Autos About to Floor It

It's back to investment basics again, and the basics are no clearer than they are in the auto industry, specifically when it comes to new-car sales. The auto industry is in the midst of a multiyear cyclical turnaround that should deliver exceptional returns for investors who are patient and rational enough to take the ride. The thesis behind this future payoff, moreover, is extraordinarily simple. For those who think it takes a complex thesis to yield above-average returns, give your brain a rest and consider Albert Einstein's remark: "Any intelligent fool can make things bigger, more complex and more violent. It takes a touch of genius -- and a lot of courage -- to move in the opposite direction."

The thesis go like this. Back before the economy when over the cliff, in 2005 and 2006, new-car sales were at 16 million units. After the Great Recession, these sales collapsed to somewhere around 11 million. As a result, the average age of a U.S. vehicle is now around 11 years, making the active U.S. auto fleet the oldest we've seen for decades....600 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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