My Lexus by Toyota Motor Corp (TM)

Making a Christmas List – Part I

It’s that time of year (Thanksgiving) when my family pulls names from a hat and then must buy a gift or gifts for the person they draw. We all add gadgets, toys, dreams and/or necessities to a large wish list that gets mailed back and forth prior to the turkey dinner.

So what’s on my wish list this year?

Let’s start big in Part I.
It’s probably not going to happen because this wish list gift exceeds the spending limit but I’ll ask for it anyway.

A BRAND new 2008 Lexus LS (How about that)!!!

Have you ever watched Entourage on HBO? If so, I’ll take Ari’s car. Outside of an Aston Martin DB9, this is the next car on my list. Luxury, style, quality and affordable!

I bought my first used Lexus in June 2002 when the stock was trading in the $40 range. Toyota Motor Corp. (TM) went on to make a 245% gain over the next four years as I added more than 100,000 miles to the car. I should have taken a car loan and placed the $10k into the stock which would have paid for everything and more with that gain. Unfortunately, I paid for the car in cash and never bought the stock.

I was sold for life over the past five years as I took that car close to 200,000 miles from 70k without a problem. The paint job on that ES300 still looks better than some new cars on the road today.

Based on the experience of my ES300 and my wife’s Jetta, we decided to be Lexus buyers for life. I gave my wife a “December to Remember” in January 2006 when we bought her a certified pre-owned Lexus. It has been every bit as amazing as the first used Lexus. She loves the car and can’t wait to look towards the SUV’s offered by Lexus when we start thinking about children.

Why buy used? I let the other guy or gal eat the depreciation. Why buy a $50,000 car when you can get it for $25k (and it holds its value better than most cars at this point)?

And that’s exactly what I did with my most recent purchase of a used Lexus GS 300. I much rather buy a used Lexus with a few years of wear and tear than a brand new junk box that sells for $25k as well.

Back to the stock:
Toyota (TM) recently violated the 40-week moving average (200-d moving average) which it has held as support over the past four years. Volume is increasing as the stock begins to stumble for the first time since I have been a proud owner of their products (and I will continue to buy from this exceptional company).

I would like to own the stock in a new longer term portfolio I am building for my family that trades more like a Peter Lynch fund with stricter sell rules. I am looking for a consolidation phase that will allow the stock to base before I will grab my first round of shares.

I don’t want to enter a position until the 10-week moving average crosses back above the 30-week moving average. I use this type of technical analysis from the studies of Victor Sperandeo and his four decades of experience on Wall Street.

The $70 to $80 trading area seems like an excellent accumulation area based on the range formed in 2004 and 2005. I can say if TM will fall this far but the first major basing pattern and moving average crossover will be my signal to enter.

Earnings:
5-Year Annual Growth: 27.44%
FY 2005: $6.66
FY 2006: $7.15
FY 2007: $8.55
FY 2008: $9.96E – a 16.49% increase
FY 2009: $10.86E

ROE: 15.48%

I’ll keep a close eye on the institutional sponsorship.

Institutional Analysis:
Total Institutions: 478
Money Market: 324
Mutual Fund: 137
Other: 17

Shares Held: 78.55 mil
Shares Held Previous Period: 74.63 mil

Shares Bought: 11.33 mil
Shares Sold: 7.4 mil
Value of Shares Bought: $1.3 Bil
Value of Shares Sold: $851.39 Mil

Next up in this 5-part Series:

• Part II: I need a Garmin (GRMN) for my Lexus!

Future Wish List Items:

• Part III: A New Suit from The Men’s Warehouse (MW)
• Part IV: A Video iPod from Apple (AAPL)
• Part V: A Blackberry Pearl from Research in Motion (RIMM), using the Verizon Wireless (VZ) Network