Having said all the above, keep an eye on Ford. If she spikes below $6 per share short term, buy with a limit order (sale price at $9 high, $4.90 low). If you're really nervous, set the limit order tighter ($8 high and $5.50 low, for instance). This strategy limits your downside. An example would be:
Invest $12,000 in Ford stock at $6 per share (2,000 shares). Simultaneously set a limit order to trigger at $9 high, $5 low.
If the stock drops in value to $5/share, you sell for $10,000 and take a $2000 capital loss (deductible on your taxes - typical after tax loss of $1400 for most folks). If the stock hits your target, you sell for $18,000 and have a $8,000 profit. Hence, you've set up a "bet" on the market with the odds favoring you with a small downside risk and an upside 4 times the downside (actually, taxes can change this picture, but still, appx. correct).
If you monitor the market constantly and have good discipline, this strategy can net you good returns (assuming you choose good companies at the right time, of course). "Timing" the market can be tricky, and in general is an activity best left to experts. This is hoary wisdom, and certainly well advised - but not what I do. My belief is that modern markets are swayed by political events (911 took quite a bite out of Wall Street - I bought big 2 weeks after 911 (I was sitting on a mountain of cash in our 401k's - I cashed in everything in late 1999 before the dot com bust), and sold off over the next year for very handsome profits - did the same thing on a lesser scale with the Iraq campaign). Buy on bad political news, then sell after the hysterics calm down and start investing in their 401k's again. Never follow the herd. When the whole world says buy, sell. When everyone else is panicked, buy.
I see this scenario playing out on a small scale with Ford - sometime soon. Media attention on layoffs will coincide with energy cost trauma during the winter to pummell Ford's stock value. The fact that the current spate of cost cut announcements and fire-sale pricing to reduce inventories has NOT succeeded in buoying their stock prices (as you've noticed, they're quite low) leads me to believe that stockholders will certainly unload when the true bad news hits the airwaves. Since this will also coincide with the financial fallout from the deep discount sales and the resulting depressed sales market (people really need only so many new cars in their driveway), and keeping in mind that the current investment climate is rather given to over-reaction to even the smallest bit of bad news, well... Ford stock could get cheap, real cheap, in a hurry. I might even buy at $7 - this is one of those decisions that require fresh data. Bears watching.
Hope this helps. If you do buy stocks, bone up on the idea of placing limit orders. They cost higher fees (you don't want to do this with tiny orders - and tiny orders usually aren't worth making because of the overhead and fees), but give you far better control over the risks.
tripleblack
Quote:
Originally Posted by zregime
I know the wife will be happy to hear that...she is dubious about entering the market for the first time (we've got a 401k, of course, but this is a different gig...all eggs in one basket, so to speak)...it's still hard for me to fathom how a major company, longtime Dow stalwart, etc. can go that low. But you have certainly given me cause for pause. Let's see what happens in the next month or so. Thanks for taking your c-ball out on a limb...
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tripleblack
"You can never be free until you let yourself go."
Good points and good info, Triple B...many thanks.
Reminds me of that story from the book "Liar's Poker" by Michael Lewis, where the author calls up his most trusted trader friend right after the news on Chernobyl broke and the trader said "Buy potatoes." Which makes no sense until you start connecting the dots of radiation fears and the effects on agriculture in the surrounding area -- real or not, doesn't make a difference; the PERCEPTION is what matters -- and how much Russians rely on potatoes...and then Lewis of course made a killing following that advice. It's the old "contrarian" approach...
But thanks again...
__________________
"I may never be famous, but my girls Dixi and Luci sure are."
Dixi Candace: Windveil Blue Stick V6 '05, Steeda CAI w/BBK 70mmTB/hi-flo inlet, XCal2, ASP UP, JBA SS Shorties/Evol, FRPP T-Lok diff, 34/28 mm F/R sway bars, MMR rear LCAs, Monte C. strut bar, Precision 3.73s, Snow H2OCH4O, "Q" grille and tons of Dixi Bling chrome
Exactly. The key is picking when to respond to bad news - and when to respond to good news (I'm not always a Contrarian - I can ride long term trends as well as anyone - waiting, of course, for political news that will trigger my reversion to my trading philosphy outlined above).
