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Letter to the Editor

This article originally appeared in the September 2007 Issue of INSIGHT

Roller Coaster Ride

I realize that August is usually a great month to head out to an amusement park, but I really have never thought of Wall Street in the same category as Cedar Point or King’s Island - until now. The roller coaster ride these past thirty days at the Stock Exchange has been exciting - scary, not fun. The Market was up, then down, rounding corners at break-neck speeds, and then doing it all again.

At mid-month, the Dow had fallen to 12460. Market watchers blamed a bad stretch in the housing market and a weakening dollar and watched for news from the Federal Reserve. Even more worrisome to investors has been the ups and downs in August at key foreign exchanges, too. I caught whispers of “market adjustment” and even the dreaded “possible slight recession” last week. Is it any wonder that I put off writing my investment page until the very end of the month?

Well, I think I can feel the coaster pulling into the station, at least for now. As I write today, the Dow has pretty much made a safe comeback to 13150. Is the ride over yet? Probably not, but let’s try a nice relaxing merry-go-round for a while, at least until my blood pressure settles down a bit.

The Boyd Group continued its per share price growth this month at the Toronto Exchange posting a share price more than double its January posting. If things keep going along like this, I am looking for a per share price of just under $4 Cdn by the end of 2007.

Two of our refinish paint manufacturers had a good month on Wall Street. Both Akzo Nobel and BASF stock prices were up over 20 percent YTD, and both were in the news. I am sorry to see that BASF has decided to delist its stock from the NYSE in September. I plan to continue reporting on the German chemical maker’s operations here in the U.S. If Akzo Nobel completes its acquisition of ICI in the UK as planned, the Dutch company will control a big chunk of the international paint and refinish marketshare.

Both aftermarket parts companies LKQ Corporation and Keystone Industries had a pleasant ride on Wall Street in August. As LKQ continues to tie up its acquisition of Keystone, both entities’ per share stock prices rose about 30 percent YTD.

Our auto dealer stocks drove in reverse this month at the Dow. CarMax stock, at $21.84 per share, was down almost 20 percent. AutoNation, Sonic Automotive, and the Penske Group had only slightly better showings. All three stock prices were down over ten percent in August.

Auto insurers continued to stall on Wall Street in August. Allstate’s per share stock price of just under $53 was down nearly 20 percent from its beginning of the year mark. Our INSIGHT Insurer Index shows an almost ten percent decline in auto insurers’ per share stock price since January - despite minimal hurricane damage claims so far this season.

-Charles Baker-

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