elroy

Auto Stocks: Value Investments Gone Wrong?

Debt = risk.

Risk is rewarded with potentially higher returns.

In and of itself, debt doesn't make it a bad investment. Back in 2004, the truck business was still running at flank speed. Whether debt is bad or not depends upon the three intertwined cycles -- overall market, industry and company. Back in 2004, all three were favourable. Now, the first two are unfavourable for all, but the company perspective -- products, etc. -- are very favourable for Toyota and Honda.

Why are Toyota/Honda so debt free? Good management? Good products? The answer is yes -- but that's not the whole story.
The Japanese protect their industries and the companies based there have a profitable home market from which to build a world market.

Korea is even worse.

If the US is to ever become an industrial power again, it must have the same trading rules as it's partners -- whether it be Japan, Korea or China. This should be a major issue in the presidential elections, but obviously no candidate understands it.

Impact of GM Destroying the EV1

I haven't seen the documentary but plan to. I am sure that there's more to the story than the "Big bad GM angle" that gets played out constantly. If there wasn't, then there would be millions of Honda Insights on the road since GM gave up this segment of the market.

Our governments -- unlike the Japanese, Korean, etc. -- do more to hurt industries than help. Most of the manufacturing jobs have gone overseas -- you'd think that someone would wake up here and try to help keep the ones that we have!!!