General Motors' (NYSE: GM) Chevrolet is number one -- the number one most stolen brand in 2001, that is. For specific models, the 1991 Toyota Camry topped the list, and the Honda Accord was also popular among pilferers. It seems that just like honest folk who actually buy their vehicles, the thieves prefer Japanese cars but American-made trucks and SUVs.
The Motley Fool 50 index is equipped with theft-deterrent devices, but went nowhere today.
In today's Motley Fool Take:
Sayonara, Big Mac. With sluggish burger sales cramping operating results, McDonald's (NYSE: MCD) will be closing a record 130 eateries in Japan this year. Are prospects dimming for Ronald McDonald in the Land of the Rising Sun? Well, not exactly. The world's largest restaurateur will also be adding another 220 locations this year.
However, with 3,500 units in Japan already, the net gain of just 90 Golden Arches will result in measly chain growth of just 2.5%. McDonald's owns a majority stake in the Japanese venture, so watching so few additions and so many subtractions to the unit count is cruel math indeed. Granted, there are more fearsome foes than the Hamburglar at play here. An outbreak of mad cow disease has scared some folks away from beef consumption. But there's also the possibility that the concept has either overdeveloped in Japan or that the novelty is simply wearing thin.
For years, McDonald's global expansion has been a media magnet. Footage of drive-thru lines running blocks long (or, as was the case in Kuwait City in 1994, a stunning seven miles long) have become de rigueur every time the company enters a new foreign territory. Whenever the domestic market struggled, prompting critics to call the stateside boom oversaturated, the company was always able to take out the Risk board and point to the growth possibilities.
However, just as mad cow disease held back sales at Mickey D's in Europe last year, it is an important reminder that while diversification overseas comes with a good deal of opportunistic optimism, it also carries the baggage of economic, political and social risk. There is no free lunch in the fast food space, but do you want some fries with that?
Has McDonald's outgrown its Arches? Is this a warning for Wal-Mart (NYSE: WMT) investors cheering the discount retailer's roundabout entry plan into Japan last week? All this and more -- in the McDonald's Discussion Board. Only on Fool.com.
Has this happened to you: Your mutual fund did nothing for your net worth, yet you have to report capital gains on your tax return? "But I didn't sell anything!" you protest.
If you hold mutual funds in a taxable account, then you know what we're talking about. During the year -- usually in November or December -- mutual funds distribute capital gains and income to the fund shareholders. Even if a fund loses money during the year -- which is the case for most funds in 2001 -- shareholders may still have to report taxable gains.
This "fund-nomena" may have recently been driven home as you prepared your tax return. However, it's not just extra work at tax time. A KPMG study of stock mutual funds from 1988-1997 found that the average investor lost 2.6 percentage points of performance to taxes.
So, how can you avoid this problem during next year's tax time? Here are a few ideas:
- Keep funds in your IRA: If your total portfolio is a mix of funds and individual investments, relegate mutual funds to your tax-friendly accounts.
- Invest in index funds: The average index fund has much less turnover than the average actively managed fund.
- Seek "tax-efficient" funds: Mutual fund companies have begun to recognize the messy tax nature of funds, and have created funds designed to keep the problems to a dull roar. Because this type of fund is relatively new, the choices are limited and their histories short.
- Avoid funds: Plain and simple, don't invest in mutual funds. This is only an option if you are comfortable, talented, and interested enough to pick individual stocks and/or bonds.
- Choose exchange-traded funds: ETFs are essentially index funds that trade like stocks. (Standard & Poor's Depositary Receipts (AMEX: SPY), or "Spiders," is a well-known example.) However, ETFs have some tax advantages over mutual funds. First of all, when investors want to unload their shares in a mutual fund, the fund may meet redemption requests by selling their securities -- a taxable event. However, when folks want to get rid of their ETFs, they just sell them on the open market. The company that runs the ETF is not involved. Another factor is the "redemption in kind" feature available to institutional investors. It's too complicated to go into here, but know that it adds to the tax efficiency of ETFs. (For more info, check out this article from Mutual Funds magazine.)
Still looking for a tax deduction AND want to make sure you have enough for retirement? There is a solution: Open an IRA. You have until April 15 to fund an IRA for 2001. What are the tax benefits, you ask? Let us count the ways:
- If you're eligible for a deductible traditional IRA, your taxable income is reduced dollar-for-dollar by how much you contribute to the IRA. Then, the investments in the account grow tax-deferred until you make a withdrawal.
