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Author Topic: Ford increases Focus production by 30% to meet demand...IT'S STARTING..BOY'S!!!  (Read 82809 times)

Offline fdjake

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That sounds great doesn't it???

But I can tell you from real money and real life experience that THIS is how that actually ends up working.....

You buy the stock intially at $3, then sell it for $4....All is right with the world....So you decide to just repeat this....You buy it back at $3.50 and sell it at $6......But then something goes wrong...
You never get another chance to buy BACK IN at $4 because right after you sold at $6 the stock went to $10!!!

This is the MENTAL part of playing the stock market.....Think about this...You just sold 10,000 shares at $6.00......You have $60,000 in your trading account but NOW...BUYING BACK those same 10,000 shares costs you $100,000 :banghead :banghead :banghead

This is what screws all new traders.....They have the right stock, at the right time, at the right PRICE....Then they BLOW IT by trying to be SMART....NO ONE...with the exception of an absolute PRO TRADER is BUYING that stock BACK at $100,000 when they just OWNED it at $30,000......The mental hurdle is just TOO HIGH. 

See.........If you had just KEPT the stock at $3.00 your total $30,000 investment would then be worth $100,000.  If the stock goes to $20....You now have $200,000. 

Believe me......You are NOT going to trade this stock in and out and NOT have this exact thing happen to you at some point.

How do you think I learned this????
« Last Edit: December 20, 2008, 02:03:51 pm by fdjake »

Offline propertymanager

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FDJake,

I'm not married to Ford or any other stock.  If it doesn't behave as I expect, I'm out and using my money to trade something else.  I trade primarily on technicals and I don't really care what the stock is.

Today is option expiration date for December, which finished my Alcoa trade.  As I posted in real time, I bought Alcoa (AA) on Nov. 20, for $7.35 per share and sold the December $7.50 covered call for $1.04.  That call was exercised today.  So, I made a total pre-tax and pre-commission profit of $1.19 per share on a $7.35 stock in one month.  That was a 16% profit in one month.

Just to put things in context, I'm still underwater on my IAG short.   I sold it short at $5.10 and the stock is currently at $5.50.   The chart still looks good and I'm hanging in with the short so far.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline fdjake

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NONE of those numbers mean a thing unless you put the DOLLAR VALUES on these trades.

I tell people exactly how much I'm playing with here whether it be CONTRACTS or DOLLARS.

These trades you mention mean NOTHING without knowing how much SKIN you have in the game.

If your making 16% on $80K that's one thing.  If your making it on $1000 that's another. 

The DOLLAR AMOUNTS MATTER.  They matter not just for PROFIT or LOSS, but because of the MENTAL FACTOR associated with trading stocks.  Having $5000 in a trade is WORLDS away from having $50,000 in it.

If I was buying Ford stock with an account that totaled $2000 it's meaningless. 

If you don't want to talk about DOLLARS.....AT LEAST put the number of CONTRACTS your buying/selling.  Talking about trades without this info is MEANINGLESS.
« Last Edit: December 20, 2008, 07:10:28 pm by fdjake »

Offline Roger J

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Yep that's me.  In my little play world with play money.

That said, I'll respond again from my non-trader, common-sense standpoint.

If the stock jumped from $6 (your sell point) to $10, then....you don't buy it anymore.  You've made the money you intended to make and you move on, either to another stock or another money-making opportunity.  It's simply a different way of making money, as I see it.

You can play the "if I would have just done this (you can fill in here with your stayed in for the long haul), I would have money a killing" theory with just about anything people have made money off of through the years.

People in CA that sold properties at $500K, that in 2 years or less, were selling for $1M were saying that (at the top of the boom).

IF only I had held on to my comic books, or baseball cards, beanie babies, or any number of things that have had a major jump in price/value in their lifetime.

As an investor, YOU have to determine what your exit strategy, or out point is.  It doesn't matter what could have happened AFTER that point.

Raj
www.HickoryNCHomes.com Search for all Hickory NC Homes for Sale.

Offline fdjake

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Let me know how you feel about that when you've traded out of a stock that went on to move up 20 TIMES what you paid for it!!

Roger.....When your using REAL MONEY to do this the psycology plays a HUGE role. 

As you say......Your NEW to this......You'll learn.....Then you'll understand.

What YOUR talking about ISN'T what you commented on.....YOU COMMENTED on Mike trading IN and OUT of this stock.   If his goal is to sell at $10 and walk away GREAT!!!!  But trying to trade these stocks ends up costing you BIG RETURNS over the longer (say 5 year) term.

WATCH.....You'll learn...

