Gross Deception by Dale Pollak

Author:Dale Pollak
Language: eng
Format: epub
ISBN: 9780999242742
Publisher: vAuto Press
Published: 2020-07-14T16:00:00+00:00

CHAPTER 13

WHO’S GOING TO JUMP ON THE GRENADE?

When I was a kid, Saturday mornings were the bomb.

My brothers and I would invariably wake up before my parents.

We’d turn on the TV and plant ourselves with pillows on the floor.

Sometimes, all we watched were the black-and-white color test bars from the broadcast stations in Northwest Indiana.

Six a.m. was the witching hour. It’s when Looney Tunes and the Road Runner took over.

My brothers and I would watch as much as we could until breakfast. If we were lucky, we might have more cartoon time after breakfast.

But there were some Saturdays when circumstances or the weather made it so I’d be watching TV around 10 or 11 a.m.

At that time, I could switch channels and find war movies and westerns. If memory serves, Channel 9 carried this programming most regularly.

I liked westerns, but like a lot of other boys in my neighborhood, I really liked war movies.

I suspect it was the combination of combat, guns, bravery, sacrifice, and valor that captivated me.

I was especially moved by the scenes that depicted someone falling on a live hand grenade to protect his fellow soldiers.

As a viewer, you felt sad. The guy, who you’d probably come to know as someone who cared about folks back home and who worried about right and wrong, was suddenly gone.

I’m sure other viewers gained the same solace as me. We knew that the soldier’s sacrifice served a greater good. The soldier’s final, heroic act also inspired. It fed into our own games of “war” in the neighborhood, in which someone, sometimes me, would pretend a live grenade just rolled into our foxhole.

I’m reminded of these boyhood memories and movies as I consider the chronic investment inversion problem in dealer inventories across the country.

It’s basically a situation where no one wants to jump on the grenade.

No one wants to deal with the poorest-performing investments—the Bronze and Silver cars—that arrive in dealer inventories. Nobody wants to reckon with the fact that these vehicles don’t deserve the asking prices and time on the lot that they get.

In some ways, you can’t blame anyone for not wanting to deal with the problem of lesser-performing inventory investments.

First, most dealers and used vehicle managers aren’t groomed and trained to manage used vehicles as investments. They know the blocking and tackling that’s been handed down for generations—that losses are bad, gross profit is good, and the time you hold a vehicle equates to the amount of profit each vehicle holds.

It’s a management framework that’s worked for a long time.

But, as I’ve tried to point out throughout this book, it’s a framework that has significant flaws, and one that enhances the effects of market efficiency and margin compression.

Second, there’s human nature and two natural tendencies—to avoid pain and loss, and to take the easy road when you can.

I can’t think of anyone I know who wakes up in the morning and seeks out pain and loss. Can you?

I suspect the answer is a firm “no.”

I’d also submit that

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