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Letter to the Editor

This article originally appeared in the October 2002 Issue of INSIGHT

Totals Add Up Negatively

It sure is tough to maintain any enthusiasm about investing when the NASDAQ, for example, drops to a six-year low.

Last month real estate was suggested as an alternative, perhaps a trip to Las Vegas. I was in Las Vegas on business last week, invested two nickels in a slot machine, two dollars came out, and I quit a winner. Percentage of return was great but total reward not much.

Incidentally, the Continental pilot on my way home announced that there was a new "crew" tax of ten percent on passengers' winnings, so I had to send four of my hard-earned nickels up to the cockpit. The pilot later told me that there was a ten dollar minimum, but in my case he waived it.

The Market certainly reacted positively to Jim Dickens being made a senior vice president at CCC. The stock was up three dollars for the month.

Jim has held a number of sales and marketing positions at CCC, and they certainly seem to be on track with first their concentration on core businesses and now Jim's promotion. CCC stock now sells for about one-half its all-time high - not bad for a tech stock where ten cents or less on the dollar is more common.

Both Sherwin-Williams and PPG have apparently been impacted by the lawsuits regarding lead in paint that are now moving forward. The most important lawsuit is in Rhode Island in which the state is suing a number of paint manufacturers over past and present lead-related health issues.

Our INSIGHT Fund Index started out strong in January, up just a hair under 16 percent. This month, however, it is a bit on the negative side, down minus 0.66 percent this month, its first bad time since February. Still, our fund is in much better shape than the Dow, down almost 18 percent this month on September 15, and even lower during the following week.

The Collision Repair Industry in terms of number of insurance paid claims is flat to down, perhaps as much as five percent from last year, a year which, incidentally, was not exactly a banner year.

Severity is up and, most importantly for the Collision Repair Industry, the number of "totals" is way up, negatively impacting repair volume.

Chief causes appear to be a combination of increased repair costs resulting from more air bags and other safety items coupled with a weak valuation in the used car market. These factors limit the dollars available for repair if a total cost of repair exceeds 65-70 percent of the actual cash value (ACV) of the vehicle.

Will things get better? I hope so. Will things improve this year? Will we be at war at the end of 2002? If so, what impact will war have? Stay tuned.

-Charles Baker-

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