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Pawn shops and pay day lenders stocks rise.

As the Great recession enters 4th year and jobless rates stay stubborn over 9% guess where the money is made and which stocks are rising ? Pawn shops, payday lenders ,debt collectors, and shopping mall fortune tellers. Profiting from misfortunes is nothing new. Its a custom in the times we live in. So where is the evidence? Just look at these public stocks :

AEA America Advance Centers the stock went from $4 to 8 in few months
CSH the stock rose to 65% in just a year
RCII Companies leases TV and furniture is up 50%
EZPW Ezcorp the stock has gone up 50%

Since the banks are not lending, a whole new subset industry in lending has given rise to peoples needs. Borrowing has taken a new shape and form. Things people would shun are now just easy to do. Money is being lend, in just a slightly different way, than before. You need to take your valuables and place it with the lender while you take the cash and do what needs to be done.

All these companies have higher earnings and hence investors are flocking them in droves. Its a profitable venture and people’s need are met at the same time. Its been a very profitable for these companies as the economy and job situation keeps going South. People are pawning more, and selling stuff they don’t need raising cash. Unable to sell, they pawn items at local shops, or larger chains. Consumers making $50,000 or so are cash strapped, and so they don’t want to buy furniture and instead prefer to lease it, just like leasing a home. They don’t want to invest in it.

These are the stocks that may go down if the economy starts improving and credit is made available. These are signs of times and who knows how long this will last.

{ 4 comments… read them below or add one }

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