Toyota profits - "The sky is falling..." - GreenHybrid

bwilson4web · #1 (**permalink**) 05-09-2008, 05:08 AM

http://www.toyota.com/about/news/cor...inresults.html

Quote:

...
Commenting on the results, TMC President Katsuaki Watanabe said, "For this fiscal year, we posted our highest ever results in both revenue and profits. There are two key points for these results. First, our profit structure has become more geographically balanced, with growing contribution from resource-rich countries and emerging countries. We believe our growth strategy of utilizing every opportunity across the full product line-up and in all regions have shown strong results. Second, net income has steadily increased due to the growth of operating profit from global operations and equity in earnings of affiliated companies. Growth of equity in earnings has been particularly strong and has more than doubled over the last four years, mainly due to the rapid growth of Chinese operations." ...

Last October I moved the bulk of my 401k money from USA money and mortgage funds to overseas using funds that specialize in yen and euro based companies. So I was a little curious about recent reports like "Toyota profits warning ..." (Times Online), "Toyota Profits Down" (WSJM, Michigan), and "Toyota profits drop" (Autocar). Then I read Toyota's annual report and realized that once again, the fastest way to ruin is to follow the financial headlines. They are blowing out of proportion someone's speculation and ignoring the solid financial performance of Toyota.

One reason for hybrid interest is the claim by skeptics that Toyota was losing money on their hybrids. So the market moves to embrace hybrids and fuel efficient vehicles and no doubt the skeptics are going to 'connect the dots' and ignore the inconvenient truth ... Toyota is no where near going out of business and the hybrids are a major market presence.

I may move some of my 401k money over towards mortgage investments as soon as GW vetoes the current bill. The rule of thumb is to buy low and sell high and GW continues to deconstruct that part of our economy. Timing for the lowest price is not always possible but you can get a good deal from time to time.

Bob Wilson

tanstaafl14 · #2 (**permalink**) 05-14-2008, 08:35 AM

There's an easier way to profit from the demise of the Yankee greenback. Several ETFs track foreign currencies. There's FXE (euro), FXY (yen) & FXF (Swiss franc). Those are just the ones I know off the top of my head; there are others as well. All can be bought/sold just like stocks, and many have options.

"Even in the worst of times, someone turns a profit." -- Ferengi Rule of Acquisition #162

Pravus Prime · #3 (**permalink**) 05-15-2008, 10:58 AM

Where have you been? The stock market has worked in this obscene way for years. It's not a matter of profit or loss anymore, it's a matter of actual vs projected.

You have two companies:

Company A is a dynamo, making lots of money with a solid reputation and a good product. At the start of the quarter, they have been predetermined by market analyisis to make a projected 1.7 billion dollars next quarter in profits. At the end of the quarter, their profits are 1.6 billion. Articles about how they don't meet projections abound, articles about what's wrong with the company and who should be fired circulate all the trade rags, and the stock price dips.

Company B has no real product, and has for the last 3 years posted a loss for every quarter. They are projected to lose 800 thousand dollars by the next quarter. At the end of the quarter, articles abound about how great this quarter was and how they're the company to invest in now, because they lost 600 thousand in the quarter and the stock price skyrockets.

That's how the modern stock market works, and has worked for far too long. It's also why there's such a short term focus at every big company despite their product lifecycles, because the executives all get bonus' or golden parachutes for meeting or exceeding market forcasts, and the only way they can do that is to focus only on short term and make absurd (to the long term) decisions. Even articles suppositioning that a company may or may not make their expected profits can have an effect on the companies stock price.

Some people have blamed this shift on the day traders, others on the futures market rubbing off on shareholders, and some on too many short term investors compared to long term investors on the market. Many "old school" investors blamed the internet for introducing too many "stupid" investors looking to make an overnight fortune and buying without any idea of what they're buying, just looking at the bottom lines and accounting divisions who try to make their company look appealing by doing what they can to those bottom lines.

BTW, both companies I used in my example are real, and both went through the situation that I described, though I did make up the projected amounts; company B is/was Amazon.com.