That is the question I find I'm having a hard time answering these days. I'm starting my analysis of Tim Hortons which ordinarily would be "my kind of stock" as a value candidate: boring, ubiquitous and e-z to understand.

But I read something I never took into account: with oil prices skyrocketing, the number of cars on the road may be on the way down, and Tim Horton's has the bulk of their stores positioned in gas stations and on highways, basically positioned to capture vehicle traffic.

So is this a cyclical oil surge, like 70's? Or is it "this time it's different" - namely Peak Oil is here and in 20 years only rich people will drive cars. I tend to be biased toward the Peak Oil scenario, we know the US hit Hubbert's Peak in the 50's or 60's, its not a fantastic leap of faith to think there cannot be an inexhaustible supply of stuff in the ground to supply an every increasing industrial and post-industrial population.

So not only Tim Hortons, but almost everything else: are we poised on the brink of the mother of all Value Traps? Or has it looked like "this time its different" and "the end is nigh" before and always looks this way on this side of a cycle or even this side of a secular slope?

Hi guys,

In regards to oil prices having a reach a permanent high plateau (due to supply/demand structural imbalance) I m in the agnostic camp. I have read well supported thesis for oil at $200 and oil at $80.

Being micro or bottom-up oriented I look for situations were the investment thesis is mostly neutral to oil price.

I m not well familiarized with THI but I would not expect it to be highly sensible to oil prices (as transportation or airlines) but I would be very conservative with the margins and growth estimates when valuing it.

best

Dante