true, might also suggest that merely equity financed companies could exploit that structural differential. It's part of the reason I am still a tesla/musk believer, as I think this is his underlying play.