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Airstream Classic 33FB

Airstreams. I love them. Lorraine doesn’t understand my passion for these trailers. She thinks that they are too small for full-timing and not at all practical for us. She is right. We would have a hard time squeezing everything we have with us now into this trailer. Okay, we would never be able to squeeze everything we have with us now into an Airstream.

Airstreams have a timeless, classic design and they last a long, long time. Much simpler to operate than a Class A motorcoach and, in several areas, more technologically advanced than our current Class A motorcoach.

Not well known is the relationship between Airstream and Thor. Thor was founded in 1980 when Wade Thompson and Peter Orthwein acquired Airstream. Yes, Thor began as Airstream.

There are two Airstreams at our park, one of them a new Classic.

My favourite model is the Classic 33FB. Priced out at around $230,000 CAD (before tax), it is an expensive trailer. I’ve seen lightly used ones selling for much less. Lots of great features which you can find detailed at the Airstream website here. Nice floor plan.

And here is a video walkthrough of the Classic 33FB from Airstream.

RV Shipments Keep Sliding

This cannot be a good sign for the economy:

The RV Industry Association’s April survey of manufacturers found that total RV shipments ended the month with 40,243 wholesale shipments, a decrease of 15.2 percent from the 47,442 units shipped last April.

All categories of towables and motorhomes were down for the month.

Towable RVs, led by conventional travel trailers, totaled 35,718 units for the month, a decrease of 13.7 percent compared to last April’s total of 41,411 units. Motorhomes finished the month with 4,525 units, down 25 percent compared to the April 2018 total of 6,031 units.

Through April, RV shipments have reached 140,219 units, down 24 percent from the 184,528 units at this point last year.

RV shipments are typically a leading indicator of a pending recession. Best to avoid investing in companies like Thor (52-week high of $110 and trading now at $56), Camping World (52-week high of $27 and trading now at $11) and those companies that are heavily exposed to the RV industry.

From the Atlantic:

RV sales turn out to be a pretty good predictor too: When RV sales are doing well, the economy follows; when RV sales tank, the economy is soon to tank too… The RV industry has repeatedly fallen in advance of more widespread economic troubles.

Everything’s Coming Up Daisies

Research and Markets, claiming to be the world’s largest market research store, has just released their report on the Recreational Vehicle market in North America. Their analysts forecast a pretty substantial rate of growth between 2018 and 2022 for the RV industry, a compound annual growth rate of just over 8 percent.

I did not have a chance to read the report because they want to charge me $2,500 for a single user electronic version. I did, however, get their overall message of continued growth.

The report covers the following companies:

  • Camping World Holdings
  • Forest River
  • Gulf Stream Coach
  • Northwood Manufacturing
  • REV Group
  • Thor Industries
  • Winnebago Industries

Several of them are private. Of the ones that are publicly traded, this is what their stock prices have been doing over the past five years.

Camping World is a leading outdoor and retailer and includes brands like Good Sam.

REV Group is recently listed and not without some controversy. REV Group builds American Coach, Monaco, Holiday Rambler and Fleetwood.

In June of this year, Johnson Fistel launched an investigation into potential violations of federal securities laws by REV Group to determine if the firm issued misleading business information to investors.

I’ve written about Thor before as they are a powerhouse company in the RV world. They cover a lot of brands including Airstream, Bison, CrossRoads, Cruiser, DRV, Dutchmen, Entegra, Heartland RV, Highland Ridge, Jayco, Keystone RV, K-Z, Redwood RV, Starcraft RV, Thor Motor Coach and Venture RV.

And the last publicly traded company highlighted in the report is Winnebago. I’ve written about them here when they recently acquired a boat company.

How do these companies stock prices line up against the S&P? For the most part, pretty closely:

Perhaps the RV industry will continue to grow at 8 percent CAGR from 2018-2022. As an investor, I hope that S&P 500 also continues its bull run for the next 5 years, particularly at the start of our retirement.

However, it has been a very long bull run. Including dividends, the S&P 500 has returned about 25% annually since March of 2009. Whenever this bull ends and the markets go down, sales of RVs may not continue to come up like daisies.

Trade Wars Are So Much Fun

I caught this on CNBC:

Thor Industries’ warning about rising tariff-related costs in its third-quarter earnings report sent shares plunging to 2018 lows, but CEO Bob Martin told CNBC on Thursday that the company is finding ways to blunt the impact.

“We thought it’d be minimal,” the CEO admitted in a “Mad Money” interview with Jim Cramer. “Today, they’re still kind of all over the board and we’re just finding ways to kind of counteract them whenever we can.”

For Thor, the United States’ largest recreational vehicle manufacturer, that means cutting raw costs and “de-contenting,” or taking certain ancillary products and features out of its higher end RVs.

Thor’s stock has been under pressure since the Trump administration enacted steel and aluminum tariffs in May, which hike Thor’s costs by stymieing cheap imports.

That is an interesting word, isn’t it?

De-contenting.

De-contenting means that you pay the same price, or sometimes more, for less.

This might not be the best time to purchase a new higher end RV from Thor.

Of course, trade wars hurt on both sides.

The Canadian dollar has slid below 76 cents which will make our first winter south in retirement considerably more expensive.

Hopefully the politicians and the bureaucrats in Canada and the U.S. come to a reasonable compromise.

Chronic RV Problems

I do worry about it. The overall reliability of our coach. I follow a number of forums online and every day I am reading about issues that people experience with their Newmar Class A motorcoaches. Silently, I hope that we don’t run into many of those issues. Issues that sideline travel plans, or, far worse, engulf a coach in flames.

This came through one of my news feeds about a Thor Tuscany coach:

So much for the lure of the road.

Bill and Jennie Mangan say their dream of spending the first 10 years of joint retirement traveling the country inside their luxury RV quickly faded beneath a cloud of diesel fumes pouring into their bedroom at night as leaking hydraulic fluid seeped into a basement drawer.

Then there was the sewage, which they say pooled daily in their bedroom and geysered from their shower drain like an off-color Old Faithful each time they flushed the toilet. The combination, the couple says, left their new Thor Tuscany 44MT smelling like a $270,000, rolling outhouse.

They have sued Thor Industries for a full refund on the coach plus $100,000 in damages for 160 separate defects.

They spent almost all of their time with the coach dealing with defects.

I hope our coach will fare better.