Green,
Yes, you are guessing and the sell-off so far is nothing to speak of. Wait tell things get serious.
Igy
Green,
Yes, you are guessing and the sell-off so far is nothing to speak of. Wait tell things get serious.
Igy
Could be a long wait. Or not.
POTO,
We have our bet.
Igy
7 months to go. I can taste it already.
POTO,
If we duplicate this week for four weeks we will be at 13,000 by Valentines Day. If we hit it by then I will send you a card instead.
Igy
I'm guessing even you wouldn't bet on that happening.
POTO,
Yes you are right, but I thought it was funny.
Excuse my humor and do have a good weekend.
Igy
Right back at ya, Igy.
Wasn't there someone on this thread claiming that the Fed's actions via QEs didn't have anything to do with the stock market climbing the last 7 years?
Too funny.
GOI, I think we are on the same page. I get what you are saying and its why I emphasized about buying into stocks for the right reason. At the end of the day its all about understanding the risks and what you are getting into. I'm totally with you that in this current market its very dark and dicey overall. Huge global currency fluctuations, huge amounts of stressed debt. Domestically the Fed is set on raising rates while politically nothing will happen as far as providing stimulus until after the elections. Actually my Ford buy was off of a limit order I created weeks ago in which time the price went above $15 for a time. So the buy was based off a real risk i saw that the stock would drop a good 15%. The drop happened pretty quickly, so the order kicked in before I really assessed whether I should cancel. But at the same time, there was no bad news about Ford in recent days. If anything it was good. So I feel good about it for reason stated. Again, those reasons being tax benefits that lower the downward risk, and the real risk that the stock goes up. That is a risk after all.
Ghost of Igloi wrote:
ryan,
Perhaps you misunderstand my comment. There is a mentality that you should step-up and buy market dips. Also, as part of that thought process is that not doing so displays a lack of courage. I am saying that is not always the case and choosing to fight another day may be a wiser choice.
Ford is a conservatively managed company and the stock does have a nice dividend. I would question whether we are at a cycle top in auto sales.
Off hand I believe the cycle low on the stock is around $8.00. So your downside risk is in this range. Dividends were suspended in the last downturn.
Igy
I've looked into that. Its really not that bad from what I can see. The argument being that the automakers are recording sales to dealers which go unsold and accumulate on dealer lots. But with Ford a lot of their profits come from the new F-150 truck and it was shown that turn around inventory time was 15 days which is extremely low. Better arguments for being short Ford is:- consumer debt- Ford failing on its bet on increasing international sales. - Generally not keeping up with technology and having companies like Tesla, Google, Apple making the real profits in carsBut here is the deal. The truth is Ford is a very well managed company. Alan Mulally took over the company sometime around 08' and did a thorough overhaul of the Ford corporate culture. Its a forward thinking and nimble. They are creating value and they are innovating. Contrary to what many think, its not the stodgy old auto company it used to be. Actually one "problem" with Ford is they are not doing massive buybacks as other corporations have done to prop up their stock price. Instead they are reinvesting and making a big push into Europe, India, and China. We'll see how that works. But the bottom line is they are creating value, they have a long term strategy, they are executing that strategy. That's more than you can say for a lot of stocks.
Ghost of Igloi wrote:
ryan,
Auto inventories at dealers:
http://www.zerohedge.com/news/2016-01-08/last-time-automakers-channel-stuffed-much-lehman-and-gm-went-bankruptIgy
Who Said that? wrote:
Wasn't there someone on this thread claiming that the Fed's actions via QEs didn't have anything to do with the stock market climbing the last 7 years?
Nope.
ryan,
I cannot recall the hedge fund or actvist that was pushing GM to buyback stock. As I mentioned Ford is a conservatively managed company. Some of that lies in the fact that a significant portion still is in the hands of the Ford family. Also, during the financial crisis it was the only American manufacturer that did not take a bailout. The technology coming from Tesla is interesting but the stock is a poor investment.
Igy
Ford hitched its cart to the international wagon some time ago.
It did this because there were certain things it felt it could do, but the north american market was too restrictive (which IMO is why domestic vehicles are largely pure crap). So, Ford found somewhere it could execute its strategy.
The good thing is that they are now in many different markets, with different products. That is also the bad thing, they have exposure to foreign currencies and business disruptions, etc.
IMO they have done pretty well managing it all. I don't know that I would ever invest preferentially in any US automaker, but if there was one I would buy, it would be F.
The most "American made" automobile is the Toyota Camry.
Please, no zerohedge. There is no 'there' there. Gold bugs? Sure. Plenty.
My question to the thread followers/posters is that given you all are the last to know anything relevant to a stock, why do you invest directly? Is it a hobby?
My bias is the game is rigged in case it isn't obvious.
Reader of the threads wrote:
Sally V wrote:Nope.
Yes there was.
Link, or STFU.
Nothing has changed? Maybe not for you because you panicked and pulled out of the market, but the rest of us enjoyed a very nice bull market.
Putting my purchase of F aside, I largely agree with this. Or at least I can see a serious meltdown happening. Here is the narrative I see. To get out of the deep recession the country was in the Fed came up with QE and sustained zero percent interest rates to inflate asset prices. Bernanke was actually very blunt and open about it that he wanted to inflate the stock market. And of course it worked. But what happens when the bull market runs its course? On one level I think that is what we are seeing: A perfectly natural bear market after the stock market tripled in value over 6 years. But a healthy bear market could in turn trigger all the bad problems that have been dormant since 08'. Then it could be game, set, and match against a rising stock market. In this era, so much of the money that consumers spend comes from the stock market or asset prices in general. So if the stock market goes down and stays down for awhile, people close their wallets. Then you are locked into a negative downward cycle of contracting economic activity. And for the first time in decades there is no stimulus to be had unless its Raytheon or Lockheed Martin. Interest rates are already at near zero percent, not 5 percent as it was in late 07' so there is apparently no room for stimulus there. Nothing is going to happen from Congress in this election year no matter how bad things get. They will probably raise the debt limit if need be but that is it. Ultimately we could be drifting into deflation. The very thing the Federal Reserve was trying to head off. I don't think a financial crises like 08' will happen because now the Federal Reserve is a lender of last resort to Wall Street banks. What I fear is that we have become Japan. No dramatic crises. Just years and years of deflation and a bear market that we can't get out of.
Real K5 wrote:
What we can be pretty sure of, given what happened in 2008-09 and the fact that nothing has changed since then (where did those toxic assets go?), there will be a massive meltdown of the market in the not too distant future.
ryan,
I agree with your analysis and possible outcome. Unfortunately many are fat and happy unable to see the potential problems ahead.
Igy