Wisconsin's lemon law
If the motor vehicle you buy or lease turns out to be a "lemon," the manufacturer has to replace it free or refund the price (minus a reasonable amount for mileage).
What is a "lemon"?
A new vehicle - no more than a year old and still under warranty - is a "lemon" if
* It has a serious defect the dealer can't fix in four tries, or
* It has one or many defects that prevent you from using it for 30 days or more (the 30 days need not be consecutive)
What is a defect?
A defect covered by the Lemon Law must seriously affect the use, value or safety of your vehicle and must be covered by the warranty. An irritating rattle may not be "serious" enough to make your car a lemon. Stalling probably is.
What vehicles are covered?
The law covers any new car, truck, motorcycle or motor home (does not include mopeds, semi-trailers, trailers or non-motorized RVs) you buy or lease, even if you register the vehicle in another state. It also covers a demonstrator or executive vehicle.
How long are you covered?
The lemon law includes no deadline for filing a lemon law suit; a court would decide if your case were too old.
Is your vehicle a lemon?
Your vehicle is a lemon if all of the following statements are true:
* You bought or leased a new vehicle.
* The vehicle is a car, truck, motorcycle or motor home.
* The vehicle developed a defect or defects during its first year and before the warranty expired.
* The defect seriously harms the vehicle's use, value or safety.
* One of the following happened during the vehicle's first year and before the warranty expired:
o The dealer failed four times to fix the same defect; OR
o The vehicle was out of service for 30 days or more due to defects
Wisconsin's lemon
Is It Time to Invest Abroad?
Have you noticed any economic upheaval lately? The American economy has been sputtering enough to make it easy to wonder: Should you be investing more money abroad?
Why NOT to invest abroad
There are plenty of reasons not to invest abroad, at least not directly. Plenty of Fools have written about them before. A big one is that most of us know much less about goings-on abroad than we do at home. We just don't have a good handle on how well various foreign companies will perform given their local competition, national business laws and accounting practices, and the overall geopolitical stability in the region.
Bill Mann, an experienced international investor, has even warned about it, saying in 2000: "Go forth with care, dear Fools. I do not feel that one should explicitly avoid investing overseas, but you can gain significant international exposure by holding Coca-Cola (NYSE: KO), with 72% overseas sales, AIG (NYSE: AIG), with 58% of sales coming from international spaces, or even Cisco (Nasdaq: CSCO), which sees much of its revenue growth coming from offshore." You may not realize just how many companies derive significant revenues abroad -- eBay (Nasdaq: EBAY), for example, generates 13% of its revenues from Germany alone, with year-over-year revenue growth there around 15% in 2007.
Another reason not to invest heavily abroad is this: Even though we may be in a period of economic uncertainty now, it may simply pass. Economies don't necessarily keep deteriorating. Often, they advance and retreat, and then advance again. America may well maintain or regain its international leadership position in short order. It may be the best place for most or all of your investment dollars.
Why to consider it
All that said, there are still good reasons to contemplate international investment these days. First off, there's the weak dollar, which seems to be on a neverending downward spiral.
Next, while this isn’t meant to be a political article, some political issues do warrant concern -- such as budget deficits, continually growing consumer credit card debt, and our rapidly rising national debt. We're running annual deficits now, with our national debt hitting about $9.5 trillion, with little relief in sight. Further, significant inflation looms as another side effect of attempts to reduce our debts.
It's not that this isn't a great country, or that things can't turn around. Some nations in living memory have gone from pedestals to pits (or vice versa) in fairly short order. But right now, it might be smart to spread a little more of your savings abroad.
Berkshire Hathaway (NYSE: BRK-B) Chairman Warren Buffett has expressed a bearish stance on the U.S. dollar and holds both Canadian and Brazilian currency.
How to invest abroad
If you're now eager to learn just how you might invest abroad, let's review some options.
First, you can let professionals do your international investing for you via mutual funds. Some mutual funds are expressly dedicated to investing in international stocks and/or bonds. And the managers of many other mutual funds have substantial freedom to invest at least some fund money in suitable international investments. Do a little research into funds that interest you and see how their managers are thinking about global economies and how they're investing.
Consider currency funds, which aim to profit as the dollar's value changes. They're risky, though, and may not be necessary if you take other steps, such as those listed above. Another option is buying American Express (NYSE: AXP) travelers checks in euros (or some other currency). But you'll forgo earning interest, which is kind of a big deal.
Finally, remember that there are many good old American companies with substantial overseas operations and revenue. PepsiCo (NYSE: PEP), for example, took in nearly $40 billion in 2007, nearly half of it from outside U.S. borders. A SmartMoney article explained: "Certain sectors and industries that garner a large percentage of overseas sales should benefit more from the dollar's decline. Industrials (aerospace, defense, construction, farm machinery, industrial machinery, air freight), materials (gold mining, metal and glass-container makers), health care (pharmaceuticals, medical-device makers), and consumer-staples companies (soft drinks, tobacco, household products) are among the largest beneficiaries."
