Toyota - invest in a winner

I am not sure selling their PC division was a good idea.

But, overall, I think IBM is a good buy, for the reasons you cite, but the fact that they still make a bunch of money from mainframes and they do a ton of consulting for iCommerce (the 'i', in this case, stands for "IBM", not "internet").

Jeff

Based on future potential, I think it was over valued at $100. That just makes it wildly over valued at $135. The problems with stocks is that people treat it like a casino game. Sooner or later the big boys will cash out, and the ones who aren't quick enough will be left holding the bag. I'll assume you are a long term investor - do you think relative to the market averages, Toyota stock will do better or worse in the next ten years? I'd bet on it doing worse than the market average. This has nothing to do with the quality of the cars or the greatness of Toyota technology. It has everything to do with the competitive nature of the automotive market place. The significant areas for future growth are India and China. Neither of these countries is going to be like the US and hand an industry over to the Japanese. They'll do the same thing to Toyota that the Japanese did to Ford 75 years ago - learn from them and then kick them out. Automobile sales in Toyota's home market are down significantly. Toyota sold over

10% fewer car in Japan last year than the year before. They were able to maintain production at the Japanese factories by shipping more cars overseas (they actually increased the percentage of imported Toyotas sold in the US so far this year). What happens if the US goes into recession? What are the chances that US manufacturers will start competing in the low end market again? The economics of hybrids is not particularly attractive. What happens when the WOW factor wears off?

Good luck. Timing can be everything. You have over a 70% profit. What are you holding out for?

But at a slower rate than GM. And Toyota does have Chinese partners. See:

How about 5 years of ever increasing sales. Just how many new cars do people need? I've done my part, 6 new vehicles and 3 used ones, in the last ten years. Unfortunately my SO is not doing her's, only 3 in ten years (she had to replace her Chrysler van, and got cars for the kids). The people in the Toyota newsgroup all seem to believe that most Toyota owners keep their cars for 10 years or more, so the replacement market for Toyotas is heavily dependent on converts from other brands. It seems to me many of the easy targets are already driving Toyotas or Hondas. Where are the buyers going to come from to keep sales going up? What do you think Toyota share of the US market will be in 10 years?

Yes, definitely. Being ahead of the trend when it comes to automotive stocks is getting out. And since Toyota's stock appears to be the most over valued auto stock it would seem to me that selling it is staying ahead of the curve. I can't imagine that the upside is another

70% increase in the next 2 years.

And Mercury is a Ford Brand, and Buick and Cadillac are GM brands. All modern cars are very close in quality. The differences in most of these quality surveys has more to do with perception than reality and the results are so close that the top brands are likely in a statistical dead heat. Since Toyota quality is largely based on perception, it can change rapidly. A few more years of record recalls and Toyota the myth of Toyota quality will be dispelled.

The fun thing about stock investing is that both of us will likely be right if we pick the right time period. No stock continues upwards forever, so at some point, the price of Toyota stock will go down. At this point I can declare myself right. Eventually it will go back up, if for no other reason, long term inflation, at this point you can tell me "I told you so." Enjoy.

Ed

Four years ago I finally got fed up enough with GM to sell my stock and reinvest the proceeds into Toyota ADRs (US traded version of Toyota stock). At the time I was nervous about the high valuation the market had on Toyota, but I did it anyway. Boy was that ever the right move!

John

But in the end that is just another lame excuse. Unless a company is selling it's own stock then it really doesn't need to care about the short term stock price. Companies which grow and prosper over time are always rewarded with a strong stock price over time. It is the idiot short term managers fault if they listen to the noise from analysts!

John

Good clean used Suburbans are going to be plentiful on the used car market for years to come as fuel prices continue to rise and those who don't have a real need for such a monster eventually cry UNCLE!