Where do you think DVC resale prices are headed?

[Brianstl]

The data does not seem to support that:
https://www.brookings.edu/policy202...cut-the-tax-cuts-and-jobs-act-pay-for-itself/
The CBO predicts a deficit of $1.1 Trillion in 2020, with $17.8 trillion in debt held by the public. Who knows what those numbers will look like in a few months time with the bailouts.
https://www.cbo.gov/topics/budget
Some more info on deficit and debt drivers, which cites tax cuts: https://www.thebalance.com/current-u-s-federal-budget-deficit-3305783

I am not, by any means, an economist and like most of you, I’m concerned about what the future may hold for our well-being - both health and economic. But there have been numerous factors before the pandemic indicating potential long term problems with how our economy operates and the pandemic is likely to make those come to the forefront of this continues for a long time.

Debt is not revenue took in. Debt is the result of spending exceeding revenue. While tax revenue has continued to grow after the tax cuts spending has grown at an even faster pace.

 

[Brian Noble]

This is a public health crisis that is hurting the the economy. There aren’t underlying economic issues that have to be dealt with this. Most sections of the economy should recover quickly when the health crisis passes.

Maybe. Some firms are going to fail in the meantime. It will take time for them to be replaced. I don't think this is as simple as a spring going back to where it started after you stretched it. There may also be some knock-on consequences of people tapping into reserves/liquidity (if they have any) or losing housing (if they don't) in the interim.

 

[Brianstl]

Maybe. Some firms are going to fail in the meantime. It will take time for them to be replaced. I don't think this is as simple as a spring going back to where it started after you stretched it. There may also be some knock-on consequences of people tapping into reserves/liquidity (if they have any) or losing housing (if they don't) in the interim.

I don’t think it will just be back to normal. I think there will be a recovery process. I just think that process will be be warp speed compared to 2008 where real recovery took years because of low growth numbers.

 

[TraderSamWDW]

Has anyone thought of selling any of their contracts now and then likely re-buying in 6-12 months?

Wondering what people's thoughts are. I doubt I would do it but I like thinking through theoretical questions like this.

What are the costs associated with selling DVC? You have ROFR fee, estoppel fee, and commission (8.5% with the board sponsor it looks like).

Is anyone planning on this?

I have 2 contacts, one direct, and one resale but not restricted to L14. If I had one restricted to L14, I would probably have it listed already with the intent to buy it back later .

I totally thought of it, but buying back a more restricted contract was the tipping point

 

[TraderSamWDW]

I think there are underlying economic problems that will come to light as a result of this, which will have longer impacts on our economy. After all, all the recent tax cuts have drastically undermined our economic security and we don’t have the cash flow coming in.

That is incorrect, tax revenue has been up every year. Its going to change, but capital gains tax collected sky rocketed. Velocity of money is something like 8 times faster is the private sector, so it gets taxed more often.

The last year over year tax revenue decline was 2008 to 2009. (No capital gains). Probably will repeat in 2021

 

[Deploraboo]

If S&P drops 50%, which it will, DVC points will drop concomitantly. At least.

 

[Lorana]

Maybe. Some firms are going to fail in the meantime. It will take time for them to be replaced. I don't think this is as simple as a spring going back to where it started after you stretched it. There may also be some knock-on consequences of people tapping into reserves/liquidity (if they have any) or losing housing (if they don't) in the interim.

From the article (https://www.brookings.edu/policy202...cut-the-tax-cuts-and-jobs-act-pay-for-itself/):

Did the TCJA spur enough growth to maintain federal revenue levels?
While some TCJA supporters observe that nominal revenues were higher in fiscal year 2018 (which began Oct. 1, 2017) than in FY2017, that comparison does not address the question of the TCJA’s effects. Nominal revenues rise because of inflation and economic growth. Adjusted for inflation, total revenues fell from FY2017 to FY2018 (Figure 1). Adjusted for the size of the economy, they fell even more.
The right question: What would revenues have been without the TCJA?
The most appropriate test of the revenue impact of the TCJA is to compare actual revenues in FY2018 with predicted revenues in FY2018 assuming Congress had not passed the legislation. In fact, the actual amount of revenue collected in FY2018 was significantly lower than the Congressional Budget Office’s (CBO) projection of FY2018 revenue made in January 2017—before the tax cuts were signed into law in December 2017. The shortfall was $275 billion, or 7.6% of revenues that were expected before the tax cuts took place. Given that the economy grew, and in the absence of another policy that could have caused a large revenue loss, the data imply that the TCJA substantially reduced revenues (Figure 1)."