In this case, my key ally is the bias of the new media. Their role (which has come more and more to serve as an amplifier for people's fears, rather than an even-handed reporter of facts) is key to this prediction. If they focus, for example, on the fact that today's V8's get better mileage than yesturday's v6's, while meeting more stringent emissions and quality standards, the story could be made less of a stampede - and my stock price prediction might well be wrong. This would require that the sound bites be analytical rather than apocalyptic, and the tone to be upbeat rather than downbeat. Given that more than 80% of the media players voted for Democrats in the last two elections, and lost, and are still fighting the lost battles emotionally (if not intellectually), finding the will to resist casting any bad economic news as a result of political shifts rather than analyzing the facts of the situation will siimply not happen.
I'm counting on them AND Ford's management to make the gloomy near future arrive. Of course, being a Libertarian, I'm USED to voting for the losers!
tripleblack
Quote:
Originally Posted by zregime
Good points and good info, Triple B...many thanks.
Reminds me of that story from the book "Liar's Poker" by Michael Lewis, where the author calls up his most trusted trader friend right after the news on Chernobyl broke and the trader said "Buy potatoes." Which makes no sense until you start connecting the dots of radiation fears and the effects on agriculture in the surrounding area -- real or not, doesn't make a difference; the PERCEPTION is what matters -- and how much Russians rely on potatoes...and then Lewis of course made a killing following that advice. It's the old "contrarian" approach...
But thanks again...
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tripleblack
"You can never be free until you let yourself go."
Don't get me wrong - I believe a person can certainly make money buying (and soon afterward, selling) Ford stock - been there, done that, cashed the dividend check.
But I'd wait to buy the stock until the real feces hits the propeller - wait until CNN/Fox/NBCetc show tens of thousands of Ford employees hitting the unemployment lines - then the obligatory shots through the chain link fence of the closed down or soon-to-be-closed-down factories (since this is going to happen 4 or 5 times in the next year or so, a fairly constant barrage of this type of press coverage will persist for the near future). Somewhere in the middle of this mess it will occur to someone that the one company most dependent on the sale of large vehicles with big motors is Ford - by a considerable margin most dependent. And with oil trending upwards this week to about $68 per barrell (I say trending - more optimistic folks are saying "spiking", implying oil is near some upper limit, which it is not), $3.50 for a gallon of gas is one production cycle at the refineries away.
Coyote wants to buy Ford stock so he can benefit from the publicly funded bailout he believes is iminent. My point to him (and to you) is that the time is not yet ripe to buy that Ford stock. Right now the American manufacturers are buoyed on an orgy of cost-cutting, which is about to run its course. Huge volumes of American-made cars have been dumped into the market, and a temporary market-share bubble has been achieved.
But it will soon become apparent that the companies have paid dearly for every percentage point. Anybody can sell something for no profit - its making and selling a product for a healthy profit that's difficult.
Wait to buy their stock until the big rush of negative press hits, and the inevitable piper is paid for the current orgasmic discounts.
You'll get the stock really cheap then - cheaper than now.
Whether it will recover later will rely on that same management team we've been discussing.
(By the way, the Mustang at less than 200,000 units sold in its first year is less than 5% of the gross sales of Ford - F150 trucks alone sell over 900,000 units, at much larger gross prices and gross profits. Ranger trucks and Explorers sell approximately the same volumes as Mustangs, again with better profit margins. If truck and SUV sales fall (which they are showing signs of doing, the current rebate/employee discount bubble notwithstanding), Ford could sell twice as many mustangs as they did this year and still lose a mountain of money.)
Don't get me wrong - I'm posting all this in hopes that Ford will return to her roots (as she did with the 05 Mustang) and shape up!
tripleblack
Which is why I think they should keep the ranger around. it's the only REAL truck that gets 30 MPG. And right now with everyone going mid-sized, it's the ONLY compact truck in the N. American Market.
They need a mid sizer, but keeping the Ranger as is, with little investment, is an ace in the hole. It can already be configured to run FFV, and I've seen some running on Natural Gas on farms.
Fords car lines need help, so does Mercury.
THe problem isn't volume, it's attractive product. Focus is ok, but getting long in tooth, the rest are crap.
If they made a car that people would buy . ..
All stock purchases are a gamble. wait too long, you lose, get impatient, you lose.
