Kicking The Tires. The Story Of CarMax (10 Bagger Book)
| Company Name: CarMax, Inc | Stock Symbol: KMX | Industry: Auto Retail |
| Percent Appreciation: 6,652% | Number of Bags: 66.5 | Holding Period: 14.5 Years |
| Entry Date & Price: Jan of 2000 | Exit Date & Price: Current | Date Of Analysis: June, 2014 |
Company Description: CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. It operates in two segments, CarMax Sales Operations and CarMax Auto Finance. It sells vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions, as well as sells new vehicles under franchise agreements. The company also provides customers financing alternatives through its finance operation, CarMax Auto Finance, as well as through its third-party financing providers.
Quick Trading Overview & Objective: The company went public in February of 1997 at $10. By January of 2000, the stock price proceeded to collapse to $0.75 or over 90%. It is from this January of 2000 bottom that the company has staged an impressive multiyear rally of 6,652% (as of 6/26/2014 @ $50.64).
We will now go back in time and take an in depth look at the company in order to determine if we could have taken a long position in early 2000. More importantly, we will look at CarMax’s fundamental/trading patterns over the last 14 years to ascertain if we would have been able to maintain our position over such an extended period of time in order to walk away with such massive gains.
FUNDAMENTAL ANALYSIS:
What strikes one immediately is how short of a window investors had to purchase this stock at the bottom. After hitting a bottom in January of 2000, investors only had 16 months to purchase this stock below $5. In fact, anyone who purchased this stock after May of 2001 would not be holding a Tenbagger today. Making 1999-2001 period crucial in CarMax’s turnaround story and an important period for us to study.
To Be Continued……
Kicking The Tires. The Story Of CarMax (10 Bagger Book) Google
CNBC Viewership Collapses. What Does That Mean For The Stock Market
The only time I watch CNBC is when the market blesses us with a massive down day or two. There is nothing better than to see that “Deer In The Headlights” look on the perpetually bullish crowd as they attempt to sell incredibly overpriced stocks to unsuspected public. Now that I think of it, I don’t think I have watched CNBC since the April of 2009.
That is why it comes as a surprise, with the overall stock market sitting near its all time highs, that CNBC’s viewership has collapsed.
According to ZeroHedge: The reason? According to the latest Nielsen Media Research data, in the second quarter of 2014, CNBC business day viewership for all viewers just dropped to 162,000 – a new (and depressing for Comcast) low, on par with Q2 of 1997!
Based on my historic stock market work, this is consistent with late stage secular bear markets. And despite the markets being a few clicks away from an all time high, at least the retail public is not falling for the trap this time around. So, who is buying? Corporate buybacks are the largest culprits behind today’s rally. Yet, that party might be coming to an end as well. This could knock the wind out of the market
CNBC Viewership Collapses. What Does That Mean For The Stock Market Google
Daily Stock Market Update. June 25th, 2014. InvestWithAlex.com
An up day with the Dow Jones up 49 points (+0.29%) and the Nasdaq up 29 points (+0.68%)
Today’s market action is a perfect illustration of why the stock market doesn’t follow fundamental economic data nor news. It leads both. After a few “fuzzy math” calculations at the Department Of Commerce Q-1 GDP growth was re-adjusted down 2.9%. That’s right, the GDP contracted 2.9% in Q-1 of 2014. It is very rarely that we get a chance to see the stock market sitting at an all time highs while the GDP growth is negative. Enjoy it while it lasts.
I know, I know. Everyone expects Q-2 growth to be over 35%, hence the stock market valuation levels. Yet, there is a bigger story here. As I have mentioned before, the stock market is oblivious to any of this. It doesn’t care. It is simply tracing out a beautiful mathematical structure that could be found within its composition. When it completes this structure, the market WILL fall. Even if the GDP growth accelerates to 78% for the rest of the year.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. June 25th, 2014 InvestWithAlex.com
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Inspiration Of The Day
The Hunt For 10 Baggers (Book…Introduction…Part 3)
Continuation of part 2
What will we find and will we be able to identify future Tenbaggers based on the analysis above?
That is the purpose of this book. To look at such companies in greater detail and to identify traits that were common to all of them. By combining fundamental, technical and timing/mathematical analysis we will be able to determine what factors were important and what might have triggered these Tenbaggers to initiate their massive multiyear stock market rallies. Most importantly, we will attempt to build an early trigger system that would allow us to take appropriate positions in future Tenbaggers. All while holding their stocks through the duration of their rallies.
