Last week's answer
Headquartered in Lake Forest, Ill., I'm 158 years old and a global leader in marine engines, pleasure boats, fitness equipment, and bowling and billiards equipment. I take in nearly $4 billion annually, 35 percent of which comes from my boating business, 43 percent from my engines, 12 percent from my fitness division and 10 percent from my bowling unit. My brands include Mercury, Mariner, Mercury MerCruiser, Sea Ray, Bayliner, Hatteras, Meridian, Sealine, Baja, Boston Whaler, Trophy, Princecraft, Hammer Strength and ParaBody. In 2001, I sold my Hoppe's, Zebco (North America) and Igloo Coolers businesses. Who am I? (Answer: Brunswick)
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Can you afford college?
A college education is expensive. But that's not the worst news. The real kicker is that a diploma has become significantly less affordable over the past year.
According to a recent study by the National Center for Public Policy and Higher Education, "College Affordability in Jeopardy," tuition at public institutions is rising, while financial aid is shrinking. Many states are experiencing budget crises and are responding by reducing their support of colleges and universities. Meanwhile, colleges and universities, faced with budget shortfalls, are upping the cost of fees and tuition. It's true that financial aid is often available to help defray costs, but student financial aid has not been keeping pace with tuition hikes.
According to the study, states have increased tuition by as much as 24 percent. Earlier this year, the College Board announced that tuition at four-year public schools rose an average of 9.6 percent. Meanwhile, state support for higher education grew just 1 percent, on average, nationally.
America has a noble yet flawed idea about a college education: A diploma is worth whatever price is paid. Sure, plenty of studies find a college graduate will earn almost twice as much as a high school grad over the long haul. However, as growth in tuition has outpaced overall inflation and personal income, more and more students are graduating with crushing student-loan debt.
Something has to give. Will only middle- to upper-income families be able to afford college? Will schools cut funding for extracurricular activities, such as sports programs, that don't pay for themselves? Will people still want to pay thousands of dollars for a class on philosophy and "Star Trek"?
Before that future plays out, do what you can to keep your own college costs down. Start saving as soon as possible, and seek out schools that will provide the most brain for the buck.
To learn more, visit our College Savings Center at www.fool.com/csc/csc.htm, or check out our new book, "The Motley Fool's Guide to Paying for School: How to Cover Education Costs From K to Ph.D." (The Motley Fool, $12.50). You can also learn a lot at www.collegeboard.com and www.savingforcollege.com.
A short story
My dumbest investment was shorting eBay back in 1998. I shorted it at $10 per share, then $12 per share, then $15 per share (prices are split-adjusted). I watched my money go out the window. Now I have no shorts in my portfolio and will never short again. -- F.K., via e-mail
The Fool Responds: Shorting -- i.e., betting that a stock's price will fall -- is a tricky business and should be practiced only by experienced investors. (And even they can do quite well without ever shorting anything.) When you short a stock, have your broker borrow some shares and sell them for you at what you hope is a high price. If, as you expect, the shares drop in value, you buy them back later at a lower price, replacing the ones you borrowed. (Yes, this is legal and commonly done.) When you short a company, you should be very sure that the company is unhealthy, overvalued and due to fall. Some seemingly overvalued companies, such as eBay, are healthy -- and thwart their critics by continuing to grow rapidly for many years.