Thursday, September 26, 1996
Sometimes a Bargain Isn't a Bargain
or
Shiftless In Fooldom
by MF Runkle

Sometimes bargains aren't what they seem. Now, as a word of caution, this is not a Fribble directly related to investing. That out of the way, let me tell you about the Foolmobile. It's a Dodge D-150 Pickup with a 318 V-8. I bought it back in '85, brand new, and have logged about 212,000 miles. At that kind of age things wear out that normally don't get replaced too often. I actually wore out the windshield wiper assembly! It has worn out 2 exhaust systems, two sets of disk brake rotors, and one set of brake drums. None of this is abnormal. Replacing worn out parts is one of the things you have to keep up with if you want to own an old car.

Over the past year, I knew I had to replace the transmission. It was slipping, and they just don't last forever. So, thinking I was Foolish, I went down to the junkyard and bought one ($125). It had a warranty, ten minutes, or ten feet, whichever came first. I paid a mechanic I know to put it in ($480). I knew it was a risk, but heck, it was worth it. No warranty, and I didn't know if this transmission was any good, or how long it would last, or if it could even get me through the winter. However, I would save a couple hundred bucks!

Since my friend did it on his own time, it took a while for him to get to it, then he had trouble getting the bolts out. I was without the Foolmobile for three weeks. Meanwhile, I drove a '64 Thunderbird I've restored. Somebody gashed its side. Finally I got the thing home.

It immediately leaked all over the driveway. Within three weeks it was down a couple quarts of transmission fluid, and something had to be done. This time, I took it to a transmission place. They told me that my friend did an excellent job. However, the bits of metal coming loose out of the mechanisms were eating up the seals. Uh oh!

Do you know how transmissions get in junkyards? They come off junked cars. Junked cars get their because they are wrecked, or more likely, really old and run down. This transmission came from the latter. It was really, really high mileage. I had to replace it with a rebuilt transmission; this one has a one-year warranty. It cost me $1,200. So, I spent $1,800 to do a $1,200 repair so I could save money. Not too Foolish, huh? At least I know the transmission is good now.

A little bit of thought could have saved me a lot of money. Maybe this does relate to investing. How about that great stock I bought on a LAN software company I never heard of? I lost $600 on that one too. I don't even have a spot of oil on my driveway to show for it. There are the stocks I've bought on hype, the Oracle shares I sold on Technical Analysis, I could go on and on. Sometimes being Foolish means taking just a few minutes to think something through. Also, more importantly, the reward for many things is just not worth the risk.

Transmitted: 9/26/96