Toyota Stock

That's exactly right. Most of Toyota's near-term (think 5-year) expected profit and market gain is already built into the stock price, including the Gen III Prius. If individual stock picking is somebody's poison, the best time to buy is when an otherwise good company faces a short-term financial hit coupled with a PR disaster that sends the stock price spiraling artificially low, sometimes absurdly so. A perfect example is Exxon stock price in the months following the Valdez spill.

 

There is no such thing as "built into the market pricing."

I've beaten the S&P with 85% of my picks the last 2 years.

But I suppose that is stricktly luck.

Or maybe it's by finding gems like TRMD the Danish shipping company that pays a 15% dividend and has a PE just over 3...... There are tons of undervalued companies in the market right now, you just have to have an eye for the future.

Think there's a limited supply of oil in the ground? Try, SLB, or French integrated champion TOT. These aren't chance players.

Think there's a limited amount of Copper in the earth? Try FCX and PCU. These are companies that remained undervalued in today's market.

All you have to do is use your noggin.

Mutual funds more often then not do nothing but underperform and cost investors billions in management fees. Talk about a racket...

Sure there will be morons out there that lose their shorts because the stock just kept climbing and they had to get in..... (this will be Google's tale in 18 months)....... But that isn't investing with a plan. It's investing by looking at upward trends in charts. Truely a recipe for disaster.

 

Amen ...

 

Proven??? By what sort of double-blind scientific study??? What you really mean is that some people have beaten the market. I point out that others have been wiped out. There's always an element of gambling.

Over the long term, you are right about index funds. I include them in my mix. But I also have some other types of funds the meet my needs or my outlook.

 

TM bought back over $20B of it's own stock this year @ $120, a vote of confidence if there ever was one.

Watanabe-san forecast flat US sales next year but growth in China, Russia and India.

TM invests more in R&D than any other manufacturer and has less long-term debt than others, too.

They make few mistakes and are always coming out with new product. They could generate a new vehicle every 18 months if they chose to, but are restraining themselves for political reasons.

Consider the latest concepts like the A-BAT hybrid and you'll see they're a generation ahead of anyone else.

I bought more TM this month.

http://www.autobloggreen.com/2007/12/27/detroit-08-preview-toyota-a-bat-concept/

 

The point that some have made is that "so and so is already built into the price", etc ... what I am saying is that it's been proven that you can have all the pertinent info out there and STILL outperform the market in general ... stocks aren't always fairly valued. Some are arguing a strong form of market in that research, etc cannot bear any fruits in returns, but IT HAS BEEN PROVEN to be false ... the market is semi-strong, but there's plenty of room to make money.

Of course there are people that have been wiped out ...

 

In '99 and '00, I knew plenty of stock-picking chest pounders who had it all "figured out", bragged about retiring early, lost 80-90% of their portfolio in the ensuing fiasco, and never recovered since then. To wiser folks out there, just take the time to throughly read up on what people like John Bogle and Peter Lynch have to say about the wisdom of wagering a significant portion of one's net worth on individual stock picking. Those people who invested according to churches of Bogle and/or Lynch over the past few decades are far wealthier than the rest.

The bottom line is that the market is irrational and unpredictable because most investors are irrational and unpredictable. No amount of research and planning at the individual investor level could ever compensate for the sheer greed, fear, and ignorance driving the stock trades of the majority. Fortunately, things tend to balance out more than not at the index levels, but are truly chaotic at the level of individual stocks. With very, very few exceptions, any average Joe who tells you they have figured out how to beat the market with stock picking and market timing is piloting a ship ripe for sinking, as is anybody who listens to them.

 

How about this. We come back here in 6 months time. I'll pick Toyta to beat the S&P in what everyone admits is a troubled auto sector.

When inflationary pressures are starting to push 3 to 4 %, the only foolish people are those that follow the herds and invest in indexes returning 5 to 6 %.

Wait until inflation pushes the 7-8% limit.....

 

No one is saying to load up on one or two individual stocks ... no one is talking about market timing or stock "picking" ... it's about making VERY educated choices (the best way to remove TRUE risk) and using an accurate valuation method to determine if a stock is undervalued or not.