“It's all in the mind.”
― George Harrison
From, Business Insider-
Mercedes-Benz just reported the best six months of sales in its history, with deliveries through June up 13%, to more than 783,000 units. Although sales in its German home market were flat over the period, buyers in the company’s other key markets turned up in droves:
No surprise here they have a brand. When you think about buying a car you know a Mercedes it's reliable, enduring reputation in engineering and some style.
But there are other car's that are also reliable (LEXUS) but no one wants to have a LEXUS unless it's much cheaper. Why is that? Because Mercedes built a reputation and we trust a Mercedes. No surprises.
The important thing to keep a brand is no Surprises and no discounts. If they have a reputation for quality if they did a campain with big discounts that would hurt the Brand.
Only inferior products need to do discounts. I guess that is the way the mind of must people work.
I don't know if Mercedes didn't hurt the Brand a bit with Class A, it's a small car and Mercedes is a CEO car. Never confuse the prospect.
On the same subject last here
In Japan you can borrow at almost zero for the past 10 years and GDP, Real Estate & Stock's have moved zero! 10 years ago Nikkei was at 15,000 and now is still at 15,000.
Why when rates stay at zero the economy stall's, why?
a)Joseph Schumpeter believed that wealth and growth is created as capital moves
from weak hands to strong hands. This cannot happen if capital has no cost. We
have seen this in Japan, where zombie companies can survive forever, thanks to
cheap capital injections, and prevent the re-allocation of scarce resources (land,
labor, capital…) to managers best able to maximize returns. In Schumpeter’s
world, the willingness to let inventions/more efficient operators kill obsolete
businesses is key to societal progress. (From Gave Kal, The High Cost of Free Money)
b)People who have savings and were used to make a good living from getting money from deposits (My Mother) now live with much less money. What do they do, cut big time on expenses.
So once the market get's used to low rates the economy & the stock market is going to stall. However in Germany & in the US 10 year rates are still falling and that helps the market. I guess as long as the graph is from the upper left to the lower right stocks can climb a bit more.
Once you get to zero everything is going to stop.
