Just buy a 1989 Geo Metro or a 1972 Honda Civic.

Both cars got 40 or more miles to the gallon when they debuted decades ago – performance levels the current generation of hybrids are only now starting to obtain.

With their tiny engines and small frames, the cars have long been denigrated as “putz” mobiles and ridiculed for their hopelessly tacky styling.

But now, they’re the ultimate in geek chic and it’s not difficult to understand why.

These cars are teetotalers when it comes to high-priced gasoline. And their owners, such as my friend John, grin ear to ear every time they fill up.

“Especially,” John says, “when I’m parked next to one of those fire-breathing, jacked-up, gazillion-liter pickups.”

But it’s not just the gas mileage that matters to their owners.

In an era where inflation runs rampant, the cars are cheap to operate and relatively dependable – even though some are nearly 40 years old.

But, before you can drive one, you have to get your hands on one, and that’s proving to be an increasingly expensive proposition lately.

Prices for these tiny wonders have literally doubled in recent months at eBay Motors, the automotive sales subsidiary of parent eBay Inc. (EBAY). You’ll find the same soaring prices in various car trading magazines. According to a quick review of AutoTrader.com, many of these fuel-efficient used cars are now approaching five times their Kelly Blue Book value, which makes people like Marci Solomon smile ear to ear.

According to CNN, Solomon bought her 1996 Metro for $7,300. That’s hard to believe, considering the danged contraptions sold for just around $9,000 when they were brand new.

It’s the same with the Honda Civic. Typical “beaters” (modern-day gearhead slang for what our fathers used to call “jalopies”) are available for a few hundred dollars, but good models run into the thousands. Collectors gladly pay even more.

What’s particularly interesting is that the current generation of fuel misers also are already shaping up to be great investments.

A year ago, I looked at a funky, two-door Honda Insight in stellar condition for a mere $7,200. My sons call these the “Ultraman cars,” because members of the Japanese superhero Ultraman team drive them. Today, eBay Motors lists only three Insights, in half as good a shape as the one I reviewed last year, with prices ranging from $11,900 to $14,555!

Meanwhile, first-generation used Toyota Prius cars have also been appreciating rapidly in recent months. The lowest price listing for a Prius on eBay Motors is $9,000, while more recent models are already in the mid-$20-grand range.
I wouldn’t be surprised to see them approach $30k in the next 12 months as gasoline heads even higher.

Talk about a “trade” I wish I’d made… and may still make.

Source: The Surest Way to Double Your Money This Year

From disappointed cavemen to chanting young people who have no shame, I’ve practically seen them all. But I’ve been noticing a little trend and its implications on the financial markets are huge. Let me explain…

The other day I saw a commercial for Dow Chemicals. They talked about how they are using more sustainable ingredients for their cleaning products. They’ve even started a new line of products touting these advancements (at a higher price, of course).

Let’s ignore the fact that the company is still pumping tons of pollutants into the air. The fact is, by making a small change, they can call themselves ‘green’.

Or how about commercials on how Honda and Ford are making huge strides in helping the environment and making the world a better place. Hmm, at least Honda isn’t being green because it’s in fashion. They’ve had one of the most fuel-efficient fleets for a long, long time. Ford, on the other hand, is turning green out of necessity (they won’t make money if their cars guzzle gas).

I swear, I’ve seen hundreds of commercials just like these. All that’s happening is that major corporations are doing some ‘brand’ repair. They know that if they look green in a world that’s moving in that direction, they’ll keep the brand image intact.

That’s not to say that going green is a bad thing, even if the improvement is small. But these companies are all making a far bigger deal than they should be.

As an investor, should you invest in a company that is greening?

Well considering green technology is still at its infancy, it is very expensive. Last time I checked, any company that spends too much doesn’t do very well in the stock market.

Granted, companies like Google and IBM (which have BILLIONS) can afford to turn their entire operations into self-sustaining powerhouses. But smaller companies simply can’t afford the big switch.

What’s the Benefit of Going Green?

So why does a corporation turning green even matter? If you’ve been a reader of my blog, then you’ll know exactly what this means.

There is something you should know about these new initiatives.

THEY ARE EXPENSIVE.

The cheapest solar panels – even after tax credits – cost about 20 cents per kilowatt-hour. Coal costs 5 cents. So for solar to compete effectively, prices have to drop by about 75%.

If you buy a hybrid car, it’ll take between 3-7 years for the extra cost of the hybrid to be recovered by fuel savings. If you buy solar panels, it could take even longer.