- If you're eligible for a Roth IRA, you don't get a deduction, but the investments grow tax-free. In other words, as long as you follow the rules, you won't ever have to pay taxes on that money.
- Even if you're ineligible for both the deductible IRA and the Roth IRA, you can still fund a non-deductible traditional IRA. You won't get to reduce your taxable income, but you still get the benefit of tax-deferred growth.
For more on IRAs and opening an account, visit our IRA Center.
When President Bush decided to impose tariffs of up to 30% on steel imports earlier this month, there were cries of protests and threats of legal action from other countries. Things may come to a head this week as the European Union and U.S. officials meet in Geneva to discuss the EU's concerns.
The EU is retaliating on two fronts. First, it will seek compensation from the U.S. under the World Trade Organization's "Safeguards Agreement." But administration officials have made it clear they don't think the EU is entitled to compensation.
The EU's other move will be to erect some trade barriers of its own, probably in the next few days. According to CBS MarketWatch, the EU will impose import quotas in order to protect its own steel makers from a sudden influx of product that was diverted from the U.S. One EU spokesperson said, "We are considering and studying possibilities of how to best defend against the unfair protectionism taken by the U.S."
The White House was stung by remarks from Treasury Secretary Paul O'Neill last Wednesday. O'Neill, who's always been viewed as a loose cannon, told members of the Council on Foreign Relations that Bush's tariffs were a mistake. Always a free-trade advocate, he said the restrictions will hurt other steel-buying domestic industries more than it will help the steel makers, and will cost more jobs than they will save.
The steel will thicken in the next few days, so stay tuned.
Where does Microsoft take on the World Wrestling Federation, and Intel challenge the Boston Celtics? Why in our latest Stock Madness contest, of course. Play to win free admission to the Panning For Gold: Find Great Stocks online seminar, and more.
Beleaguered insurance, investment, and lending firm Conseco (NYSE: CNC) is asking most of those who hold its $2.5 billion in bonds if it can pay them... later. As much as two and a half years later. The cash-poor company is aiming to delay cash payments and, in return for cooperation, is offering the bondholders a guarantee of higher repayment priority.
As if inquiries into its accounting practices aren't troubling enough, Global Crossing now being investigated a federal grand jury. At issue is the offering of the company's IPO shares to union officials who sat on the board of an insurance and investment firm that made more than $300 million on Global Crossing stock.
The battle over the proposed merger between Hewlett-Packard (NYSE: HWP) and Compaq (NYSE: CPQ) is heating up as tomorrow's deadline approaches. While most institutions are likely to support the merger, a New York Times article (free registration required) reports that Walter Hewlett is succeeding in winning over individual investors with ads calling the proposal "a $25 billion mistake."
Computer security software specialist Network Associates (NYSE: NET) apparently has changed its mind. After spinning off McAfee.com (Nasdaq: MCAF) in 1999, the company is trying to buy back the 25% of shares it doesn't already own, planning to combine the two firms.
Wimps of the world, rejoice! Biotech company MedImmune (Nasdaq: MEDI) has a flu vaccine in the FDA approval pipeline that's delivered by nasal spray, not injection. The FDA is expected to offer a decision on FluMist in July. If approved, this would be the first nasal vaccine.
As Enron and Arthur Andersen Turn: Enron's face turns red as reports emerge that Vince Kaminski, a risk-management executive, warned the company almost three years ago that its off-balance-sheet financial partnerships were not only "stupid" but also fraudulent. Meanwhile, major customers continue to tell Arthur Andersen that its services are no longer needed and its European units are trying to separate from the company. Firms including Sara Lee (NYSE: SLE) and Brunswick Corp. (NYSE: BC) have dropped the firm, while customers such as Wyeth (NYSE: WYE) and Oracle (Nasdaq: ORCL) are thinking it over. So far, Hershey Foods (NYSE: HSY) has decided to stick with Andersen.
Today on Fool.com: Zeke Ashton defends the PEG ratio as a tool for small-cap investing.... A $1 car wash shows high margins aren't always meaningful.... Learn about a mutual fund's NAV in Fool's School.
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