Last week’s question

I’m one of the world’s most recognized brands, having begun with a handful of beans in Seattle’s Pike Place Market in 1971. In 1991, I became the first privately owned U.S. company to let part-time workers participate in a stock-option program. I went public in 1992. Since then, my stock has perked up some 3,000 percent. You’ll find my more-than-7,500 retail locations in China, Kuwait, Indonesia, Switzerland, Peru and elsewhere. I’m selling ice cream now, through a joint venture, and tea, through my Tazo Tea Co. subsidiary. I was first mate on Herman Melville’s Pequod, pursuing Moby-Dick. Who am I? (Answer: Starbucks)

Falling stock

I once got a “hot” tip from a co-worker about an up-and-coming company that designed, built, manufactured and distributed the equipment for video teleconferencing. It had several contracts with the Department of Defense and the Navy. I got in on the ground floor, buying 2,000 shares for $1 each. The price went to $3.75 within a few weeks. I bought another 1,000 shares. About three months later, it was at $2, so I eagerly bought another 1,000 shares. Well, in another three months it was back to $1, then 75 cents, and eventually 10 cents a share — even though the product was viable and practical, and there was a market for it. Bad management can ruin it all. Don’t be greedy. Check the company out before you jump in. — John Rannochio, Vista, Calif.

The Fool Responds: It can be risky to buy more shares of a falling stock. But buying more of a rising stock can be bad, too. If you haven’t studied the firm and don’t have a good idea of its fair value, you may be snapping up grossly overvalued shares that are due to drop soon. Beware of those hot tips.

Money-saving tips

On our “Buying and Maintaining a Car” discussion board online, Fools exchange tips and experiences about cars. A while ago, a former car salesman joined the conversation and posted a series of “confessions” revealing what goes on behind the scenes of many car dealerships. Here’s some of his advice.

The turnover at most dealerships is high, with the average salesman lasting only three or four months. So yours is probably inexperienced and, in some cases, as afraid of you as you are of him. He may work 100 percent on commission. Sometimes when things are slow and credit card bills are due, he will be desperate to make a sale.

The sales manager, who often sits at a raised desk, is usually the one you’re actually negotiating with, through your salesperson. He’s under pressure to move cars, as each new car on the lot is costing him money while it sits there. You may get a better deal shopping at the end of the month, when the sales manager will be trying to meet sales targets. He’s likely to have offered special bonuses and incentives to the sales staff.

Car salespeople are interested in selling you what they have on their lot for the most they can get, not in selling you exactly what you want at a price you want to pay. Watch carefully and you might see them ask you what your top few colors are, not the one color you want. They may ask how much you can pay per month, and then ratchet it up, saying, “OK, $200 up to …” (pausing until you blurt out “uh, $250?”).

When negotiating with a salesperson, don’t: (a) act the tough guy, being loud and aggressive, (b) tell the salesperson you’ve read about all her tricks, or (c) pretend you’re rich and will buy with cash. Instead, remain calm and be prepared to leave if anything makes you uncomfortable. A little research can help you talk numbers and get a good price.

Learn more about car buying at www.edmunds.com and www.carbuyingtips.com. And drop by our discussion boards at http://boards.fool.com.

Wormy future?

The first computer worm to infect a cell phone has been reported. That’s right — those expensive phones, with all those features, now come with a worry: security.

Your standard cell phone is not open to a worm (a computer virus that can duplicate itself). But “smartphones” from Nokia, Siemens, Ericsson and Sony are, because they use a common operating system from Symbian, a company jointly owned by these companies and others.

Hackers have been attacking Microsoft’s Windows operating system for years. A big target simply attracts attention. Symbian’s operating system dominates smartphones — a rapidly growing market that’s becoming a big target.

The first worm is not destructive, just annoying. It shortens battery life by constantly searching for Bluetooth wireless devices. It also notifies the hacker community that smartphones are vulnerable. If they take the bait, many of the security concerns that plague PCs will plague smartphones. Yikes — high-margin smartphones might find mass appeal hard to achieve. Symbian is prepared for security problems. For example, since 2002, it has had an agreement with software security firm Symantec. Now that a worm has arrived, can product announcements be far behind?

While today’s problem is wormy, Nokia is probably still happy with its offer to buy a majority interest in Symbian. Microsoft has proven there is gold in operating systems — even with worms in the world.