Which companies will we study?
| Company Name | Stock Symbol | % Appreciation | Number Of Bags | Original Investment($10,000) | Industry | Duration |
| Franklin Resources | BEN | 81,328% | 813 | $8.1 Million | Financial | 22 Years |
| Danaher Corp | DHR | 56,478% | 564 | $5.6 Million | Industrial | 24 Years |
| Apple Inc | AAPL | 4,185% | 41 | $410,000 | Technology | 14 Years (*Since 2000) |
| The GAP, Inc | GAP | 69,100% | 691 | $6.9 Million | Retail | 24 Years |
| CarMax, Inc | KMX | 5,878% | 58 | $580,000 | Auto | 15 Years(*Since 1999) |
| Southwestern Energy Co | SWN | 6,288% | 63 | $630,000 | Utilities | 15 Years (*Since 1998) |
| Bally Technologies | BYI | 12,213% | 122 | $1.2 Million | Technology | 14 Years (*Since 2000) |
| Keurig Green Mountain | GMCR | 60,675% | 607 | $6.1 Million | Consumer | 20 Years (*Since 1994) |
| Best Buy Inc | BBY | 42,500% | 425 | $4.25 Million | Retail | 29 Years (*Since 1985) |
| Medifast Inc | MED | 15,605% | 156 | $1.56 Million | Weight Loss | 13 Years(*Since 2001) |
*Data as of June 2014.
In conclusion, this book will attempt to become a definitive guide on how to identify, analyze and take appropriate position in future Tenbaggers. In a wide range of diversified industries. By studying the past and identifying clearly defined metrics, we should be able to parlay such knowledge well into the future. It is my sincere hope that this book helps you identify future Tenbaggers, take position at the appropriate time and hold it through thick and thin. Well, at least until it is time to take profit at 10X, 20X or 50X your original purchase price. If done properly and successfully, the grandkids of your grandkids will never have to work.
To Be Continued……
Shocking: American Household Net Worth Collapses
American middle class continues to vanish at astonishing speed. At least according to the new study published by Russell Sage foundation For most families, wealth has vanished
The study, which measures the average wealth of U.S. households by income level, reveals a startling decline in wealth nationwide. The median household in 2013 had a net worth of just $56,335 — 43% lower than the median wealth level right before the recession began in 2007, and 36% lower than a decade ago. “There are very few signs of significant recovery from the losses in wealth suffered by American families during the Great Recession,” the study concludes.
I have covered the subject matter in my previous posts titled Guillotine Sales About To Surge. Make no mistake, the American middle class, and not the rich, is the driving force behind America’s success. I continue to believe that by decimating the middle class the US Government has undermined the very foundation of America’s future.
In other words, what the FED did over the last 20 years is nothing short of criminal. By concentrating of bubble blowing, asset appreciation and capital misallocation, the US Government and the FED have, for the most part, benefited only the rich. The problem is, no economy can function like this over an extended period of time. Rich or not, an economy with no middle class eventually collapses and becomes a banana republic. Unfortunately, we are approaching that threshold at breathtaking speed.
Daily Stock Market Update. June 24th, 2014. InvestWithAlex.com
A down day with the Dow Jones down 119 points (-0.70%) and the Nasdaq down 18 points (-0.42%)
As the day started a lot of financial media outlets jumped on the “This Bull Market Will Never End” horse proclaiming all kinds of crazy stuff. Here is just a small sample.
- As Dow nears 17,000, the worrywarts still speak loudest
- The 10 Stocks That Will Lead the DJIA to 20,000
- Bull markets don’t die of old age, why Dow 44,000 is coming
For god’s sake, will someone just come out and say that the Dow is going to 500,000 by 2098? Might as well. Yet, despite all this bullish sentiment the market promptly turned around and sold off to the tune of 140 points.
More importantly, despite all of this bullish sentiment the Dow is only 220 points higher than its December 31st top (an important point that I might explain later). Point being and as I have suggested before, the Dow remains in a very tight trading range, accumulating energy for a massive move. That move is just around the corner.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. June 24th, 2014 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
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Shocking Truth: The Smart Money Has Missed This Stock Market Rally.
According to the WSJ, a multitude of large investors have missed this stock market rally. And we are not talking about the recent rally (or lack thereof), but the rally since the 2009 bottom. Big Investors Missed Stock Rally
The institutions, ranging from large corporations such as General Motors Co.GM +0.07% to big universities such as Harvard, have been shifting to hedge funds, private equity and venture capital. But while these alternative investments outpaced stocks during 2008’s market meltdown and are seen as potentially less volatile, they have badly lagged behind the S&P 500 since 2009, a period in which U.S. stock indexes have more than doubled.
If you actively participate in financial market this shouldn’t surprise you. After all, it is the human beings in those organizations who make the final investment decisions. That makes their thoughts, feelings, emotions and decision making processes identical to almost everyone else on Wall Street. It would only be appropriate if they make the same mistake.
Shocking Truth: The Smart Money Has Missed This Stock Market Rally. Google
Investment Wisdom Of The Day
“If I’d only followed CNBC’s advice, I’d have a million dollars today. Provided I’d started with a hundred million dollars”. -Jon Stewart