 

[RaymOOOnd]

Guys who'd have thought. After decades of financial professionals failing again and again to time the market, a bunch of oracles have popped up on a Disney website (!) who know exactly what's going to happen. And they buy TIMESHARES when the market crashes rather than value stocks!

The Wharton guys ought to take some time to review what's being said here.

 

[Brian Noble]

From the article (https://www.brookings.edu/policy202...cut-the-tax-cuts-and-jobs-act-pay-for-itself/):

Did you maybe mean to quote someone else for this, or am I missing how this might (or might not) give insight about how long any downturn might last going forward?

 

[Grumpy by Birth]

Guys who'd have thought. After decades of financial professionals failing again and again to time the market, a bunch of oracles have popped up on a Disney website (!) who know exactly what's going to happen. And they buy TIMESHARES when the market crashes rather than value stocks!

The Wharton guys ought to take some time to review what's being said here.

I don't claim to know what's going to happen with markets. But, if prices drop on a product I'm interested in purchasing, why would I not take advantage of the lower price?

Some may consider DVC an "investment." For many of us, however, DVC is not an investment in our portfolio, but simply a means to pay for desired vacation accomodations at a discounted rate.

By your logic, one could ask why people would consider even going on vacation, or buying any non-necessities rather than investing every discretionary dollar in the stock market.

 

[RaymOOOnd]

I don't claim to know what's going to happen with markets. But, if prices drop on a product I'm interested in purchasing, why would I not take advantage of the lower price?

Some may consider DVC an "investment." For many of us, however, DVC is not an investment in our portfolio, but simply a means to pay for desired vacation accomodations at a discounted rate.

By your logic, one could ask why people would consider even going on vacation, or buying any non-necessities rather than investing every discretionary dollar in the stock market.

We just closed on our third contract so I'm obviously not all about saving or investing all of our money.

That said, DVC is in my view a liability -- as is anything that costs you money every year to own it, costs you money in the process of using it (i.e. all other expenses of a trip to WDW), and ultimately is guaranteed to depreciate until it is worth nothing.

Liabilities are best bought at the height of financial security and comfort, and the money best considered (deliberately) lost. During something like a recession, however, by buying DVC you are accepting absolutely enormous opportunity cost in order to obtain that liability.

If DVC were a product with some value aside from simply being a roundabout way to save on vacation lodging, my comparison wouldn't be fair. But as it has no other real value, I feel comfortable saying it makes NO sense not to pursue an option, with any given stash of money, which will bring the greater financial benefit. Let's not forget that Disney hotels can be booked with cash, and more conveniently at that.

 

[Lorana]

Did you maybe mean to quote someone else for this, or am I missing how this might (or might not) give insight about how long any downturn might last going forward?

I did. I’m not sure how it quoted the wrong post. Sorry about that. I was responded to the comment that revenues were higher to point to the data in the article that said once you adjusted for inflation, revenues fell.

 

[McCrae]

I think It’s almost certain that prices will fall, but it’s also likely that supply with drop as well. Only forced sellers will be selling. Could be a great time to pick up a bargain.

 

[Deploraboo]

At a certain price point, everyone becomes a forced seller. See S&P. It’s not like folks woke up one day and said DIS or NFLX or AAPL are horrible companies. They need cash to meet their obligations, No one is immune.

 

[sky2823]

Sorry if it has been asked. Does Disney have the right to pause all resales? They should. If they don’t and this continues the market will be devastated.

 

[Matty B13]

Sorry if it has been asked. Does Disney have the right to pause all resales? They should. If they don’t and this continues the market will be devastated.

How could they? It's not their deed, its the owners.

 

[Brianstl]

How could they? It's not their deed, its the owners.

I think people forget that a DVC owner is a property owner and not a club member. The timeshare laws of the state apply to resales and not Disney’s whims.

 

[Sandisw]

Sorry if it has been asked. Does Disney have the right to pause all resales? They should. If they don’t and this continues the market will be devastated.

Only right Disney has is to step in and become the buyer. Other than that, an owner can sell the contract for whatever they want to accept.

 

[FireflyTrance]

I expect prices to fall significantly, easily 25-50% in the coming months. If my husband or I had lost our jobs, DVC would be one of the first things we would consider selling. Yes we have savings, but I would probably STILL try to sell it if I saw us going through our savings. As it is we have not lost our jobs, but I want to be conservative in our spending and not make any luxury purchases right now.

 

[bookwormde]

quick tracking update

Then number of new contracts for sale has been very low over the last 2 days (there may be some issues with deciding on a price point)

BVW has a limited number of 200 to 300 pt contracts averaging $109