Subject: Re: FKA, still: KMX
Seems to be a bit of an overreaction to me?
Rising loan loss provisions isn't exactly a shocker, given where things seem to be in the business cycle. i.e., early cracks.



It sure is keeping me humble - I used to have a long position in KMX and short Carvana before I threw in the towel on shorting (except for XLG, the top 50 or the S&P 500) a couple of years ago. Now KMX has a market cap of less than $7b, and CVNA, with half the sales, has a market cap of $44b. I can't say I understand why Carmax has not only increased loan loss provisions, but also has a 6% decline in sales on top of a margin that has shrunk from 2.9% to 1.8%. If this is how they respond to early cracks in the business cycle, how are they going to look when things really start falling apart? Serious question - my impression is that they did fine in recessions like in 2001 and 2008-2009, which is the one thing that might tempt me to try to catch this nasty piece of cutlery.

dtb