People said the same thing about Chrysler when I was in college, and I told my roommates dad to buy, and he make tens of thousands in a couple of years.
Ford's now junk bond from 2 agencies. I don't think it'll go much lower . .. but I could be wrong. Heck, as low as the stocks are, you won't lose much regardless .. .
__________________
Woe to him who builds his palace by unrighteousness,his upper rooms by injustice,making his countrymen work for nothing...Does it make you a king to have more and more cedar?Did not your father have food and drink?He did what was right and just,so all went well with him. He defended the cause of the poor and needy,and so all went well...But your eyes and your heart are set only on dishonest gain,on shedding innocent blood and on oppression and extortion. Jer 22:13, 15-17
Yo Triple B: Saw this article earlier today and thought I would post you the link. I haven't read much on The Motley Fool, have heard both good things and bad about the advice from the site...but it's an interesting piece, to say the least. Enjoy...
"I may never be famous, but my girls Dixi and Luci sure are."
Dixi Candace: Windveil Blue Stick V6 '05, Steeda CAI w/BBK 70mmTB/hi-flo inlet, XCal2, ASP UP, JBA SS Shorties/Evol, FRPP T-Lok diff, 34/28 mm F/R sway bars, MMR rear LCAs, Monte C. strut bar, Precision 3.73s, Snow H2OCH4O, "Q" grille and tons of Dixi Bling chrome
I get their newsletters all the time. The article is just a little deceptive, in that the numbers only work if you track from the very low point at which he begins his example (annual return is 20+% for P&G IF you track from the low, not the $118 high). Analogy works if you're a "buy and hold" operator who happend to buy at the low (but then, you wouldn't be a "buy and hold" guy, because you were market timing and hit it perfect.
Just checked P&G. Currently trading at $55. 5 year chart (adjusted for splits, looks like) puts them at $30 5 years ago. Solid performance.
Go back a few more months, and it was at $50 again. Very mediocre performance. My own investments over the same period did far better (but then, I avoided the dot-come trough and made hay on bad news with the 911 attacks and the panic prior to the Iraq campaign). I spent the majority of the 5 years in cash, bonds and various annuities.
His "limit" strategy (not mentioned - I'm giving him the benefit of the doubt) was too greedy on the upside, or too loose on the downside.
Most investments even out over the long term. I say "most", because there are other folks who did the same thing he did, without the sanguine results. They had most of their eggs in one basket, too - and the basket was a company like Enron or WorldCom. Holding those stocks just took you into the ground, no "return to value" for long term investors.
Sorry, I still say the paradigm of investing has shifted from the realm of the chart analystists and company-specific experts to a free-for-all atmosphere driven by major geo-political events, thinly veiled major media agendas, and emotional tsunamis.
tripleblack
Quote:
Originally Posted by zregime
Yo Triple B: Saw this article earlier today and thought I would post you the link. I haven't read much on The Motley Fool, have heard both good things and bad about the advice from the site...but it's an interesting piece, to say the least. Enjoy...
man I just stumbled onto this thread- the first post deserves an award.
I hope you work for Ford, and I hope you climb the ladder real quick. In my little mind Ive been hoping and praying ford would stretch the mustang a few inches for 4"more rear legroom and put 69 cougar-ish skin on it, and Ive mentioned that I think Ford should put Chip Foose in charge of styling often enough that people probably think he's paying me to plug his talents
agree 100% with everything else youve brought up, lots of things I would never ever have known or thought about- too bad your name isnt Bill Ford.
ps- I still think a 56 f100 on the ranger chassis would be a big seller for a dying platform(might be revived due to fuel costs as-is?) and be a 'honest' non ptcruiser model to put a paneltruck 5 seater a year later without people crying copycat...whats your thoughts on this?
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Our Blue Fords:
2007 V6 Vista Blue/Auto/Coupe/Pony (Wife's car)
2006 GT Vista Blue/Stick/Coupe (Mine)
1969 Fastback Acapulco Blue (in pieces since '84)
1965 Galaxie 500 LTD Caspian Blue/White
No, I've never been on the Ford payroll - I'm just another long-winded enthusiast car guy.
