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Avram Fisher, Founder & Portfolio Manager of Long Cast Advisers, is a former equity analyst at CSFB and BMO covering industrials and business services. He has prior experience in private equity; as a corporate governance analyst; as a writer; reporter and private investigator; and as a lifeguard and busboy (I still clear plates when my kids don't). This blog is an open book of ideas about patient investing and about starting up a small-cap focused RIA. It is part decision-diary, part investment observations and part general musings. Nothing on this blog is a solicitation for business nor a recommendation to buy or sell securities. It is simply a way to organize and share thoughts with an expanding audience of independent, patient and talented small cap investors. www.longcastadvisers.com

Thursday, September 29, 2016

A Comparison b/t C&I loan growth and the ratio of multi family to single family housing permits

Been looking at a lighting company that gets half its revenues from multi-family residential new construction.

Though a different company than TAYD, both are exposed in some way to institutional or commercial construction.

This chart shows changes in C&I loan growth (commercial and industrial loans) - the blue area graph - via FRB layered on top of housing permit data, specifically, the ratio of multifamily permits (five or more units) to single family permits.

I think the takeaway is that multi family construction permits really ramp relative to single family later in a cycle, and that there was a period of under building of multi-family units during the housing bubble.

My sense is that business is passed the peak, at least for the current cycle (yes Virginia, there is a business cycle, no matter how skewed it may be by interest rate policy).

Or maybe slowing C&I loan growth is from uncertainty about future policy and rates, due to the election.

I'm not a macro-investor I just love comparing things.

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