Fast forward +90 days…
http://www.whitehouse.gov/news/releases/2005/01/images/20050120-1_1-p44291-172-515h.jpg
To use an fdjake analogy…you’re at a Ford dealership…the saleman turns to you:
“Here’s the keys”
-Mike
OK, here is the Real Question?
When do you see the Stock Market
ever hitting 14,0000 again? :banghead
Who cares when it hits 14,000???
You can make a KILLING on the down side potential here.
Rookie (as usual) is right on the money. This market is NOT acting right.
With the TRILLIONS of dollars that have been thrown at it, all it can manage is a yesterday’s rally followed by todays loss?? Bush AND Paulson go on TV to tell everyone how much their helping, and what do we get??? The Dow is DOWN.
This is NOT going to end well… Yesterday was a DEAD CAT BOUNCE.
In case you’ve never heard the term…Evevn a dead cat WILL bounce if it’s dropped from a high enough building.
Stupid question, but how do you make money on the downside?
Stupid question, but how do you make money on the downside?
Sell short, buy puts, various bear spreads, etc.
Mike
When did ford go down to 1.80 ?? i bought some and traded it from 1.95- 2.00 range
Typo on my part…should have read …$1.98
what stocks would you guys hold or are holding for long term (few yrs) ??
here’s some of mine
DRYS
AIG
F
FNM
FRE
LEHMQ … penny stock now what the heck
the upside to these are tremendous.
Take a good long look at COOPER TIRE. (CTB)
They actually MADE $315 million last year. The stock is currently at $6-$7/ share. Last year it was $23. Their earnings are going to look like sh*t when they release them in early November…But here’s the back story…
Cooper Tire got KILLED this year because just last JULY (not even 4 months ago) OIL WAS $147/ BARREL!!!
There’s more…The 3 biggest ingredients in a Tire are… RAW RUBBER, OIL, and STEEL. Anyone here checked prices on these commodities lately???
THEY HAVE FALLEN THROUGH THE FLOOR!!!
BUT…The price COOPER TIRE gets for their products HASN’T!!! I haven’t seen prices on tires dropping by 50% have you??? So there it is…a company that just saw it’s raw material costs get cut in half, yet it’s product prices stayed the same!!!
Add to this a DEEP recession, and people KEEPING their cars, (we KNOW this is happening by watching new car sales numbers fall of a cliff)
Well folks, when you decide to KEEP that old car, it WILL eventually NEED TIRES…In a DEEP recession, are you buying MICHELINS at $150 each or COOPERS at $75 each???
Doubt the logic???
Take a look at what happened to Cooper Tires stock during the last recession in 1989- 1993. :beer
BACK UP THE TRUCK!!!
I’ve been trying to buy Ford stock per fdjake’s recommendation and couldn’t get it done. I signed up with Scottrade and jumped through their hoops. Contacted their office. They said I didn’t have enough investing experience to purchase 2010 January call options. I contacted a financial advisor and he said the same thing. He also said my net worth was not high enough to make this kind of investment. So…Ford’s been passing me by.
Is that correct? Do you have to have a certain investing level of experience and a certain net worth to make these kinds of investments?
Brian
Brian good question. If this is correct, how can someone that’s new to stock investing buy ford?
You guy’s are all missing the point of these posts…
Listen…If your trying to open a Options Account with $1000 FORGET IT!!
It takes money to make money…That may sound cold, but it’s the truth.
The point your missing here is by just WATCHING these events unfold you ARE LEARNING. Your not going to turn $1000 into $100,000 so forget that.
Save your money…buy some Ford stcok at these levels, but be aware, our economy is mortally wounded here. I would not be surprised to see Ford drop BELOW $1.00/share. I’m not counting on it, but I am READY for it.
Brian,
The best thing for you to do right now is to WATCH how stock price movements effect OPTION prices, LEARN, LEARN, LEARN. While your WATCHING, why not open a Scottrade account and buy some stock. You’ll learn a TON and get that experience they SAY you need. Getting approval to trade options is NOT hard. What IS hard is KNOWING enough about WHAT YOUR DOING so you don’t get KILLED in your first few months.
I hate to say it, but I have a bad feeling about all this. What in the world was the fed thinking to buy stocks in these banks? Frankly, I think the avg American is going to feel bamboozled by the ‘bailout bait and switch’ … Rescue the banks on your retirement package, sweat, and life’s work.
People are like sheep. But once they realize something is amiss - albeit more like someone passing a secret down a line of ppl - they will express their resentments and regrets.
I may not be well versed in Economics, but there’s something in the air. I can feel it. I can’t put my finger on it. Maybe, and god, I hope not, maybe there will be a war. Or some other attack. Maybe someone is manipulating the markets/powers that be… I can cripple your economy like (snap) that.
Or the power of suggestion…“the U.S. caused this recession” to what end? global currency? Why not go back on the gold standard?