Now, I love the fact that the world is turning green. And I’ve said on previous occasions that I think the U.S. needs to speed up its adoption. But for major corporations and even you and me, what is the economic benefit in going green?

In Europe, the big benefit is that companies gain carbon credits that help them stay under emissions caps (and avoid those nasty fines). But in the U.S., the home of no comprehensive emissions reduction pact, lowering emissions only means added expense.

It doesn’t matter if Wal-Mart is willing to pay for an army of inspectors to go from state capital to state capital, letting governments know how to reduce energy usage. In the end, having that army of inspectors is going to hurt their margins and affect their profitability.

With no real economic incentive there, why the heck is turning green becoming such a cultural phenomenon? How is it that a solar company – which hasn’t generated an ounce of profits – can go on to skyrocket 200-300%?

I’ll talk in detail about this next week. Be sure not to miss it, because it’s going to give you a very clear direction for the next big growth market.

Until next time,

Charles P.S. I just started up a new blog and would love for you to check it out. Just go to http://stockcharlie.blogspot.com/. I’ll be giving you my unrestricted opinion on economic developments and the effect politics can have on the markets. Make sure to comment and let me know what you think!

Source: Green Is In… But Why?

To make my point, I’d like to tell you a story.

One of my first cars was a 1996 Hyundai Sonata.

The car was decent, but for having a four-cylinder 148HP engine, my fuel mileage was god- awful. I got 20 miles to the gallon. It didn’t matter if I was on the highway, a city road, or revving my engine past 6,000 RPM while going 110 miles an hour; I always got 20 miles per gallon.

God bless its soul, it tried to get me from point A to point B in good fashion.

But then I had to get the rotors machined. And then the engine started knocking. I got that fixed and of course, the A/C went out. Shortly after that, the transmission started slipping. Let’s not forget about getting the headliner redone, the power windows and door locks replaced, and, well the list goes on.

In the end, the car gave me two and a half trouble free years and then one year of pure hell. So why the heck did I end up buying another Sonata?

Hyundai met my demands as a consumer.

You see, I demanded standard safety features like stability control, a low price, and a great warranty. I was too afraid of paying $356 every month in car payments and then, years down the line, having to spend another $4,000 just to replace the engine.

Hyundai was the only manufacturer offering a 10 year/ 100,000 mile replacement plan. Plus, they were making huge strides in safety and reliability.

So I bought a newly redesigned 2006 Sonata, made at a new factory in Alabama, and with a completely new engine (made in a partnership with Nissan and Chrysler).

And I couldn’t be happier with my purchase.

I have a six cylinder that gives me 29 miles to the gallon on the highway. You barely hear any road noise from the inside. The interior materials are soft to the touch. The seats are more comfortable. And the 235 horses and 226 pounds of torque coming from the engine are good enough to get me to 60 miles an hour in just under 6.5 seconds.

What problems have I had with the car? Not many. In fact, I frequent a forum of Sonata owners and they have very few problems as well. There’s a reason why this car was found to be one of the most dependable.

Now days, Hyundai is announcing record profits and sales across the globe. In fact, they made two completely new cars that are good enough to compete with Toyota, Honda, and GM.

They’re talking turbos, superchargers, double-clutch transmissions, and the list goes on. They were so far from this point just four years ago!

What Hyundai shows is that any manufacturer that can key into what consumer demand and continually make improvements is poised to make a killing.

This brings me to another string of car manufacturers. The Chinese group.

Now, let me get this out in the open.

I would never drive a Chinese car… at least not right now. After numerous crash tests, some of these cars could have caused fatalities at only 20 miles per hour. The engines, interior materials, and designs have usually been enough to cause Henry Ford to rollover in his grave.

Calling some of these companies ‘copycats’ might be too much of a compliment.

So will Chinese cars ever become big? You bet they will. It will just take time.

You see, these are new companies. They don’t have that much experience perfecting their manufacturing process. In fact, some still use forklifts and practically build cars by hand.

Most of these companies have just started R&D departments. Over time, they’ll learn little tricks to enhance their designs and expertise. I have no doubt about that.

Already engines are being sourced from Toyota. Nissan is partnering up with a few. And even Chrysler is offering to show them some tricks.

The inevitability is that these Chinese car manufacturers will do well as long as they continue to improve their cars and meet demand. But I don’t expect every single one to make it out alive.

The companies that fail to come up with inspirational and original designs will be the first to get hurt. Then the companies that fail to bring quality up to where it needs to be will go next.

Just think of Yugo – that cheap car that everyone made jokes about. They didn’t get anywhere because of quality. If China can’t bump up quality, their cars will be a joke too.