Anything Japan Can Do, China Can Do

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	Friday, May 2, 2008 Whitelist Us         Your Next Car Made in China? By Charles Delvalle Did anyone honestly ever think that Japan would conquer the U.S. when it came to making cars? Would you believe it if I told you that cars from China WILL one day present a threat to the Japanese automakers? 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. INTERNAL ENDORSEMENT Recession in 2008? Here’s how to Make a Fortune! It is often said that stocks take the stairs on the way up... and the elevator on the way down. It’s true. When investors hit the panic button, look out below. And there are a lot of signs to suggest more downside is on the way in early 2008. Are you prepared to profit if this happens? Is your portfolio protected? Either way, you’ll want to learn about a trading service that can provide protection – an advisory that has already produced gains of 203%... 129%... and 101% in just the last few months. To learn more, please continue reading...   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. I have no fear that China will do what it needs to make some compelling rides. Already some of these Chinese manufacturers are spending more per car on R&D than most of the major car companies. And over time, as these companies advance their manufacturing, engineering and design skills, these cars will compete with the best. And they’re coming to America… Granted, these Chinese companies still have to work for a few more years to really hone in on their manufacturing and production skills. That means making cars that will pass all crash tests, cars that won’t break quickly, and cars that people generally like. After they do those things, they’ll have to find a way to compete against the big boys. And they’ll do that the Hyundai way: By going cheaper! You see, up until recently Hyundai and Kia were the ‘cheap’ cars. But that’s changing. Hyundai is hell bent on starting a luxury division. And the base price of their four-cylinder Sonata is actually more than a four-cylinder Camry! In just two to three more years, nearly every Hyundai will be just as much as a Toyota. And that leaves a big opening for Chinese car companies. If they can compete on price while constantly improving quality, they’ll make out well. In fact, they’ve already hinted at releasing a four-door $10,000 car. And since these are all small companies, even selling 100,000 to 200,000 cars a year in the U.S. is enough to boost profits substantially. There are a few Chinese car companies out there, but I still need to do some research to feel good about giving you a few names. Look for that in the next few weeks. In the end, China will be huge in the automotive world. Now we have a chance to make some money off of it. To your success, 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! Market Watch Ride or Slide: Sadia S.A. (SDA) By Charles Delvalle There’s a reader out there by the name of John M. And I like him because he asked me to review a great company. He wrote in with… Charles, What's your opinion on Sadia, the Brazilian food company?  Ride or slide? Thx, John      John, there’s something I LOVE about Sadia’s (SDA) chart. You see, Sadia just hit a new high this week! Not only did it hit a new high, it did so by rallying nearly seven percent! As Tony the Tiger would say ‘That’s GRRRRRREAT!’. When you see a company break through resistance and hit a new high, it’s usually a good sign that the company will keep moving higher. Sadia is a particularly strong company. You can find their products and meats in the freezer isle in rapidly growing Brazil. Considering that Brazil is growing by over seven percent and food prices are doubling almost every year, this company should easily see huge profit growth in the future. While I’m not excited about their margins, they do seem average for the industry. Yet their return on equity is 25%, revenues are growing by 26%, and earnings by 32%. And if you look at value metrics like cash flow to market cap, then you’d notice that this company has NEARLY A THIRD of their market cap covered by cash flow! That’s amazing! I think it’s obvious Sadia S.A. (SDA) is a long term ride. P.S. Want to see me cover a stock?  Send an e-mail to feedback@investorsdailyedge.com INTERNAL ENDORSEMENT Let the Demise of the Dollar Lead You to 1,000% Gains   As the dollar continues to erode, so will the accounts of those who rely solely on the usual stocks and bonds. But the demise of the dollar won't be a calamity for everyone...      Click here if you want to learn how to protect your wealth... AND make the kind of gains that most people could never dream of... returns like 5,131% in just 30 months!   If you enjoy IDE's daily investing advice, you'll definitely be interested in checking out our sister publication, Early to Rise. Each morning, you'll get powerful wealth-building advice covering real estate, entrepreneurship, personal finance, marketing, and much more. Sign-Up for Early To Rise today! To unsubscribe, Click here To change your email address, Click here To cancel or for any other subscription issues, write us at: Investor's Daily Edge 245 NE 4th Ave, Suite 201 Delray Beach, Fl 33483 Phone: (800) 681-4759	The Market Minute Consumer Spending went up… At least that’s what the market wants us to think. While the headline said consumer spending rose 0.6%, the truth is almost all of that gain was attributed to higher gas and food prices! In the end, consumer spending only increased 0.1%. Be sure to always dig deep into any government reports to make sure that you fully understand what’s happening in the economy. It’s one of the surest ways to make money in the stock market.     In The Markets   Last Change YTD Dow 13,010.00 189.87 -1.92% Nasdaq 2,480.71 67.91 -6.47% S&P 500 1,409.34 23.75 -4.02% Gold 851.50 25.10 2.18% Silver 16.14 0.70 9.28% Oil 112.24 1.22 16.94% Nat Gas 10.55 0.37 41.04%   Newsworthy Birmingham, Alabama's mayor accepted more than $156,000 from the head of a regional underwriting firm that reaped more than $6.7 million in fees from bond offerings and interest-rate swaps, the U.S. Securities and Exchange Commission said. Mayor Larry Langford got the undisclosed payments when he was president of the Jefferson County commission from William Blount, chairman of bond underwriter Blount Parrish & Co., according to a complaint filed by the SEC in U.S. District Court in Alabama. Langford selected the Birmingham-based company to participate in every county municipal bond offering and swap agreement in 2003 and 2004, the SEC said. Blount, his firm, and lobbyist Albert LaPierre were also sued by the SEC. "These defendants engaged in misconduct that defrauded Jefferson County and municipal bond investors," David Nelson, director of the SEC's office in Miami, said in a statement. "By failing to disclose the payment, they deprived Jefferson County and investors of an objective and impartial bond underwriting process and swap agreement negotiations." The allegations stem in part from Blount's role in bond and swap transactions for the county's sewer system that have since pushed Alabama's most-populous county toward bankruptcy. It is the SEC's first fraud charges involving swaps tied to state and local government bonds and comes as the Justice Department is also investigating whether banks conspired to fix prices of municipal derivatives and investment agreements -bloomberg.com     Meet the Team MaryEllen Tribby - Publisher Jedd Canty - Business Director Jon Herring - Editor Nicole Reynolds - Marketing Analysts / Editorial Contributors Michael Masterson Charles Delvalle Andrew M. Gordon Dr. Russell Mcdougal D.D.S. Rick Pendergraft - Managing Editor

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