Offline propertymanager

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On the other hand, if the economy really does lose another 4 million jobs next year, the economy will be in a REAL ditch and people will be buying even fewer cars than they are now.  I am still not convinced that the American people will not tire of all the bailouts and DEMAND that failing businesses be allowed to go into bankruptcy.  Ford could easily be forced into Chapter 11 and the stock would become worthless (even though Ford would ultimately survive).  That's the bet on this Ford play, that public opinion won't force the government to allow Ford to go into Chapter 11.  I'm not willing to bet the farm on this issue, although I am certainly willing to trade in and out.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline fdjake

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Good point Mike.  That is the question....

I will say this....

Obama rode into town on a WAVE of UNION Support.  He just put Joe Biden in charge of middle class recovery efforts (whatever that means)
Joe is a BIG TIME Union guy.  I seriously doubt Joe is going anywhere near a bankruptcy that would see those Union Contracts thrown out.

None of us have to agree with these methods.  In reality I think a bankruptcy is exactly what is needed.  I just think that in these economic times it would be a death blow to any car company.  I do believe the Unions,  at the very LEAST, are half the problem.  The other half being the management.

So far this is going exactly according to plan.  Ford is now publically acknowledged as the STRONGEST AMERICAN car company.  They are getting loans from all over the world, they still have VOLVO which is worth an estimated $6 billion, and now the Obama administration is coming into office.   The best part of all.......Whatever gets forced down GM's throat in the way of UAW wage cuts will benefit Ford too.  The UAW will be in no position to require Ford to pay a higher wage while accepting a lower wage from a weaker company.

In the end your absolutley right Mike.......There's still a lot of unknown out there.

In my way of thinking.....If we do get 4,000,000 jobs losses next year...
Any FURTHER loses (like losing a CAR company) will be completely unacceptable as this country spends an estimated $800 BILLION on Obamas plan to CREATE NEW JOBS.
At that point it becomes CHEAPER to KEEP the jobs you already have than trying to make NEW ones!!

I see the weakening economy actually making all those EXSISTING automobile jobs more IMPORTANT.   

Offline phlemboy

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I know this may sound a little weird, but what about buying Ford stock for both the long and short term? The stock may move enough daily to make a decent return. You could have a few speculative stocks that you trade frequently. But you could also have some long term plays as well. For the past week, I've watched Jim Cramer's "Mad Money". Many of the stocks he labels a "buy" tend to jump about 10% the following day. Some move more than others. I can see a scenerio where you could buy at the opening and sell later in the day. It doesn't matter to me if he's right or wrong. What matters is he apparantly has a following that listens to him blindly. I think its possible to take advantage of a "herd" that is too lazy to do their homework. I'm going to wach this to see if its a trend worth using. When it comes to the job losses, I think that only extends the possibility to add to a Ford position. I like the fact that Ford already started to downsize and do the right things a few years ago. They only need to have enough resources to stay out of bankrupty (which I think they do). They also won't be have to answer to or comply with the govt. in regards to how they do business. If they don't have restrictions, they could position themselves to increase their potential market share when the economy improves. I've noticed the media keeps using the term Big 3 when referring to this bailout. I hope they doing that. It just adds to the perception Ford is toast along with GM & Chrysler.
"Fat drunk and stupid is no way to go through life son." --Dean Wermer

Offline Roger J

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Because I'm not playing with "real" money in the stock market, my point doesn't count?  That's quaint.

I have, however, played with "real" money in real estate, in comic books and baseballs, to name a few, and in every one of those, I've sold something that has ultimately doubled, tripled, or just plain hit the sky in value jumps compared to what I sold it for.  It happens every single day when dealing with things that go up and down in value based on other people's desire for them.  You can play the "hold it until.." game, but what is that "until?"  You can also whine about it with the "only if I would have waited a bit more."  ARE you can work it based on the criteria that you put in place, and be happy that you made what you wanted.

Of course, there is the other side of that as well.  You know, holding it waiting on that big pay day down the road.  I wonder how all those people left holding real estate in CA, Las Vegas, Florida feel about that play now.

Sometimes, I do have a hard time following you, Jake.  In another post, you praise PM for following a different investing path that works for him (short term plays) and in this one you beating it down.

Raj
www.HickoryNCHomes.com Search for all Hickory NC Homes for Sale.

Offline fdjake

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Mike just told all of us that he's playing with a few thousand dollars at a time.  For that amount of money, he's doing things that work for him.
I still think he'd be better off in the long run just buying ford and holding it for 3 to 5 years.  But he's naking money and that's all that matters.

As for YOU....

If your not playing with REAL MONEY....

YOU HAVE NO OPINION!!!     

At least not one that I'm going to play any attention to.

Roger, 

When you get some skin in the game.....IT'S A NEW GAME!!
Real Estate and Stocks are different animals.....

I must say that I temper anything you talk about here because of what I call the REALTOR MENTALITY.   Your a salesman....You get PAID to be optomistic.  The proof is right in this post.....You CONTINUE to blame the MEDIA for a crisis that is excellerating everyday and has roots that extend to the very foundation of our economy. 

