Paul Killinger

The Changing Model of Auto Dealerships Presents Long Term Investment Opportunity

As for the so-called "future" of car sales, it's already here. Buyers can research their vehicles from their laptops, and have them delivered to their homes for $100 over invoice (less incentives and holdback) if they want to. They don't even have to set foot in a dealership anymore, much less overpay for the privilege.

The Changing Model of Auto Dealerships Presents Long Term Investment Opportunity

If auto manufacturers thought they could improve their dealer model, they would have long ago. A few big dealers make it easy for them, which they like because they're inherently lazy. (Who can doubt this having witnessed their past performance?)

As for dealer chains being able to increase markups and profits, this is utter nonsense. Buyers can now easily access invoices, incentives and used car values on-line, and this trend will only continue to grow as time goes on.

Savvy consumers even compare prices at DIFFERENT Wal-Marts, so they're now going to begin to overpay for vehicles? I doubt it. But I'll say this, whatever these guys are smoking it must be some terrific stuff!

The Changing Model of Auto Dealerships Presents Long Term Investment Opportunity

These guys are dreaming. While a shakeout of undercapitalized dealers was long overdue, the big boys' model isn't any better. Publicly traded auto dealers will continue to underperform forever.

This is one economic niche that will always be dominated by small to mid sized entrepreneurs. As we've witnessed recently in a variety of industries where there isn't any meaningful product differentiation, bigger isn't always better.

S&P 500 Stocks Furthest Above and Below Their 50-Day Moving Averages

Gee, virtually all energy stocks. How about that.