Actually, I remember the first time I saw a picture of the PT Cruiser. I thought it a grand idea - until I saw that it was more of a 3/4 scale styling exercise, rather than a full-size truck. Nothing wrong with a mini-panel truck, and Chevy now has their own hideous example, the HHR - but the timing was right for a big one.
The Mustang platform has sufficient overhang (front and rear) to carve out more foot room should Ford revisit the new design. Its also very feasible to reshape the structure of the front seats for more knee and foot room in the back seat. My opinion: A very common sense suggestion that will not happen. The current ideological blinders being issued to the Ford design-apparatchiks will keep them focused tightly on the goals set by their corporate leaders - this was the whole purpose of the recently completed corporate coup that unseated so many Ford stalwarts and made SVT a meek servant rather than the strident dynamo it once was...
I totally agree about the old Ranger/F-100 idea - and its potential application as a panel truck or large scale cruiser. We can only hope that somebody at Ford has mislaid their blinders today and see the light...
tripleblack
Quote:
Originally Posted by ford4v429
tripleblack-
man I just stumbled onto this thread- the first post deserves an award.
I hope you work for Ford, and I hope you climb the ladder real quick. In my little mind Ive been hoping and praying ford would stretch the mustang a few inches for 4"more rear legroom and put 69 cougar-ish skin on it, and Ive mentioned that I think Ford should put Chip Foose in charge of styling often enough that people probably think he's paying me to plug his talents
agree 100% with everything else youve brought up, lots of things I would never ever have known or thought about- too bad your name isnt Bill Ford.
ps- I still think a 56 f100 on the ranger chassis would be a big seller for a dying platform(might be revived due to fuel costs as-is?) and be a 'honest' non ptcruiser model to put a paneltruck 5 seater a year later without people crying copycat...whats your thoughts on this?
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tripleblack
"You can never be free until you let yourself go."
Part of this thread predated the hurricane onslought, so perhaps those predictions about $3.50 gasoline and $8 stock price for Ford were helped along by Mommy Nature, but...
Citigroup last week downgraded their listing for Ford from Hold to Sell, projecting a near-term stock price of $7, and siting all the same reasons I sited here months ago. Ford's current stock price is at a yearly low of $8.63.
I reiterate my buy/sell strategy (now emulated by Citigroup - hey, are they reading our thread?) - $7 if you feel more upbeat about their chances than I do, and $6 short term limit buy if you don't. I still think they will show signs oflife next spring - but unless they make a lot of changes to their offerings, I wouldn't sit on the stock very long.
tripleblack
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tripleblack
"You can never be free until you let yourself go."
All these motors are already in production and readily available. The list factory options should also be expanded to include more choices of brakes, wheels, tires, shocks, interiors, etc. The entire concept of AAI was to be able to respond to multiple options - and profit from them.
tripleblack
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tripleblack
"You can never be free until you let yourself go."
All these motors are already in production and readily available. The list factory options should also be expanded to include more choices of brakes, wheels, tires, shocks, interiors, etc. The entire concept of AAI was to be able to respond to multiple options - and profit from them.
tripleblack
In 2007, the 4.0L V6 goes to the 260 hp 3.5L V6. The 4.6L 2V V8 becomes irrelevant.
__________________
Woe to him who builds his palace by unrighteousness,his upper rooms by injustice,making his countrymen work for nothing...Does it make you a king to have more and more cedar?Did not your father have food and drink?He did what was right and just,so all went well with him. He defended the cause of the poor and needy,and so all went well...But your eyes and your heart are set only on dishonest gain,on shedding innocent blood and on oppression and extortion. Jer 22:13, 15-17
Moving the all-aluminum 3.5 (235hp) motor into the mustang would be a cool idea, though I can find no mention of this plan. The new motor production from Lima is slated for use by Lincolns and Ford sedans, but not listed by the sources I consulted as intended for the Mustang. The price point for the base Mustangs is pretty cheap - and this is (at least at current efficiency levels) a bit pricey. However, Ford has a long history of tapping Japanese motorcycle companies (Yamaha this time) to make/engineer high output V6 (and occassional V8) engines. Sourced originally in a deal between Volvo and Yamaha, it looks to be the key to keeping the Lima engine plant running - so there may be political reasons to enhance their survivability as a factory as well. Adding on the Mustang production would probably result in another shift, and higher overall efficiencies of scale. (It would also affect whatever plants are making the current V6's, of course, but that's inevitable with any change).
