Investor Brain

Saturday, September 30, 2006

Test-Driving Luxury Sites

Note to readers:  This article was published in conjunction with Barron’s annual luxury car issue.  The article was short (by my standards) since there is a table accompanying the piece, plus an ad and a fair amount of white space.  I’ve restored some of the comments that didn’t get into print. 

CAR MANUFACTURERS SEEM TO THINK their websites must be packed with flash and glamour. Flash animations of vehicles travel the screens of many without prompting. And most make it way easy to find a live sales rep at a dealership. Yet key consumer information is often hard to locate.

Still, shopping for a car on the “Net is a great way to get a head start on the purchase process: You can get a feel for how much you’ll have to pay without leaving your desk. Just don’t expect to be able to complete the process online.

One of the better online offerings is http://www.bmwusa.com), “>BMW’s (http://www.bmwusa.com), which provides a 360-degree-view of your chosen vehicle, including interior and exterior colors. There’s just enough animation to keep the site interesting, but not so much that your browser bogs down. You can find a local dealer, and even search through dealers’ used-I mean, “pre-owned"-inventory, and save your searches for future reference. There’s also a section under the “Vehicles” menu where you can look at coming models.

http://www.cadillac.com)">Cadillac’s site (http://www.cadillac.com) lets you put together the car you want, and then search through the inventory at dealerships nearby to find whether an exact match is available. The Website gives you the ability to easily contact a GM certified Internet Manager to help answer your questions.

I like the “Which Lexus Fits My Budget?” feature on the http://www.lexus.com), “>Lexus site (http://www.lexus.com), found under the “Financial Services” tab. This site also gives those interested in Lexus hybrids tips for getting the most out of their cars.

http://www.audiusa.com)">Audi (http://www.audiusa.com) seems to assume that you know all of its models specifics, since the details aren’t available online. The configuration tool begins with choosing a model, even though there are no data, beyond the MSRP, to help you make that choice. Once you put a car together, you’re directed to a dealer for a quote.

http://www.infiniti.com) “>Infiniti (http://www.infiniti.com) not only lets you select a vehicle; you can get pre-approved for financing as well. The “Help Me Decide” feature, available on the first two screens of the configuration utility, provides useful information that is buried on most other sites.

I BOUGHT MY “MOMMY CAR,” a 2000 Dodge Grand Caravan SE, on http://www.carsdirect.com). “>CarsDirect (http://www.carsdirect.com). Shopping online was ideal at the time, as I was just completing a move from Japan back to the U.S. Time was my most precious resource, so doing the research and getting 95% of the way through the buying process without human intervention (a.k.a. pushy salespeople) was an enormous help.

The purchase process has changed at CarsDirect, however. Now you can only get as far as specifying the features you want before being prompted to have a human being call you with a quote-and a sales pitch. You can deal directly with the CarsDirect staff, or you can opt to talk things over with a local dealer.

The site lets you compare up to four vehicles side-by-side—very helpful in sorting out specs such as headroom, legroom and exterior dimensions.

When I bought my Caravan—at the time a hot model—I paid $8,000 below what a dealer had quoted me on the same car (down to the vehicle identification number). CarsDirect even delivered the car to my home, and we finalized the deal at my living room table. 

The good deals aren’t quite as apparent now, however. Most luxury-car models are quoted at their MSRPs, and can’t be bought directly from CarsDirect. Instead, it virtually escorts you to a dealer to complete the transaction. Times have changed, and not entirely for the better.

Table:  The Internet Highway

Most of these Websites offer terrific graphics, sound clips and animation and, frequently, the ability to view a vehicle from many angles. Some are light on key data, however—even price.

Site Address What’s There
Audi http://www.audiusa.com Little detail on each model available. Configuration tool, however, is fun. 
BMW http://www.bmwusa.com “Build Your BMW” feature lets you specify your desired options and provides a quote. 
Cadillac http://www.cadillac.com User-friendly path to explore and compare models, configure one, get a quote. 
Ferrari http://www.ferrariusa.com Lots of pretty pictures, but not much information. 
Infiniti http://www.infiniti.com “Help Me Decide” offers useful configuration details. Financing pre-approval possible here. 
Jaguar http://www.jaguarusa.com Flashy intro page. Pricing and offers easy to find. Can search for used vehicles, too. 
Lexus http://www.lexus.com Good financing tools, lots of useful info on the “Models” page. 
Maserati http://www.maserati.com Great graphics, photos and video. Nothing on pricing; maybe buyers don’t care. 
Mercedes http://www.mbusa.com Very comprehensive. Good configuration tools. Lots of video. 
Porsche http://www.porsche.com/usa Includes sound files, so you can hear that Porsche growl. 
CarsDirect http://www.carsdirect.com Luxury-car quotes don’t offer much in the way of discounts. Car comparison is handy. 