IT'S NOT THE MEDIA ROGER.........IT'S THE ECONOMY!!!!!

Offline Roger J

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In a nutshell...WOW.

First, as usual, you try to tilt everything in your direction, regardless of the intent of the original poster.  You blame my position (one the you created for me, btw) on the fact that I'm a REALTOR.  Although we've had this discussion before, apparently it bears repeating.  I was an investor long before I ever had to get me RE license, so my mindset is completely different than the "average" REALTOR.  Nuff said.

Second, I have NEVER blamed the media for this crisis.  I have, however, blamed the media for pushing this crisis, as well as a multitude of others further and faster than it probably should have or would have, on it's own.  In fact, when it suits you, you have tended to agree.

Third, because I don't play with "real" money in YOUR stock market, I am no longer allowed to post my thoughts and opinions on a public forum?  I guess since this forum as switched from a real estate forum to your stock trading advice and I don't play with enough money in stocks to qualify, I'm only allowed to lurk in the background and keep my mouth shut, is that the basic outline there, Jake?

It amazes me that if my opinion isn't something that you're going to pay attention to why it ALWAYS warrants a response from you.

Unlike you, I do have respect for your opinion, whatever the context.  That said, I rarely feel the need to bash my opinion into the heads of others that disagree with it nor do I feel the need to slam others with wise-cracks or putdowns that have opinions that differ from my own.

It's funny how YOU can say, Mike's doing it his way and it's cool, but I'm not allowed to do that without you badmouthing me for it.

It's cool, however.  I get the point.  I'll simply take my marbles and play elsewhere.

Raj
www.HickoryNCHomes.com Search for all Hickory NC Homes for Sale.

Offline propertymanager

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GM and Ford stocks are rapidly declining this morning on news that Credit Suisse said that equity may be wiped out under the terms of the bailout program.  As I have said, in my experience, stocks that are near bankruptcy trade almost exclusively on news (and rumors).  Obviously, Ford isn't participating in the current bailout, but as you see - that doesn't matter.  They're still being punished on this news because they are on the same track, just a little behind GM and Chrysler.

That's why I sold my Ford stock at $3.49 (500 shares, making about $935 profit) and why I will buy again when it gets lower.  I currently have an order to buy 500 shares at $1.25, but would buy higher if the call option premiums improve (which they may if the volatility improves in Ford stock).

I'm just not a risk taker like FDJake.  In both my real estate business and my trading hobby, I want as close to a sure thing as I can get and I want my profits NOW, not 3-5 years from now.  The down side of doing things the way I do them, is that I'm giving up the big upside potential.  However, to actually get that big upside potential, you must not only buy and hold the property, but you must sell it at the right time.  People that bought dot-com companies in the 90's had a huge paper profit right up until the crash!  Likewise, many stock market participants had huge paper profits using a buy and hold strategy during the 2000's, right up to the crash!  Now that they've lost nearly 50% of their portfolio, it will take a 100% move up to get them back to the previous high.  OUCH!

Roger - keep posting!  I don't care how much money you trade with or if you don't trade at all, I would still appreciate your opinion (and everyone else's opinion)!  This would be a boring forum without a lot of different opinions.

Here's the article.

http://www.reuters.com/article/businessNews/idUSTRE4BL2AG20081222?feedType=RSS&feedName=businessNews

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline phlemboy

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I find it hard to believe that Ford will be punished the same way as the others. I think there's enough smart investors to remain in Ford's stock... I hope... :cool
"Fat drunk and stupid is no way to go through life son." --Dean Wermer

Offline propertymanager

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Quote
I find it hard to believe that Ford will be punished the same way as the others.


Don't look now, but Ford was down more than 15% today (to $2.19), in addition to yesterday's double digit loss.  What's to keep it up at this point?  The economy continues to nosedive; jobs continue to be lost; no-one in their right mind is going to be buying cars; housing prices continue to plunge; foreclosures continue to increase; and business will be bad for the foreseeable future.  You'll see a One handle on that Ford stock in the immediate future (maybe tomorrow) and it could easily end up below $1.

I don't see another big up move until Obama takes office.  We've got some time to find the next bottom in Ford stock.

Mike

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline phlemboy

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I think that if enough smart investors look into Ford's balance sheet, they'll see that (at least for the next year or so) Ford should be able to hang on without any bailout money. But the question is, can they survive if GM or Chrysler goes under? How much money will they need to adapt to the different scenerios that would create? If they can hang on, wouldn't they stand to
increase their market share with GM out of the way? Here's my stategy. I'll buy when it hits under $2. Then I'll call Jim Cramer and ask him to "send some love" to the Ford stock  :beer
"Fat drunk and stupid is no way to go through life son." --Dean Wermer

 




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