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Toyota - who's buying?
Old 02-03-2010, 09:16 PM   #1
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Toyota - who's buying?

Is anyone considering buying some Toyota stock? Seems like "the recall" doesn't justify a 10+% off sale, YTD.

Pure curiosity. If I had the cash, I'd plunk it down on this concentrated bet. Maybe VTSMX (Vanguard Total Stock Mkt.) has some Toyota in it, but it's not in the top 200 holdings if it is in the fund. Shucks. Probably in the international fund, though.

-CC
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Old 02-03-2010, 09:26 PM   #2
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Not me. This constitutes significant damage to brand equity that has been built up over several decades. You cannot see that asset on the balance sheet, but it exists. Not interested unless the stock (or better yet the bonds) really take a dive. But then, I was never a fan of megacaps.
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Old 02-03-2010, 09:26 PM   #3
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If I had the cash I didnt care about. Id plunk some in too! I see no reason why to bother with them yet. Id wait for another 15% drop before I get interested.

Then again. I am not a very intelligent person.
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Old 02-03-2010, 09:35 PM   #4
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I should've added that I'd try to wait and find the bottom. Again, pure speculation. Just interested in how much damage this recall does.

Full disclosure: 2nd Suburu and 1st Toyota owner.

-CC
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Old 02-03-2010, 09:38 PM   #5
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I should've added that I'd try to wait and find the bottom. Again, pure speculation. Just interested in how much damage this recall does.

Full disclosure: 2nd Suburu and 1st Toyota owner.

-CC
If I was a stock person. im not. I would have been plunking stuff into the other auto makers. Is that called shorting for a bit? Soon as I heard the bad news.

Then again Im not so. Thats what I would have done! yeah!
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Old 02-03-2010, 10:58 PM   #6
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I should've added that I'd try to wait and find the bottom. Again, pure speculation. Just interested in how much damage this recall does.
This brings to mind the quotes about catching falling knives and grand pianos.

I think the way to handle a "Toyota accelerator" or "J&J Tylenol recall" or "Ford Pinto" situation is to have a list of 10-20 stocks that you wouldn't mind owning. Study up on the companies, spreadsheet out their various businesses & product lines and figure out what contributes to profits, learn more about management, and generally become a self-taught expert. Track the company for 6-12 months.

Then wait for them to stumble and see where they should settle out.

A "cheaper" way to handle this would be to buy some nine-month call options that are 10-15% out of the money and then see what happens. But I don't know if an overseas company trades options on its ADRs or if you have to use a foreign exchange.
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Old 02-04-2010, 11:37 AM   #7
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When Toyota said my mats were a danger I looked at their geometry and it just didn't add up, they were no worse than any other mats.

When Toyota said the accelerator pedals themselves need to be replaced, I thought that was odd.

When noise came up about the braking issues, I said to myself, yeah, my prius cuts out the brakes more than other cars with ABS for some reason.

When the Woz mentioned he has proof of an electronic throttle issue, my eyes opened up. I had always suspected the electronics first in these anecdotal reports of throttle issues. Once people realized the issue was really the electronic throttle the stock would surely drop even more. It became clear that somehow Toyota is not showing all its cards.

For the first time in my life, I was tempted to do a little timing maneuver and bet on it with a short term option. I ended up not pulling the trigger though just because I'm not a timing guy.
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Old 02-04-2010, 11:55 AM   #8
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Sort of makes me want to buy Ford instead.

Really though, I think once Tiger makes his comeback in a couple weeks in Arizona at the tournament, Toyota stock will be OK once the media diverts it's attention to the more important Tiger scandal again.
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Old 02-04-2010, 01:04 PM   #9
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Here's James B. Stewart's article from this week's Wall Street Journal on Toyota. You might read his opinion:

Toyota Recall Should Warn Investors Away - WSJ.com

Personally, I think Stewart is the bee's knees and listen to him. But that's just me. He's never steered me wrong, anyway. I think he's the editor or manager of "Smart Money" magazine, as well as, being a columnist for the WSJ.
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Old 02-04-2010, 01:29 PM   #10
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I agree with Stewart in the fact that it's a mechanical problem that they are slow to admit and even slower to fix. I never bought the "floor mat" thing.

I just have trouble thinking this will affect Toyota for years to come. People have short memories or make their decision and are set in their ways, I can't decide. In 2013, "I'm not going to buy a Toyota because they had that accelerator recall in '10", I doubt that. Or, same as Trek, get into a "insert your favorite name brand here" rut, and seldom change.