Published in Barron’s, September 25, 2006.

Wednesday, September 27, 2006

Note to Zecco Founders

Hey guys.  You need to hire a copy editor for your site.  There are so many typos and grammatical problems that the site looks amateurish.  The buzz I see that you’re trying to spread is that you plan to “take on E*Trade.” Ummmm, good luck with that. 

According to Om Malik’s GigaOm in a posted dated last Thursday entitled, “Skype backer takes on ETrade with free trades,” Morten Lund, one of Skype’s early funders, is now backing Zecco, a site that will allow free stock trades. 

The site is festooned with blurbs such as this one, which comes from the “About Us” page: “And you can even share your own thoughts. By signing up as myZecco member and contribute your thoughts and ideas. Big or small. You are more than welcome.” The opening page asks the musical question, “Are you interested to join?”

I spent part of last week in Prague, and lived for several years in Japan.  I’m getting a definite “English as a second language” feel from the writing on Zecco.  So a note to the founders and site designers:  People might not trust their money to you if they feel the site looks cheap or quickly cobbled together.  Find someone to clean it up.

As for the ballyhoo about the trades being free, here is my comment posted on GigaOm: “This isn’t a new idea. It’s been done. One of the other pieces of revenue for E*Trade, and quite a few other online brokers, is payment for order flow.

“When you enter a stock or option order, some brokers employ technology that seeks out the best price. Say you entered an order when the markiet is at $10/share. A broker who offers price improvement might find you a trade at $9.98. If you were trading 1000 shares, you just saved $20.

“But other brokers route their orders to market makers who PAY THEM for your order. Why? Because they are either selling from their own inventory, or bumping the price a smidgen and taking it from you. So your order when the market is at $10 might get executed at $10.05.

“Now your “free” order just cost you $50.

“I will cover this topic in more depthy in my Barron’s column (”The Electronic Investor”) in the not-too-distant future.”

As for the community promised in Zecco’s marketing, that’s being done at TradeKing and other sites right now, so that’s not a brand-new idea either.

That said, there are people who look for only low cost when choosing a broker.  They may be attracted to Zecco based solely on the “Free Trades!” campaign.  But they may end up annoyed by the Google text ads sprinkled liberally all over the page.  Once the site is open for business in approximately 280 hours, I hope to take another look. 

Sunday, September 24, 2006

A trip to Prague

Last week, I was invited to give a talk in London to a group that is putting together an online brokerage site.  Since I don’t (yet) review UK-based online brokerage sites, it wasn’t a conflict of interest to give them an update of a talk I’ve done from time to time with the theme of “How to be an Award-Winning Online Broker.” I’m happy to present it to any group that sends me a plane ticket and puts me up in a nice hotel. 

As long as I’d made the trip across the pond, I decided to spend a few extra days somewhere else in Europe. I hadn’t yet been to Prague, and wanted to visit before they convert to the Euro (not for a few years, so you still have time).  After spending two full days in London, I left for Prague on Wednesday afternoon.

I decided to go cheap on the transportation from my London base to Heathrow, so I took the Tube (Jubilee Line and transfer to Circle Line at Baker Street) from Canary Wharf up to Paddington Station, then hopped on the Heathrow Express there.  The total elapsed time was actually 20 minutes or so less than the drive in from Heathrow on Sunday afternoon, and I imagine it was a lot less expensive.

The flight to Prague was uneventful.  I was hoping that getting through immigration would be more interesting, but it went very quickly—which actually *is* interesting, since that’s usually a long ordeal.  I changed some money (exchange rate is about 22 Czech units to $1 US) and then bought a 3-day transit pass, which lets me take all the buses, trains, trams and funiculars I want.  The three-day pass cost about as much as each round-trip tube ticket I bought in London, and 2/3 of the Paddington Express ticket. 

A quick recommendation on exchanging money:  Use your ATM card to withdraw cash from their machines.  Your bank will slap on a fee for using an out-of-system ATM, but it ends up being cheaper than exchanging US dollars with an agent.  I did this in both London and Prague and got better rates than if I’d handed money over the counter.  I also used my credit card for as much as possible; those guys really know how to get good exchange rates!  OK, back to the story. 

I had to haul my stupid huge suitcase onto a bus, and then haul it off and carry it down two flights of stairs to get to the train, then haul it back up two flights of stairs when I got to my destination in the old town in Prague.  Finding the hotel was a little tricky, especially rolling the big suitcase over cobblestone streets, but I made it.  My hotel, U Kocku (pronounced “ooh coach-ku") is on Karlova street, which is basically the extension of the Charles Bridge to the north.  Lots of restaurants, souvenir shops, crystal stores, and so on. 

