CarMax Risk Factors

CarMax (KMX) released their Q4 financial results and of course the numbers are a tough read. Not unexpected given that they are in the automotive retail and finance business. To their credit they are not opening any new stores and seem to be working hard at reducing costs to reflect the new realities.

But take a close read at the risk factors that they identify in the press release. My favourite is the last one which most certainly came from the lawyers. It reads "The occurrence of certain other material events." This is a well known risk that most investors will intuitively understand and facto into their calculations. who could not miss and or account for the proverbial certain other material events. I think we can all agree hat there is too much litigation in the world. But when management agrees to put that one out you have to start wondering just how badly off they really are.

The other risk that they just throw in was "Adverse conditions affecting one or more domestic-based automotive manufacturers." Thanks for the tip. Define adverse conditions and why only domestic based automotive manufactures rs. The Detroit Three are clearly sinking; management feels that there are or will be risks the question becomes what are they doing about it.