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Last week was another brutal one for Rivian shareholders and I know Wall St. is mercurial, but I've been struggling to understand it.

So far as I can tell, there hasn't been a ton of reasons to decide one way or the other on this company. The news that Amazon would buy vans from Stellantis wasn't great, but shouldn't be the reason the stock is still getting hammered more than a week later.

This article seems to lay the blame at Ford's feet. This relationship has really proven to be a mixed bag, I think. With Ford beating GM to dump money in early, but later cancelling the plan to build vehicles using Rivian's platform, and now signalling that it's planning to sell off its stake.


What do you guys think, is Ford's involvement in Rivian been good, or bad?
 

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It basically has nothing to do with Rivian. For years, we have been living in a world of Irrational Exuberance. There have been irrational bubbles in the past (e.g. tulips), and they have all eventually popped. I think we are in the death throws of the current bubble.

The following is a copy of a post I made in the “Rivian: Buy the Dip?” conversation a few days ago.
“If you can get 70, my take would be to take it. I'm expecting a very severe decline in the general market over the next two months. (I'm withdrawing my 45 to 50 target price for Rivian as I now think 45 won't hold.)”

Rivian (the company) is sitting in a sweet spot. They got their money from the IPO. The money (in cash) is now sitting in a bank account. I hope they use it wisely as they are not going to get another chance to get more.

As for Ford, it was good for both parties. Rivian got seed money to get off the ground, and Ford has a large paper profit. (I think they still own their stock.) Just how large their paper profit is depends on if they bought put options to protect their paper profit.
 

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What to expect in the stock market - and in the price of Rivian stock. The following is my own “hypothesis”. There is no guarantee that my hypothesis will be accurate, and there is no way that anyone will “know” what will happen in the stock market.

The basic assumption is that we have been living in a financial bubble that has been growing for at least a decade as a result of “easy money guidance by the Federal Reserve”. The current price inflation is a consequence of the Fed “guiding” a rapid expansion in the money supply – especially since 2020. See M3 for the United States for details. The classic cause of price inflation in the economy is “too much money chasing to few goods”.

Historically, “bubbles” have always popped sooner or later – and our current bubble will probably not be an exception to the “but this time will be different” excuse.

Typically when bubbles pop, the stock market catches pneumonia. The current market decline is probably not over with steep declines likely to follow. Today’s (Jan. 24th) market looked like a typical “buy the dip” false (sucker) come-back rally.

The best way to play a bear market is to take some time to decide what a good value for a given stock price might be, and submit your buy order while prices are still declining. (If you wait for a rally, you are very apt to get caught by another false rally.)
 

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What to expect in the stock market - and in the price of Rivian stock. The following is my own “hypothesis”. There is no guarantee that my hypothesis will be accurate, and there is no way that anyone will “know” what will happen in the stock market.

The basic assumption is that we have been living in a financial bubble that has been growing for at least a decade as a result of “easy money guidance by the Federal Reserve”. The current price inflation is a consequence of the Fed “guiding” a rapid expansion in the money supply – especially since 2020. See M3 for the United States for details. The classic cause of price inflation in the economy is “too much money chasing to few goods”.

Historically, “bubbles” have always popped sooner or later – and our current bubble will probably not be an exception to the “but this time will be different” excuse.

Typically when bubbles pop, the stock market catches pneumonia. The current market decline is probably not over with steep declines likely to follow. Today’s (Jan. 24th) market looked like a typical “buy the dip” false (sucker) come-back rally.

The best way to play a bear market is to take some time to decide what a good value for a given stock price might be, and submit your buy order while prices are still declining. (If you wait for a rally, you are very apt to get caught by another false rally.)
Great insights. My uneducated 2 cents is not to expect Rivian's path to mirror Tesla's. Tesla was\is in a unique situation and considering their head scratching stock price ( at least if you believe in fundamentals of stock valuation) I don't see any other auto manufacturer's stock price reaching those highs any time soon unless they come up with something very revolutionary that investors are willing to pay for. Hint hint, EV's are not revolutionary especially now that Legacy manufacturers have all woken up and all have short and long term mass production plans for EVs that most consumers don't consider ugly or impractical.
 
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