Ever wonder whatever happens to those tweezers and Swiss Army knives confiscated by airport security? Well, if your contraband was taken in Oakland or Sacramento, you can probably buy it back on eBay
The California Department of General Services has raised more than $16,000 since November by selling commonly seized items on the popular auction website. Ripe for the picking, the Los Angeles, Ontario, and Orange County airports are next on the list of fruit-bearers.
California gives half the sale money to the federal government and keeps the rest. The state, however, doesn't want to stay in the auction business. A spokesman told CNN, "This program could be over tomorrow," and said he'd much rather see the items left at home.
In today's Motley Fool Take:
- Fire Your Fund
- Quote of Note
- Consumers Feeling Spent
- Shameless Plug: The Happy Couple
- Palm Needs a Hand
- Discussion Board of the Day: Video & PC
- Quick Takes: Capital One Financial, ImClone Systems, General Dynamics , more
- And Finally...
Some of the best arguments for choosing an index fund were recently made by CBSMarketWatch
The main point: Your mutual fund isn't going to let a little thing like poor performance keep it from charging you an arm, a leg, and a pinky toe in fees. Ferrell cites some startling statistics, including that fund managers make an average of $436,000 a year.
He also demonstrates how Fidelity Magellan shareholders are paying four times as much in fees to underperform the Vanguard 500 Index over the trailing one-, three-, and 10-year periods. And that doesn't account for the 3% front-end load just to get in the fund!
But you don't have to be a Fidelity investor to overpay for underwhelming results. With typical fund managers still losing to their comparable indexes, you should question why you're paying them at all. Let's face it, losing to an index fund is one thing, but paying someone to lose to an index fund just adds insult to injury.
So, are you overpaying your fund manager? Here are some areas to investigate:
Start with your fund's long-term performance. Has it beaten the overall market over the past three-, five-, and 10-year periods (if it has that long of a history)? Past performance is not an indicator of future results, but with fund managers, it's all you've got.
Ferrell quotes index-fund innovator John Bogle as saying that mutual funds understate their real cost to shareholders. Transaction costs, tax consequences, and other hidden fees eat into returns. To see how much might be lost to brokerage expenses and taxes, check the fund's turnover, which measures how often stocks are traded in and out of the fund. The Vanguard 500 has a turnover rate of 4%. That's hard to beat.
Consider whether you'd be better off with Spiders
(AMEX: SPY)or exchange-traded funds. Or, if you're just too attached to the old-fashioned mutual fund, at least find a better one with low fees and proven, market-beating returns.
"In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." -- Warren Buffett on his and Berkshire Hathaway partner Charlie Munger's feelings on derivatives in his annual letter to shareholders.
If the mighty consumer is beginning to wane, we could be a long way from an economic recovery. Consumer spending is the key to the economy, representing two-thirds of U.S. Gross Domestic Product (GDP), the broadest measure of economic health.
Encouraged by surging home prices and the lowest interest rates in 40 years, U.S. consumers have been on a borrowing binge to fuel an increase in spending, which has been the economy's main source of support during the economic downturn.
However, U.S. consumers reduced their real expenditures in January by 0.3%. Though not a large number, this could be a sign the burdens of consumer debt and a weak job market are beginning to pressure purchasing decisions. Spending on durable goods fell 5.7%, the biggest drop in 13 years, and wages and salaries in the private sector also fell slightly.
High debt levels, particularly in relation to income, are causing concern for policy makers across the globe. In December, despite continued economic weakness, the Bank of England chose not to lower interest rates, fearing the move would encourage further borrowing and stoke the fires of an already sizzling home market. The thinking was that increasing demand now could lead to a sharper, more unpredictable fall in spending in the future, which is almost certainly a road to recession.
If the economy remains weak, interest rates aren't likely to rise anytime soon; however, if and when rates do begin to rise, the comparable increase in variable-rate debt payments could be the final blow to the consumer pocketbook.
On a brighter note, businesses appear to be gaining confidence and increasing spending. Corporate share repurchases are also on the rise; several large companies, including Altria
With demand for equities remaining weak, the economy and the stock market could be treading water for the foreseeable future, at best. And even if businesses step up to the plate in terms of capital expenditures, replacing a significant drop in consumer spending would be a huge challenge. Being painfully selective in your investment decisions is more important than ever.
Don't they make an attractive pair? Act fast and get both Stocks 2003 and The Motley Fool Select in a bargain bundle. Don't miss our picks for 2003 and monthly analysis of undiscovered gems (and the occasional contrary view of well-known companies, too)!
At issue is the handheld-device maker's fiscal Q3 sales outlook, along with charges for restructuring purposes and to write down its Silicon Valley real estate.
Palm now anticipates revenues of between $205 million and $210 million for the quarter. Previously, the company forecast sales of $230 million to $250 million. Year-earlier Q3 sales were $292.7 million.
It pointed to weakened demand for its high-end Tungsten T handheld model as part of the reason for its lower-than-expected sales. The company cut prices (to $399) on the Tungsten T in early February, but that wasn't enough to make up for lackluster demand. Palm blames a poor corporate IT spending environment for the shortfall.
That raises some questions about its just-released $549 Tungsten W and its corporate target market. The PDA/cell phone combo is getting rave reviews for its PDA capabilities, but poor marks for its phone use and average grades for email. Without a speaker or microphone, one must use the earbud for calls. That's a big disadvantage over similar products, such as Handspring's Treo 300, which can be held right up to the ear like any other cell phone. Palm will offer a $40 flip cover in June to alleviate this problem, but that seems like an afterthought for basic functionality.
With sales of the cheaper Tungsten T lagging, it's hard to imagine the Tungsten W -- and its expensive idiosyncrasies -- catching on quickly. For Palm, continued high-end handheld weakness will be painful.
Given the rumor about Microsoft and Electronic Arts, do you see the video game industry consolidating in coming months? Will Zelda's release later this month save Nintendo? All this and more -- in the Video & PC discussion board. Only on Fool.com.
Shares of Capital One Financial
Samuel Waksal faces more charges today. The former ImClone Systems
Two deals from the defense sector today: General Dynamics
In local news, the first shipment of pet rocks arrived at Aunt Gurdy's General Store last night. "We may be a bit behind the times here," said owner Gertrude Cook, "but my Ouija Board told me these rocks will do even better than the Rubik's Cubes did last spring."
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Rick Munarriz offers 10 stocks trading at single-digit P/E multiples.
- Matt Richey takes a look back at his most influential investment lessons.
- Berkshire guru Warren Buffett shares the Cliffs Notes of his annual "state of the company" letter.
- Microsoft and Electronic Arts are rumored to be interested in video game maker Sega.
- In Fool's School, what exactly is in the Dow?
Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim
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