Napoleon Bonaparte once said an army marches on its stomach. He'd be happy with today's Take, which features a McDonald's french fries surprise and more bittersweet news from the increasingly nasty chocolate war in Hershey, Pa.
And as if that weren't enough (and by golly, don't you think it should be?), you may really get indigestion when you find out just how much of your mutual fund returns are being eaten up by taxes.
The Motley Fool 50 and the other market indexes were puréed today, losing more than 4% of their value. But enough of the appetizer. It's time for the main dish.
In today's Motley Fool Take:
- McDonald's Offers Happier Meals
- Quote of Note
- The Chocolate War
- Discussion Board of the Day: Food Industry
- Give Less to Uncle Sam
- Shameless Plug: Selective Service
- Quick Takes: Ford, Avon, Colgate-Palmolive , more
- And Finally...
In a surprise move today, McDonald's
Why risk changing wildly popular products? It's simple: The world's No. 1 fast-food chain is succumbing to growing pressure from groups and individuals about the unnecessary health risks associated with its fare. Much of the credit goes to the Center for Science in the Public Interest (CSPI), the nonprofit organization that has been after McDonald's nuggets for years for unnecessarily contributing to America's obesity problem. The group has also produced data on Chinese, Mexican, and other restaurant fare, and publishes a list of the best and worst fast foods.
For all the criticism the CSPI receives, it looks like it's actually making some headway. ''This doesn't turn french fries into a health food,'' says spokesperson Margot Wootan in USA Today, ''but McDonald's should be applauded for taking a step forward.''
And applaud we will... especially since the company isn't stopping here. Its eventual goal is to eliminate all trans fatty acids from its oil. That's especially "heart"-ening considering that millions of people chow down at Mickey D's every day.
We're not being Pollyannaish, here. We know the health impact will be minimal. But we're encouraged by the new trend, especially since it's a winning situation for both the business and the consumer... and we can expect other restaurants to jump into the same frying pan.
"I've been on a diet for two weeks, and all I've lost is two weeks." -- Totie Fields, singer and comedian
Remember the book The Chocolate War? It's happening again, though this time, the ramifications are looming far larger than poor Jerry Renault's refusal to participate in his school's chocolate-sale fund-raiser.
With Hershey Foods
Reports that first broke in the British press over the weekend now have Cadbury Schweppes
The sale of Hershey isn't exactly news. The company announced its intentions in March, when Milton Hershey's charitable estate -- the majority-owning Hershey Trust Co. -- announced it wanted to diversify. However, it's only now, nearly six months later, that food conglomerates are going cuckoo for cocoa's puff.
Last month's $11.5 billion offer by Nestlé was more than fair. With food companies trading for roughly one-and-a-half times trailing sales, the Swiss giant's bid valued Hershey at a little more than two-and-a-half times the company's annualized revenue. Hershey's brand, like the many nuggets in its brand portfolio, is clearly significant.
However, despite Hershey's global prowess, this bidding war won't escalate much higher. While Hershey locals are doing their best to block the bidding process and force a Swiss miss, there's too much money at stake.
No company is an island, even if it's self-billed as the sweetest place on Earth.
Will joy return to the maker of Almond Joy? This is no Jolly Rancher. What do you think of the sale of Hershey? Will it be another stateside titan scooped up by a global juggernaut? All this and more -- in the Food Industry discussion board. Only on Fool.com.
We know you're all good, apple-pie-eatin', Mom-lovin', gas-guzzlin' Americans, but patriotism doesn't mandate you to pay more in taxes than necessary. Unfortunately, that might be what you're doing, according to a new study by mutual fund info-snooper Lipper.
According to the study, almost one-fourth of the typical mutual fund's returns are consumed by taxes. We're talking about the capital gains and income distributions made by funds each year to shareholders. When you sell the fund, you'll have to pay additional capital gains (assuming you made a profit, which -- historians tell us -- did happen in the stock market some time ago).
But don't despair, all ye fund-lubbers. Thanks to the Mutual Fund Tax Awareness Act of 2000 (which didn't take effect until this year), fund families must provide the after-tax returns in their prospectuses. These returns will be based on the top tax bracket, so those numbers won't be as bad for most people. And if the fund is in a tax-friendly account, such as an IRA, taxes aren't a consideration at all.
But if you have mutual funds in a taxable account, here are some ways to keep more of your money by giving less to Uncle Sam:
Invest in index funds: Not only do index funds charge virtually nothing in fees (0.2% to 0.4%, compared to the industry average of 1.25%), but the turnover is very low.
Choose individual stocks: If you're comfortable evaluating businesses, then buying and holding the stocks of good companies is very tax-efficient. It can also be cheap, if you use a discount broker or a dividend reinvestment plan.
Look for tax-efficient funds: These are funds that seek to mitigate the damage wreaked by taxes. According to the Lipper study, the after-tax returns of tax-efficient funds led the pack in many categories.
Keep funds in IRAs: If you're infatuated (trust us -- it's not love) with a fund that has a so-so after-tax record, keep it in an IRA, where earnings are tax-deferred or tax-free (depending on if it's a traditional IRA or a Roth, respectively).
- Don't invest in a fund right before distributions: It doesn't matter how long you've held the fund; if you're an owner on distribution day, you'll have to pay the taxes, even if you got in just a week beforehand. Call the fund family and inquire about distribution plans before investing. Most funds distribute income and capital gains toward the end of the year, but distributions occur at other times, too.
Shameless Plug: Selective Service
What's the best-kept secret at the Fool? Certainly not David Gardner's love of meringue! No, it's The Motley Fool Select. Every month, our writers produce outstanding analysis of companies worthy of your investment consideration. Subscribing to Select may feel like joining an exclusive club, but this is one secret we don't mind letting out.
The Wall Street Journal (subscription required, free trial available to Fools) reports today that New York's attorney general, Eliot Spitzer, is investigating executives at Citigroup's
Freight hauler Consolidated Freightways
Want more proof that beauty and household products aren't skipping a beat? You're soaking in it. Colgate-Palmolive
There's an about-face going on at Stilwell Financial
Global Crossing, the troubled telecom services provider that's replacing the chicken and the road as the most popular "crossing" joke, is still trying to gain enough strength to try and cross again. The company, still under bankruptcy protection, reported stronger-than-expected financial results for the month of July. With $231 million in revenue for the month and $797 million in cash, investors need to realize the hurdle is as high as the list of creditors is long.
Today on Fool.com: Help! Are there better stocks for Rule Breaker?... Matt Richey criticizes one of his favorite companies.... In Fool's School, when buying a car, shift the bargaining power back to you.
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