Real Cash for Clunkers

Auto sales are rebounding, but nowhere near its potential. However, that day will happen. In the meantime, driving sales are the fact our cars and trucks are so old and getting auto loans is so easy. When a car is 11 years old, people have a natural incentive to buy a new car. Since that guy from the Weekend at Bernie’s movie (yes the dead guy) could get a loan today, they are moving off the lots. This year the run rate in America is expected to reach 14 million, and when the greatness of America is unleashed down the road, we could get back to 17 million. In the meantime, here’s how I would invest in the rebound.

Sifting Through the Ashes

Today Infospace is up huge and goes on our watch list. I saw a spike in the stock not long ago when William J. Ruckelshaus became the permanent CEO of the company. If the name sounds familiar, his father is a legendary government servant. He was the first head of the EPA under Nixon and brought back under Reagan after the agency lost all credibility in its handling of the Super Fund cleanup. His stock and reputation at that point buoyed by his job at director of the FBI and being part of the Saturday Night Massacre. That was the night he and others at the Justice department resigned rather than follow through on Nixon’s request to fire Archibald Cox, the special Watergate prosecutor.

Seems like fixing up messes runs in the blood. Since taking over as interim CEO in November 2010, Ruckelshaus has seen the company’s shares almost double in value. If you think buying the stock here is chasing, it’s actually cheap in several metrics and once traded at $1,299 a share. We haven’t pulled the trigger, but it’s on the watch list.