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Car Rental in Ireland-To Insure or Not?

Four days ago, I returned from a fabulous 10-day vacation in Ireland and Northern Ireland with my wife.

Car Rental in Ireland

To Insure or Not?

10 Stocks to Buy & Hold Forever


Four days ago, I returned from a fabulous 10-day vacation in Ireland and Northern Ireland with my wife.

Highlights included:

A visit to the Giant’s Causeway,

A couple of days in the far north of County Donegal, where we met no other Americans,

A serendipitous visit to the International Sheep Shearing contest at Ballinrobe Racecourse,

Great music both in and out of churches,

A hilarious visit to a Belfast pub where the barman pointed out my resemblance to Gerry Adams and one wag commented, “If you’d a been here t’irty years ago you wouldn’t be here,”

A visit to the village (Ballyeaston, County Antrim) where my wife’s great-great-grandfather was baptized,

And great food and drink everywhere.

I won’t bore you with pictures.

But I do want to focus on the details of renting a car in Ireland, where, of course, they drive on the “wrong” side of the road.

A month before the trip, I reserved an economy car through Budget for the low price of $10 a day (before fees that made it about $20 a day). I declined the offer of insurance, as is my custom in almost all circumstances.

(For background on the logic behind this, see my column of May 10, 2010 here, which concludes with the precept, “Only buy insurance for things you can’t afford to replace.”)

Upon arrival at the Budget counter at Shannon Airport, I was again offered the chance to buy insurance, at the cost of $34 a day (more than the cost of the car rental).

Again I declined, and not because the credit card covered it. In fact, Ireland-along with Israel and Jamaica-is one of the countries that Visa, MasterCard and American Express all specifically exclude from coverage.

The woman behind the desk commented, “You’re taking a big risk driving in Ireland without insurance.”

To which I replied (with uncharacteristic wit), “Why, are the Irish such bad drivers?”

I got a smile.

But I had to sign more papers, attesting that I declined insurance.

Plus my credit card was dinged for a 2,000 euro deposit.

Eventually, I ended up with a bright blue Nissan Micra with 36,878 kilometers on it. You can’t buy a Micra in the U.S., though you can get one in Canada for $9,998 (Canadian). It’s the cheapest new car in Canada-for good reason.

It’s 13 inches shorter than the Nissan Versa.

It weighs 2,300 pounds (less than half the weight of my Tesla Model S).

And like most cheap small cars, it’s a manual, in my case with the stick on the left side.

Here’s a picture:

I had chosen an economy size car reasoning that the smaller the car, the less chance I’d inadvertently hit something. My wife pointed out that if we did hit something-like one of the big tour busses that carry around most of the tourists that visit from countries that drive on the “correct” side of the road, we’d be better off in a big car.

As it turned out, the only thing I hit was a curb. No damage was done, and when I turned in the car at the Dublin airport, I got my deposit back-having saved roughly $340.

Now, I recognize that some aspects of my behavior will be viewed as foolish risk-taking by some people-perhaps the majority.

I admit that driving on the “wrong” side of the road was risky. But with a vigilant navigator, I was prepared. And the car enabled us to avoid the crowds on those busses, and to visit parts of Ireland those folks will never see.

As to driving without insurance, the logic of which is explained in my earlier column, I know most people wouldn’t do it.

In the long run it makes economic sense.

Most people, sadly, prefer to pay for security.

Which is why the insurance companies are so successful!


As to the market, the bulls remain in control.

So, you can take the low-risk route to investment success and buy “safe” stocks.

Or you can take the high-potential route to investment success by buying some of my “10 Stocks to Buy & Hold Forever.”

The goal, remember, is not to identify stocks that can give you a decent long-term return, like Johnson & Johnson (JNJ) and DuPont (DD).

The goal is to identify stocks that can make you rich!

I want to identify the next (AMZN), the next Apple (AAPL), the next Google (GOOG) and the next Tesla Motors (TSLA).

To recap, the key attributes I look for are these:

1. A product or service or business model that is revolutionary.

2. A mass market.

3. A company that’s still small enough to grow rapidly.

4. A company that is not respected-perhaps not even known-by the majority.

5. And last but not least, a stock that’s trending up, indicating that investors’ perceptions of the company are improving. This is important because perceptions are always at least as important as reality.

Also, I keep in mind the words of Thomas Phelps, who wrote, “Perhaps the greatest advantage of all in buying top quality stocks without visible ceilings on their growth is that when we do so we give ourselves the chance to profit by the unforeseeable and the incalculable.”

In these days where information flows so rapidly that we risk drowning in it, I like Mr. Phelps’ reminder that the unknown can be even more important. It reminds me to think long and hard about where a company might be years down the road, when it’s far out of sight of the vision of today’s analysts.

Which brings me to today’s stock, number two in the series, “10 Stocks to Buy and Hold Forever.”

Autohome (ATHM)

Autohome is a Chinese stock that came public December 11, so if you haven’t heard of it yet, you’re in the majority.

But the company’s potential for growth is huge, which is why it makes the cut for this list of 10 stocks that could be huge winners.

Autohome’s business model is simple. It wants to be the center of all consumer-oriented automobile information in China. Today, the company’s business is centered on two websites, and (You can actually look at these and have Google translate them into something resembling English).

But in the future, the sky’s the limit (remember the power of unforeseeable and the incalculable), because the Chinese automobile market, though still rather young, is already bigger than the U.S. market (which has been shrinking) and has much further to go.

Autohome began operations in 2008, and is still growing fast; revenues grew 70% in both 2012 and 2013.

In the first quarter of 2014, revenues grew 67% to $55 million and earnings (unusually) were flat at $0.13 a share. Analysts are projecting that the company will see earnings hit $1.03 this year, for growth of 45%, and that’s probably conservative.

Autohome’s revenues come mainly from dealers. During the first quarter, Autohome provided services to 12,659 dealer subscribers, more than double the number served in the first quarter of 2013. As for customer eyeballs, average daily unique visitors to the company’s websites grew to 7.2 million for the quarter, up from 5.9 million for 2013.

Last but not least is the chart. ATHM came public at 17, but never traded lower than 26. It peaked at 52 in early March, and (probably) bottomed in early May at 28. In sum, the hot air is out of the stock.

However, the lockup period for the stock that began with the IPO will conclude on June 9, so there’s a risk that the stock will be depressed by the selling of early investors cashing out after that date.

How big a factor that post-lockup selling will be remains to be seen. Optimistically, I expect to see a floor in the stock at 28, but I could be wrong.

Long-term, however, I’m very bullish on both the stock and the company, and think that buying low will work out very well in the years (hopefully decades) to come.

In the meantime, if you want stock selections that are a little more timely-meaning they’re stocks that are going up now-I suggest you take a look at my Cabot Stock of the Month, which focuses on one stock per month, and is quite affordable, too.

Yours in pursuit of wisdom and wealth,

Timothy Lutts

Chief Analyst, Cabot Stock of the Month

Publisher, Cabot Wealth Advisory


10 Stocks to Buy and Hold Forever

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Timothy Lutts is Chairman Emeritus of Cabot Wealth Network, leading a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems.