According to the Commerce Department report released today, businesses accumulated another $90 billion worth of inventory in the third quarter. This is an upward revision of the $56.8 billion reported last month. Over the prior two quarters the total increase is over $100 billion.
This just heightens the importance of this holiday season to retailers and manufacturers. If consumer spending doesn't materialize as planned, the amount of excess inventory that will be available in the secondary market could be truly epic. Of course, if spending DOES materialize, the amount of customer returns we will see in January and February will also be off the charts.
Either way, secondary market players are poised for a great few months. Hopefully, you have been heeding our advice to begin accumulating capital to be prepared to make some major buys this season. After all, money is made in the secondary market when you buy, not when you sell. If you can be buying at times of swollen supply you will get better deals and make more money (since the prices to end consumers will be little changed).