Wal-Mart Bans 3 Magazines

Sometimes, comic-book heroes come to life. A man wearing a mask and cape has been patrolling the town of Tunbridge Wells near London, "performing good deeds and scattering terrified bad guys," according to Reuters.

Said one woman who had her stolen purse retrieved: "If only there were more people around with this kind-hearted spirit."

What do masked crusaders have to do with investing? Find out in Unmasking Marvel, where David Gardner reveals how to uncover promising companies before Wall Street catches on.

In today's Motley Fool Take:

Wal-Mart Bans 3 Magazines
Quote of Note
Gillette's Close Shave
Discussion Board of the Day: AOL Time Warner
Taxes Eat Fund Returns
What's an Asset Allocation Plan?
Quick Takes: Ford, Dell Computer, Kmart, more
And Finally...

The largest retailer in the world, Wal-Mart(NYSE: WMT), has told The New York Times that it will forgo sales of three men's magazines that favor running photos of partly dressed females on the covers.

The retail chain's decision to stop selling issues of FHM, Maxim, and Stuff came on the heels of customer and associate complaints "on at least one of those magazines," a Wal-Mart spokesperson said, adding, "They weren't pleased with the offering."

Wal-Mart is already one of the most conservative music retailers in the industry. It banned sales of CDs with explicit lyrics, or sells versions with the profanities removed and, in some cases, the CD cover artwork altered.

Christian groups have played a role in persuading the company to ban aggressive music and racy magazines, which probably helps explain why the retail chain still sells adult-themed computer games. The morality watchdogs perhaps haven't seen the games in action.

The Times reports that Wal-Mart accounts for 15% of all single magazines sales in the United States, but Dennis Publishing USA, owner of Maxim and Stuff, says that less than 3% of its single-magazine sales occur at Wal-Mart. Meanwhile, FHM is owned by Emap of Britain, where company officials disagreed with the ban, suggesting it was singularly subjective.

Wal-Mart has occasionally refused to carry other magazines. It banned one Sports Illustrated swimsuit issue because management had a complaint with one photo in the issue. (Somebody sure looked through the magazine carefully to decide that.)

The magazine ban, of course, won't put a dent in Wal-Mart's $245 billion in annual sales.

Quote of Note

"If Wal-Mart is lowering prices every day, how come nothing is free yet?" -- Anonymous

Gillette's Close Shave

When folks think Gillette(NYSE: G), they think razors. They think blades. So, when you go over the company's first-quarter report this morning, something as unlikely as coppertop batteries saving the day definitely grabs your attention. But, yes, Gillette is the name behind Duracell batteries. The company is also into oral care, as you will painfully discover if you ever confuse the company's MACH3 razor for its Oral B toothbrush.

That's the way it goes with consumer-geared conglomerates, expanding into different and often distant shelves within the same grocery store. If you ever want to score some easy money, bet someone that Sara Lee(NYSE: SLE) also makes hot dogs and pantyhose, or that Campbell Soup(NYSE: CPB) is a producer of spaghetti sauce and Pepperidge Farm cakes and cookies. You'd be right.

So, when Gillette reported a 14% gain in March-quarter sales to go along with earnings of $0.25 a share (which came in on the high end of Wall Street's expectations), it's easy to see why the company fared so well. With homeland security advising folks to stock up on supplies like batteries, Duracells were swift sellers -- and why, oh why, couldn't Gillette also be making duct tape?

But the mad rush to load up on batteries comes with a price. Now that the terror alerts have been softened, consumers are left with a lot of fresh batteries that will eventually be phased out through gradual use around the home. In other words, while the March period was atypically active for Duracell, a lull should be expected over the next quarter or two.

Yet there's one more twist in the Gillette report. The toothbrushes along with the razors and blades also produced double-digit percentage gains in sales. Its razor business, which still accounts for nearly half of its sales, saw the same 16% uptick in top-line growth as the battery side.

If the company continues to gain global market share in its razor business, it will help offset the logical letdown on the battery side, which accounts for less than 20% of its revenue pie.

Another wildcard is its ThermoScan thermometers. Produced under the company's Braun subsidiary, it's easy to see a run on them if the SARS outbreak continues to grow and grab larger-font headlines.

You have to hand it to Gillette. It's got no reason to hide under some five o'clock shadow.

Discussion Board of the Day: AOL Time Warner

Do you think Ted Turner's other half -- the stock that he hasn't sold -- will be worth more or less than the shares he just sold? Do you think Ted will try to buy back some of his entertainment assets from AOL Time Warner? All this and more -- in the AOL Time Warner discussion board. Only on Fool.com.

Taxes Eat Fund Returns

We know you're all good, apple-pie-eatin', Mom-lovin', gas-guzzlin' Americans, but patriotism doesn't mandate that you 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 sometime 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 last 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 funds 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 whether 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 before. 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.

What's an Asset Allocation Action Plan?

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Quick Takes

The Federal Reserve left interest rates unchanged today, but indicated it may lower them in the future, if needed, to help bolster an economic recovery. The key federal funds rate remains at 1.25%, a 42-year low.

Ford (NYSE: F) matched rival General Motors(NYSE: GM) today by offering 0% financing for up to five years on most of its vehicles. What are the pitfalls of 0% financing? Glad you asked.

Perhaps looking ahead to the possibility companies will be required to report stock options as an expense, Dell Computer(Nasdaq: DELL) "plans to pay potentially hefty cash bonuses" to some executives (instead of options), according to The Wall Street Journal.

Kmart climbed out of bankruptcy today, about 15 months after filing for Chapter 11 protection. Since then, it has closed 600 stores and laid off 60,000 employees.

And Finally...

Today on Fool.com:

For updated stories throughout the day, bookmark our ever-changing News section.
Tom Jacobs says pork barrel legislation is corruption, pure and simple.
Dayana Yochim teaches a six-year-old about credit.
Buy, Sell, or Hold? -- Southwest Airlines CEO Jim Parker on airline security, oil prices, and nudity in the cockpit.
The Burton Malkiel Interview, Part 2: The renowned economist reveals his three rules for picking stocks.
David and Tom Gardner say Martha Stewart looks cheap.
Verizon lowers its DSL rates.
Ted Turner cashes out of AOL Time Warner.
In Fool's School, learn to compute your investment returns.

Contributors:
Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim