vendredi 12 mars 2021

5 years and a half later : a return on Carmax and Lithia Motors

Almost 5 years and a half ago, I wrote a post about Carmax (KMX) and Lithia Motors (LAD), trying to determine which one was the best stock to own.

Considering some metrics, it was obvious to me that Lithia was a better investment than Carmax. However, Carmax seemed at least OK. 

In the following years, I've bought and sold Lithia Motors and Carmax shares. Sadly, I'm no longer a shareholder of any of those, because I got tired of some short-term stagnation at a moment or another.

Just before switching to the performance of both stocks over the last 5 years, let's remind that it was obvious that this industry wasn't exposed to some important threat. In other words, investing in auto sellers didn't seem very risky back then and is probably not riskier today. It was not at all like finding the next big thing.

Performance since april 1st, 2016

Lithia Motors: 330%

Carmax: 187%

S&P500: 91%

Once again, when you've found a good or great company that has a great track record and operates in an industry that isn't changing fast, stick with that stock. 

Go take a 5 years walk and take a look back at that stock once you're back home.Most of the time, you'll be satisfied.

1 commentaire:

  1. I remember writing about Lithia motors 2 weeks before your post, when you wrote about KMX... I was looking to swap my KMX for LAD... Finally, I ended keeping my Carmax until last year... When People started to spend their Money on toilet paper, masks, clorox towels, cars seemed less important... lot of People on furlough, others working from home... I missed that a lot of workers are avoiding buses and tramways... others are replacing their broken cars by a used car from dealers like KMX & LAD...