The bottom line
So what's the bottom line? Well, it’s impossible to tell the future precisely. After all, the dollar may well be at the beginning of a long climb. So for now, it’s good advice just to keep reading and learning -- and paying attention to the global reach of American companies you’re invested in or could invest in, as that's one good way to benefit from a troubled U.S. economy.
Investment tips for a shaky market
Mattress + money = bad idea.
With the economy in turmoil, stashing your cash under the bed or burying it in the backyard may feel like the safest bet. But experts say there are still investments that make sense.
The most important tip is Investing 101: Think long term. Markets fluctuate every minute and they go through cyclical swings that can last many months. But over time, stock market investing always beats inflation. You have to be able to ride out the volatility.
"Don't panic," said David Campbell, a principal at San Francisco's Bingham, Osborne and Scarborough, which has $1.7 billion under management for high-net-worth individuals. "The smart money never panics; it always looks for opportunity."
He and other financial advisers said withdrawing investment funds in a downturn is often the worst strategy.
"The problem with taking your money out of the market is, we know at some point in time, based on historical data, this market will rally," said Barry Taylor, portfolio manager at the same firm. "If you pull out of the market, you're not going to be there when those losses are recouped. Our recommendation is not to pull out but to stay in and ride it out, wait for the eventual return we know will happen. Markets go through cycles."
Creating a diversified portfolio is one way to be ready to ride out financial storms.
"It's important to stay diversified - well balanced between stocks and bonds within different sectors, maybe different asset classes if you can tolerate the volatility," said Gary Schlossberg, senior economist with Wells Capital Management, the investment-management arm of Wells Fargo.
Hank Herrmann, CEO of Waddell & Reed, a mutual fund company in Kansas with $70 billion under management, said that now can be a time for some people to go bargain hunting in the stock market.
"We've had about a 22 to 23 percent decline," he said. "The average decline for a bear market is 28 percent. If you use that as a rule of thumb, you've got 5 percent more downside. It suggests that most of the damage is done."
Here are suggestions from investment professionals:
Commodities: There's nothing as basic as energy, precious metals, food, etc. "Historically, commodities are a good diversification tool," Schlossberg said. "They're not so much to goose returns, but to stabilize returns."
In fact, a lot of money now looking for a home seems to be being channeled into commodities, as shown by an increase in their prices, he said.
"Gold is always a good barometer for fear and anxiety, and we have plenty of that now," Schlossberg said.
Basic consumer products: "Health care and consumer staples (have) resilience to the business cycles. They are essential items that don't bounce around as much as the economy moves up and down," Schlossberg said. "Health care earnings tend to be stable. Essential consumer items like food, certain types of beverages, personal care products are not terribly exotic but tend to be more resilient to a slowing economy."
Telecommunications is another area that tends to outperform the market during an economic slowdown, he said.
Blue-chip stocks: "For truly long-term investors, it's a great opportunity to buy equities," Herrmann said. "Stocks are on sale now. Stocks are the only thing you can think of that people sell when they go down. Usually when you put something on sale, people rush in to buy, but not with stocks."
Fortune 500 companies are large enough to withstand an economic slowdown, and they derive a large portion of their sales from overseas. That's a double plus: They benefit from stronger growth internationally, as well as from bringing in revenue in currencies that are stronger than the dollar. "It's a nice protection for U.S. investors," Campbell said, naming companies like General Electric, IBM and Hewlett-Packard.
Financial services: With banks, brokerage houses and mortgage lenders imploding on a daily basis, it sounds like heresy to suggest investing in the financial services industry. But the country will still need banks two years from now - and the ones that survive will be stronger than ever.
"If you have confidence some of these will be survivors - Citigroup, Bank of America, Wells Fargo - they're having to float new bonds and securities to raise more capital, and because of the current environment are having to float long-term rates with a very nice yield," said Richard Welty of Welty/Solari Capital Advisers in Lafayette. "I wouldn't put all my money in any one of them, but it's an area that's worth looking at. It's all in the timing."
Timing: You can't time the market just right. But again, experts emphasize, you should use a long horizon when deciding where to invest.
"The question you should ask yourself today is not 'When will the stock market bottom, next year or next month?' " said Jim Paulson, chief investment strategist at Wells Capital Management. "Draw a big circle around where we are today. Ask yourself, 'If I step in and buy something, will I be happy two or three years from now, even if it goes lower in the next six to nine months?' If you ask that question today about stocks in general, the answer is 'Yes.'
Time to Invest
By James Early
In the middle of 2006, I came across a stock with some unbelievable numbers. Revenue was up more than 80% per year for the past three years. Income had grown 95% over the same time. Return on equity was a robust 47%, and net margins were close to 42%. Plus, it was a player in the growing student loan market. Its name? First Marblehead (NYSE: FMD).
Based on what I knew -- which wasn't much -- I gave First Marblehead a lot of consideration. But did I pull the trigger? First, let me say that even thinking about making an investment without weeks of research is alien to me. I come from a value-focused hedge fund. We had all day to analyze stocks, and we used it, often burning the midnight oil.
