These days it is hard for anyone to be credible when they say they know what is going to happen next. I am no different. I have a view and for now it is working but that doesn't mean it will tomorrow. I am happy to tell everyone what I think and they are free to agree or disagree. My premise is a simple one but it isn't a happy one. So you may sleep better if you just hit the delete key now. In my view, the problem we all face is a big one. The US like the rest of the world is over leveraged. As anyone who has ever lost their butts trading stocks on margin knows when times are great l...
Even though Ford has about $28 billion in cash, that cash is not going to last forever when you are buringin through between $1- $2 billion per month. Given the current burn rate, I suspect Ford can weather the next couple of quarters, but short term I am extremely bearish on Ford. The consumer is cash and credit constrained at this point and unfortunately you need both in this market to purchase new vehicles. Until the consumer credit market unfreezes, there will continue to be downward pressure on Ford's earnings.
The 30 lowest rated companies in the ETFI Global Auto Makers Index and short ETF proposal lost an astonishing 63.9% in market value over the past year, compared to a loss of 37% each for the S&P 500 SPDR (SPY) and the Consumer Discretionary Sector SPDR (XLY). The index includes companies with market caps over $150M U.S. Dollars which are active in the following business segments: auto/truck makers, motor sports/recreation – e.g. Polaris (PII), motorcycles – e.g. Harley Davidson (HOG), and recreational vehicles – e.g. Winnebago (WGO).
Given the global economic slowdown, lower commodity prices, and cool-down in former red-hot grow markets such as China; the accompanying table presents statistics and an overview of a global transport short ETF strategy for passenger airlines, auto makers, maritime, and trucking companies.
While I am still bullish on the prospects for railroads as a long investment idea and a hedge to these short transport ETF ideas, they will also suffer to some degree depending on the length and depth of the s
An overwhelming 78-12 vote by the Senate sends a massive $634B spending bill to President Bush, who is expected to sign the measure before the government's fiscal year-end comes to a close on Tuesday. The bill contains provisions for $25B in subsidized loans for automakers in addition to removing a ban on offshore drilling on the Atlantic and Pacific coasts. Participating companies from the auto industry would not have to begin repayment of the loans for five years and the proceeds are meant to be used in the d
Top 5 Companies by Market Cap Top 5 Companies by Stock Price Gain
The U.S. auto industry is poised to begin lobbying Congress for up to $50 billion in low interest loans to help them better compete in the global market by upgrading manufacturing facilities and paving the way for the production of vehicles with better fuel efficiency. Last year, Congress authorized $25 billion as part of an energy bill aime
Ford (F) produced its SEC 10Q last Friday showing an incredible $166 billion debt divided between its auto division ($25 billion) and financial services division ($140 billion). For a company that no longer earns a profit, and hasn't had consistent earnings for years, this is ominous. This is a $9 billion market cap company with $1.7 billion in equity.
Investors have to date focused on the auto division's inability to sell cars. The rapidly declining credit division should also be a worry. Remember that $140 billion in debt depends on Ford's SUVs and trucks retaining their value; that's
The above table (click on image for full-screen view) presents a short/inverse exchange-traded fund [ETF] proposal for companies with market caps over $250 million which derive the majority of their revenues from the manufacture and sale of recreational and passenger vehicles. The 25 equally-weighted, active component stocks for Global Auto BEARISHares are rebalanced each quarter based on the lowest ratings, which are calculated as follows: (a) trailing 52-week stock price performance + (b) percentage of total revenues represented by each company + (c) percentage of total...
"One group of stocks that has always intrigued us are those whose symbols have one letter," notes George Putnam. who offers a fascinating review of 9 such single letter stocks.
In his The Turnaround Letter he says, "These stocks have been beaten down pretty badly and now look particularly appealing." Here's a look at 5; the rest are featured in our following post.
"Agilent Technologies (NYSE: A), which makes electronic and bio-analytic measuring devices, was spun out of Hewlett-Packard in 1999. Revenues surged in 2000 as did the stock price, reaching a lofty 162.
Ford (F) delivered an awful quarter with 8.7 billion dollars of losses, the worst showing in its history. What was most troubling for Ford was their $2.1 billion write-down in their credit division due to losses on lease resales at auction. As discussed in my previous article here (Ford's Financial Service Business About to Enter the Red), Ford has been surviving (barely) these past 7 years on income derived from their financial services. From 2001 through 2007, Ford made $21 billion from their financial arm but still went on to lose a cumulative $18 billion! That was their last support.
Keep in mind Ford, has the fewest problems of the Big Three. They lost 8.7 billion in three months. That makes a drunken sailor look pretty damn penurious. Ford is wedded to trucks and SUVs in a time for $4 gasoline. Shit!
There was a moment in April, when Ford surprised with a profit and predicted that they would be profitable in 2009. Then next quarter they realized that higher commodity and energy prices were killing them. Now, there's a fresh 8.7 billion dollar loss .
Ford Motor Company (F) has lost $18 billion in income from 2001 through 2007. Ford just hasn't been able to turn a profit in selling cars.
There has, however, been one consistent earning division at Ford until recently: financial services. Here Ford makes money financing vehicles for dealers, leasing companies and other customers. Ford's financial services section has helped to offset a lot of the Ford's losses.
If it has leverage....Sell it
- The melt down seems to have begun. The Commercial paper market has totally frozen up. The freezing of the CP market has major ramifications. Only the...
Not Only Mazda
- Ford buys shares in Mazda; Ford sells shares in Mazda (yesterday's news).
BMW bought British automaker Rover; BMW sold British automaker Rover.
D...
Looking for the bottom?....Keep looking.
- Why you should own gold. Historically, Gold has been a safe haven in distressed times, during high inflation times, at times when there was distrust o...
"One group of stocks that has always intrigued us are those whose symbols have one letter," notes 
