YCG Investments
“If you buy above average businesses at below average prices, on average, we believe you should come out ahead.” — Brian Yacktman

Car Makers Unsubstantiated Hope

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The cover of today’s WSJ has a statement, “U.S. auto sales hit their highest monthly level in more than a year in August, bolstering hopes that the industry’s recovery will continue.” Hopeful for an auto sales recovery – are you kidding me?!? Can sentences be called an oxymoron? This “logic” makes no sense to me. The cash for clunkers program only increased the probability of a future slump – we have borrowed from future sales and shifted them to the present. Continuing with my drug analogy – without continued injections, we’ll be right back where we were, if not worse. One step forward, two steps back – not the recipe to a sustained recovery.

Disclaimer: The specific securities identified and discussed should not be considered a recommendation to purchase or sell any particular security. Rather, this commentary is presented solely for the purpose of illustrating YCG’s investment approach. These commentaries contain our views and opinions at the time such commentaries were written and are subject to change thereafter. The securities discussed do not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. These commentaries may include “forward looking statements” which may or may not be accurate in the long-term. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable. Past performance is no guarantee of future results.

Posted by: Brian Yacktman | September 02, 2009 | Permalink

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