March 12, 2010
I have not personally seen any Toyotas zooming out of control, but the malfunctions, whatever their source, will ultimately be found and fixed, and it is unlikely that Toyota will suffer grievous financial harm over the long term. There is a reasonable argument that Toyota's stock is a worthy buy just now. For contrarian investors, those who swim against the tide, investments that are shunned can produce plump profits when the pendulum of investor favor swings back.
The media is making hay about Toyota's supposed "hubris," their drive to get to the top of the automotive heap and how Toyota may have sacrificed quality to get there. It's hard to sell news when all you can say is "some machines didn't work and then got fixed." No drama there. But you will find plenty of automotive drama in that grand proscenium, the US Congress. You remember the Congress. That's where not long ago the top brass of the US auto makers were hauled before a panel of inquisitors and castigated for doing a terrible job, for bringing the industry to the brink of bankruptcy. After the scolding, Congress gave the automakers billions in bailouts. So, Congress is once again scrutinizing the industry and deciding what to do about Toyota (between breaks for tickling, apparently). Among the ideas being floated are a government-mandated brake override and "black box" data recorders like those in aircraft.
Earth to Congress: how about dealing with matters of state? I heard you were trying to do something useful about healthcare - keep trying. Maybe take a look at spending, work on that a little. But cars - stay out of that business. I have a couple of good mechanics. Butch Newland at Hollywood Service and Paul Ferrel at Ferrel's Garage are two people I trust with my cars. The last thing I want is Congress under the hood.
GTC
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).