I didn’t get to my hotel until about 8PM, and then was starving, so after settling in I took myself out for an evening stroll around the old quarter while hunting for food.  I tried to order food at a restaurant that has a terrace overlooking the Charles Bridge and across to the castle, which is beautifully lit, but they had stopped serving food at 8.  Pout.  Eventually I found a little dive where I had some of the local cuisine—garlic soup, pork cutlet with a spicy mustard sauce, and a huge pile of chopped raw vegetables.  Plus a glass of red wine.  The garlic soup was VERY garlicky; I felt I was in no danger of being attacked by a vampire that evening.

My dinner surprise was a charge added to my bill that I didn’t understand, for 70 Czech crowns (a little less than $3.50).  It turns out that they charge when they put a big tray of condiments on your table, whether you use them or not.  I used about a tablespoon of vinegar.  I learned over my next three dinners that just about every restaurant charges some kind of fee just for sitting down.  This place had the highest charge; the more expensive restaurants charged less. 

On Thursday, I joined the 6 hour “Ultimate Walking Tour,” which also included a boat ride and a tram ride.  We started in Old Town Square, then went to the Jewish Quarter, then down to the river for a ride, then back to Old Town for lunch, then across the Charles Bridge and on to a tram that took us up to the castle district.  We walked past the Loreto and onto the grounds of Prague Castle, and poked around a bit there.  Then all of a sudden, the six hours was up.  It flew by.

I used my honed naviguessing skills to find the store that the guide told me might carry an adapter so I could recharge my computer.  I ended up going directly to the store he’d told me about—but they didn’t carry adapters. An English-speaking helpful sales dude told me about another store that’s near the next stop on the subway system, so off I went.  Having bought a three-day pass at the airport on Wednesday night, hopping on and off trams, subways, buses and so on is really easy.  His directions out of the subway were a little vague, but I stumbled on the place about 2 minutes before they were to close, and came away with my prize. 

That evening, I had dinner in a restaurant right on Old Town Square.  Very charming, and a fun place for people watching. 

Friday I decided to poke around more in Old Town and to visit the Jewish quarter.  It struck me that all the places I would want to visit would be closed on Saturday for Sabbath and Rosh Hashanah, so off I went.  I got a ticket that gave me access to six places and started off at the Maisel Synagogue, an interesting building filled with fairly old silverwork and such.  Apparently quite a few of the items in this display were stolen from other synagogues around Europe by the Nazis, who had planned to use Prague’s Jewish Quarter as their place to show off artifacts after they’d finished their extermination program.  Creepy.

I also visited the Spanish Synagogue, which is a beautiful Moorish building.  It continues the story being told in the Maisel, displaying some more recent silverwork.  The Klausen Synagogue focuses on educational topics, but the Pinkas Synagogue lists the names of the 80,000 Czech Jews who were killed during the Holocaust.  The Pinkas also has a room full of artwork done by children at the Czech concentration camp.  It’s very moving.

I was fascinated by the Old Jewish Cemetary.  Because the Jewish community was walled in and their movements were restricted, they also didn’t have much in the way of options when the time came to bury someone.  There aren’t records left to say how many people are buried here, but the graves got stacked on top of one another and the headstones were also just jammed in as close as
possible to the appropriate grave.  It was used for about 400 years, ending in the late 18th century.  I took loads of pictures.  Right next to it is a small museum that details burial customs.

I then walked over to the St. Agnes Convent, which is now being used as part of the National Gallery.  It’s filled with Czech art dating back to the 11th century.  After that I slaked my thirst with a beer and a snack, and rested up for dinner. 

I spent Saturday on the other side of the river, in and around Prague Castle.  The (literal) highlight was climbing the 287 steps to the top of the Old South Tower of St. Vitus Cathedral, where I also took loads of pictures.  I also went through several museums dedicated to the history of the castle and the art collected by the various kings and emperors over the 1000+ years the castle has existed. 

Then I strolled over to Restaurant David, as recommended by my dad, and had a wonderful meal.  My other three dinners have come with bowls of chopped tomatoes, cucumbers, and red peppers when I ordered a salad, but the David uses lettuce in their salads.  I also had a yummy roast veal dish with a mushroom sauce.  My waiter brought me a complimentary glass of dessert wine with the check. 

I walked off dinner by heading back across the Charles Bridge and over to my hotel.  On Sunday morning, I had to wake up very early to get all my junk downstairs when the car came to take me to the airport.  It was a great trip.