From what I could quickly learn, production costs on the V6 motor are a bit higher than the cast iron 4.6, and the 30hp difference would be sufficient for marketing purposes (note the 265 number I've cited for the proposed rebirth of the 4.6 - the new Mustang's layout would benefit the motor in terms of cooling and air flow, so I'm projecting a modest 5 hp increase from the 'freshening' of the existing motor).
Good idea to update the V6 - I just suspect Ford has other plans for the 3.5 for the next few years.
tripleblack
Quote:
Originally Posted by kscoyote
In 2007, the 4.0L V6 goes to the 260 hp 3.5L V6. The 4.6L 2V V8 becomes irrelevant.
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tripleblack
"You can never be free until you let yourself go."
Moving the all-aluminum 3.5 (235hp) motor into the mustang would be a cool idea, though I can find no mention of this plan. The new motor production from Lima is slated for use by Lincolns and Ford sedans, but not listed by the sources I consulted as intended for the Mustang. The price point for the base Mustangs is pretty cheap - and this is (at least at current efficiency levels) a bit pricey. However, Ford has a long history of tapping Japanese motorcycle companies (Yamaha this time) to make/engineer high output V6 (and occassional V8) engines. Sourced originally in a deal between Volvo and Yamaha, it looks to be the key to keeping the Lima engine plant running - so there may be political reasons to enhance their survivability as a factory as well. Adding on the Mustang production would probably result in another shift, and higher overall efficiencies of scale. (It would also affect whatever plants are making the current V6's, of course, but that's inevitable with any change).
From what I could quickly learn, production costs on the V6 motor are a bit higher than the cast iron 4.6, and the 30hp difference would be sufficient for marketing purposes (note the 265 number I've cited for the proposed rebirth of the 4.6 - the new Mustang's layout would benefit the motor in terms of cooling and air flow, so I'm projecting a modest 5 hp increase from the 'freshening' of the existing motor).
Good idea to update the V6 - I just suspect Ford has other plans for the 3.5 for the next few years.
tripleblack
It was discussed during the rollout of the Mustang when showing the concept car
Original plans were for regular 250 hp with a 260 hp version for Mustang owing to improved exhaust, breathing, and fewer accessories.
When it was clear the engine wouldn't be ready for the rollout, the Mustang got the 4.0L cologne engine.
__________________
Woe to him who builds his palace by unrighteousness,his upper rooms by injustice,making his countrymen work for nothing...Does it make you a king to have more and more cedar?Did not your father have food and drink?He did what was right and just,so all went well with him. He defended the cause of the poor and needy,and so all went well...But your eyes and your heart are set only on dishonest gain,on shedding innocent blood and on oppression and extortion. Jer 22:13, 15-17
OK, I remember this motor - it would be a barn-stormer if the 300hp version could be produced! The article predicted the largest version actually made would be the 250hp version.
The data I found regarding the Lima plant referred only to the low output version entering production (235hp). The british site you reference does indeed list the Mustang under potential recipients for the motor, but the link just sends you to a "history of Mustangs" writeup that, while interesting and probably needful for the european reader, did not get into any further information about the 3.5 (though it did list the coming GT500).
I suspect that Ford powers have exerted their wishes that the new V6 not exceed 235hp for the American market. In their infinite wisdom, they have doubtless noticed that it would be hard to sell a 300hp V8 if you could get the same car with a 300hp V6 that was much lighter and faster. In a 235hp version, the marketing headroom for the V8 is retained, and the motor mates up with the design limits of the all-inclusive CFT Ford 500 sedan platform, which is soon to absorb all full and mid-size Fords, Lincolns, Mercuries and God knows what else.
I'm not married to the idea of a V8, though - give me a cheaper, lighter car with the same performance, styling and features, and I'll give that V6 a whirl... 300hp all aluminum motor in a new Mustang, with lighter, quicker steering and suspension - yeah, sounds good to me.
Perhaps I'm just being cynical - maybe there are actual scientific reasons why motor designs cross the ocean and become 30% weaker - nah. Its Ford management again, designing what they want to sell, not what we want to buy.
tripleblack
Quote:
Originally Posted by kscoyote
It was discussed during the rollout of the Mustang when showing the concept car
Take your shot 