-CC
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Old 02-04-2010, 01:40 PM   #11
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There was something in the WSJ this morning about 100+ Prius owners are now saying they, also, have problems. I was hoping the Prius would escape this mess but not to be.
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Old 02-04-2010, 02:23 PM   #12
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Sort of makes me want to buy Ford instead.
I can't think of anything that would persuade me to buy a union-made car. I am on my second Toyota and would consider buying another; but if they can't get their act together by the time I am in the market for a new car, there are other Asian manufacturers to choose from.

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Really though, I think once Tiger makes his comeback in a couple weeks in Arizona at the tournament, Toyota stock will be OK once the media diverts it's attention to the more important Tiger scandal again.
Too true!
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Old 02-04-2010, 02:25 PM   #13
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On Fox this afternoon I saw/heard a tape of 911 call from man driving a Toyota and throttle was stuck wide open. Actually happened a few months back. He and his wife were in a panic as they were approaching end of freeway. He's frantic on the phone and 911 operator is trying to help, to no avail. The report says they were at speeds over 100 mph when they left end of freeway. Both were killed and now that family is suing. More bad press for Toyota and it seems like there is no end to it. Reminds me of the Corvair "unsafe at any speed" fiasco.
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Old 02-04-2010, 02:30 PM   #14
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I don't know squat about the auto industry, but I would think with Toyota's history, all they would have to do is offer a 100,000 mile warranty and folks will flock back to them.

As far as going 100 mph in a car that won't slow down, how about turning the key off, or putting it into neutral. Seems like either of these would work.
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Old 02-04-2010, 02:31 PM   #15
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I can't think of anything that would persuade me to buy a union-made car.
I meant buy Ford stock (this is the stock pickers forum).
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Old 02-04-2010, 03:34 PM   #16
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i assume many of you recall the gremlin incident...
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Old 02-04-2010, 06:09 PM   #17
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I don't know squat about the auto industry, but I would think with Toyota's history, all they would have to do is offer a 100,000 mile warranty and folks will flock back to them.

As far as going 100 mph in a car that won't slow down, how about turning the key off, or putting it into neutral. Seems like either of these would work.
Either of these things would be better than going 100mph to your death. Turning off the key makes brake and steering boost disappear, but going into neutral should work, at the possible cost of your engine- though my 2006 car has some sort of rev limiter that I can hit in lower gears on freeway on-ramps. I have no experience with newer automatic transmissions-can you go into neutral at any engine speed?

In a manual trans car its a snap- put in the clutch, steer to the roadside, stop, and turn off the damn ignition.

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Old 02-04-2010, 07:49 PM   #18
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Either of these things would be better than going 100mph to your death. Turning off the key makes brake and steering boost disappear, but going into neutral should work, at the possible cost of your engine- though my 2006 car has some sort of rev limiter that I can hit in lower gears on freeway on-ramps. I have no experience with newer automatic transmissions-can you go into neutral at any engine speed?
AFAIK. I go into neutral in my 2004 Toyota Highlander (automatic transmission) at 60+, just for fun to coast down the hill on the bridge approaching my street. Not sure why, I just like to. But I've never had a problem going into neutral, and the brakes work just fine. And I can shift back into drive with no problem too. Sounds like panic is killing people. Unless there's something going on I don't know about.
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Old 02-04-2010, 07:52 PM   #19
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As far as going 100 mph in a car that won't slow down, how about turning the key off, or putting it into neutral. Seems like either of these would work.
We had a very spirited discussion about this last fall.

Runaway Toyotas - I just don't understand
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Old 02-04-2010, 08:33 PM   #20
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AFAIK. I go into neutral in my 2004 Toyota Highlander (automatic transmission) at 60+, just for fun to coast down the hill on the bridge approaching my street. Not sure why, I just like to. But I've never had a problem going into neutral, and the brakes work just fine. And I can shift back into drive with no problem too. Sounds like panic is killing people. Unless there's something going on I don't know about.
I just read the post by Leonidas in the thread that Gumby provided a link to. Yes, there is something flaky about that Lexus transmission that may not allow shifting to neutral at high speeds. And then, the engine cannot be turned off readily either. It appears the car is "too smart" to allow the driver to override it.

It is a good thing I do not care about expensive cars, and none of mine has these fancy features.

By the way, if the engine is disengaged because the transmission is in neutral, as long as it is idling it still draws a manifold vacuum for the power brake. In fact, the manifold vacuum is highest when one lets off the gas pedal. If the throttle is stuck open, the vacuum is at its lowest and the power-assisted braking is at its weakest. This in conjunction with the powerful engine of the Lexus was the reason the victim burned up the brakes and could not stop the car. This was already pointed out by Leonidas.

Moral of the story: Stick with inexpensive cars. None of this BS drive-by-wire crap. The fly-by-wire systems used in airplanes cost a lot more than these "fancy cars". Just one duplex or triplex actuator costs near $100K, and that is just the mechanical part without the electronics, and one aircraft may have a dozen of these.
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