Hedge funds have a reputation as the gunslingers of the market, but I assure you, mine was anything but. We held just a handful of stocks, and we knew them cold. But keeping track of them, and finding new ones, took a lot of time. That kind of thoroughness is what The Motley Fool is all about. When it comes to burning the midnight oil, David and Tom Gardner -- Motley Fool co-founders and lead analysts of the Motley Fool Stock Advisor newsletter -- could give the hedge-fund crowd a run for their collective money.
Hidden risks
No, I didn't buy First Marblehead. And I'm glad I didn't, considering the recent credit fears that have spooked investors, and the specter of defaults that has slashed the stock by more than 90%. But I'm not really here to criticize First Marblehead; it suffered from some events outside of its control, and several of my colleagues continue to monitor its long-term prospects.
Regardless, risk exists, and with any investment, it's important to know what you're betting on. No screen or quick peekaboo would warn you of the effect the credit markets would have on First Marblehead, or the significant exposure Merrill Lynch (NYSE: MER), Citigroup (NYSE: C), and Morgan Stanley (NYSE: MS) would have to subprime loans. Then you have companies such as Bed Bath & Beyond (Nasdaq: BBBY) and Blue Coat Systems (Nasdaq: BCSI), which had to take charges recently because of options backdating.
Granted, these risks may all be on the obvious side, but have you ever been burned because you missed a material piece of information? Having the time to do some diligent digging is crucial in avoiding potential blowups.
The "Are you kidding me?" formula
There's more. Years ago, I read a book about theories underlying accounting and financial statements. It spent a lot of pages on a common solvency formula: earnings available to pay fixed charges, divided by those fixed charges. Via several chapters of buildup, it replaced the simple version with a "corrected" formula that made several tweaks to the numerator and denominator. Was it right? Yes -- it eliminated a lot of flaws in the raw accounting numbers. But that accuracy came at the expense of a formula so complex that individual investors would need days to calculate it.
Lack of time tends to pull investors in one of two ways. The first: making futile grasps in a blizzard of information overload. The second: tunnel vision toward stocks you've already researched. Let's face it, either one can burn you.
Having time troubles with your investing?
The best investment you can make is an investment in your time management, and I've got ideas for you. The first is simple: Develop screens and hone your criteria for investments. With 10,000 stocks and a day job, you absolutely have to develop efficient methods for cutting to the ones you're likely to like. Second, spread the load among trusted compatriots. Start an investing club with like-minded investor friends.
Toyota plans to invest up to $700 million in Brazil
By Rogerio Jelmayer
SAO PAULO (MarketWatch) -- Japanese automaker Toyota Motor Corp. (7203.TO) is planning to invest up to $700 million in Brazil to install a new manufacturing unit, Brazilian Trade and Industry Minister Miguel Jorge said Tuesday.
Toyota will install the new unit in Sorocaba, a city in Sao Paulo state. The unit will have a capacity to produce 150,000 light vehicles per year and will start its operations in 2011.
According to Jorge, Toyota's investment was unveiled by company regional president Shozo Hasebe in a meeting with Brazilian President Luiz Inacio Lula da Silva.
Global automakers are interested in expanding their presence in Brazil to take advantage of record domestic demand.
Surging local demand is being fueled by solid economic growth and economic stability, which has increased household incomes and access to credit.
Domestic auto sales hit a record in the first half of 2008, totaling 1.41 million units, up 30.0% from the same period the year before.
Volkswagen to invest up to $1 billion in new U.S. plant in Chattanooga UPDATE
FRANKFURT (Thomson Financial) - Volkswagen AG (other-otc: VLKAF.PK - news - people ). said it will invest up to $1 billion in a new plant in Chattanooga in the U.S. state of Tennessee.
The factory will at the 'first stage of construction' have an annual capacity of 150,000 vehicles and will start operations in early 2011, the company said in a statement.
The first vehicle to be made at the factory will be 'a new midsize sedan' tailored to the U.S. market, the German carmaker said.
'We will be selling 800,000 Volkswagen per year in the U.S. by 2018, and this new site will play a key role,' chief executive Martin Winterkorn said in the statement.
Volkswagen said it originally short-listed 25 potential sites for its U.S. plant and picked Chattanooga because it 'slightly' outperforms the next-best candidate sites in terms of nearby automotive suppliers, qualified workforce and properties.
maria.sheahan@thomsonreuters.com
mas/sal/mas/sal
IBM to invest $1.5B in New York
The Ottawa Citizen
International Business Machines Corp., the world's biggest computer-services provider, agreed to invest $1.5 billion U.S. for computer-chip manufacturing and research in New York state, creating 1,000 new jobs aided by $140 million in government subsidies. The agreement, announced by the company and state officials, also calls for the company to retain more than 1,000 existing jobs at its East Fishkill research and manufacturing facilities, which are to be upgraded, according to a statement by Gov. David Paterson. New facilities include a semiconductor manufacturing plant and development centre in a still-to-be-determined upstate New York location.
