Thursday, August 04, 2005

Profit Falls … or Does It?

Toyota Motor Corp., or as I like to call The Big Japanese Monster, announced today that their “fiscal first-quarter profit dropped 7% as soaring global research and expansion costs and a strong yen offset higher sales.”

Now, if I was an investor i.e. if I had any money, I would see if their stock fell following this news and then immediately buy their stock. Of course, their stock closed at $76.13 so it’s a pretty expensive stock to begin with.

The point of this long-winded post is to say that if you are an investor and are looking to invest in a company then its better to invest in one who’s profits have fallen due to higher R&D costs than in one who’s profits have fallen due to a SEC investigation.

The full story, as reported in the LA Times.

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