If we’re lucky we’ll come out of this with “only” a 2nd depression.
jake excellent post on cooper tires. I just bought some cooper tires the other day actually.
the raw materials to make them are already cut in half almost and will get lower. people cant cut back spending by not buying tires, they want to drive they better have tires lol. bottom line they will make a bigger profit.
today down 733 pts
tomorrow i hope we open the day down …beep beeep beeep back up the truck again the re-test is over. I held off buying the close today, hope im right and tomorrow i can get back in.
these markets are like a rodeo ride. just make sure to get off the bull at times
DO NOT USE WHAT IM SAYING AS ADVICE TO BUY
I did some buying in the last hour today…And yes I had to buy 2 different times to offset the can of a$$ whooping I took on my entries…I bought QLD…SSO…DDM…EEM…C…MSFT…URE…UYG…USD… I didn’t buy massive size I used about %15 of my cash holdings…I think today was overdone but I could be wrong…This IMHO is the arb guys yanking this market around to fill orders…Alot of people missed that huge up day…Todays selling was excessive but as we all know cheap can get cheaper…Let’s see where tomorrow takes us…
Is that correct? Do you have to have a certain investing level of experience and a certain net worth to make these kinds of investments?
Yes, you do need to have a certain amount of experience, networth, and/or income to invest in different types of investments. Even when you are allowed to trade options, the brokerage may still limit what type of options you can trade. For example, they may allow you to write covered calls but not sell naked puts.
Regardless of what the brokerage will allow you to do, trading options is VERY RISKY. Call options have time risk and as you move closer to the expiration date, they lose time premium. Unless the price does what you expect, they expire worthless and you’re money is gone!
If you’re interested in the options market, I would suggest doing a LOT of studying. The CBOE website has a free options course you can take (or at least they used to). You may be able to start trading options with covered calls, which is a strategy that I like.
I bought some Ford stock the other day and then sold a covered call on it. I paid $2.10 per share for the stock and then got paid $.54 per share to give someone the right to buy my stock by Nov. 22 for $3.00 per share. If they don’t exercise their option, I keep the stock and their money, which gets me in the stock for $1.56 per share. That’s a covered call.
Everything is risky and I still think Ford is risky. The big question is whether the government will allow them to declare bankruptcy.
Mike
PropertyManager…
Just would like to get your opinion on something. You had spoken earlier in this post about inflation and how the dollar is going to lose it’s value because the gov. is going to print more money.
I’ve been watching and learning (i’m still learning when it comes to the stock market) about the cooralation between the dollar and gold/silver. I do realize that their are other factors involved…ie the euro…yen…etc…but…
Wouldn’t you think, long term, that buying gold and silver on dips would be a good idea to shield your money against the falling dollar?
I would just like to hear some different opinions on this. Thanks guys.
P.S.
fdjake…I loved to hear your take on Cooper Tires and the reasoning behind it. Just learning from points of view like that is great.
Darin
1-) I bought 12k worth of F options about a month ago, I did it through my investing adviser. When I told him to place the order to buy when they were below one dollar, he gave me all kind of warnings and sent me a ton of papers to read and forms to sign. I understand the risk perfectly.
I intent to hold then as Fdjack suggests. (thank you for all the wise advise- we do listen)
2-) I have a good number of shares of Verizon-VZ, .Should I wait until they gain a little and sell (at a tremendous lost) or should I keep them?
Any suggestions or comments will be appreciated.
3-) I know this is the worst time to start buying and selling on my own, but I thinks it is also a very excited time to start. I plan to use only 10k and buy small amounts of one specific stock to test my instincts. I have lost so much already that 10k more does not matter, at least I will have some control and I will be making the decisions
Is Scottrade the best place to start?
I learned a lot in his forum and still learning. I thank you all for sharing your knowledge
CC
Wouldn't you think, long term, that buying gold and silver on dips would be a good idea to shield your money against the falling dollar?
Yes, I think gold will be just about the best thing to own if we truly see a complete collapse of the economy. The problem is that with gold you’re betting that the government won’t be able to keep the ball in the air. The government is throwing everything they have at this problem and they MIGHT be able to push the ball up one more time before it falls to the ground.
Having said that, the vast majority of my money is invested in rental properties. I have a lot more confidence in the rental property business than I do in betting on the timing of the stock market/commodities market.
I know this is the worst time to start buying and selling on my own, but I thinks it is also a very excited time to start. I plan to use only 10k and buy small amounts of one specific stock to test my instincts. I have lost so much already that 10k more does not matter, at least I will have some control and I will be making the decisions Is Scottrade the best place to start?
I think that it is absolutely crazy to start playing the stock market in the middle of a crisis! The volatility is at record levels and the risk is immense. I am not at all convinced that we’re anywhere near the bottom. If the market falls through 7,700 - LOOK OUT BELOW! I also disagree with your assertion that you have some control in the stock market. As a small investor, you have absolutely no control in the market. The big players and the government are in complete control and the small investor is just hitching a ride. You would probably make a lot more money putting your money in a bank CD than gambling in the market without the knowledge or experience.
Good Luck,
Mike
Let’s step back here and THINK…
What if…the stock market acted like housing??? Oh wait…it already is!!!
To follow this logic let me lay out a very simply theory I’ve been working on…
We need to establish a few basic points first…
By now even the idiot economists don’t argue about a recession. They NOW know, what we’ve known for over a year. IT’S HERE!!!
As this recession becomes MASSIVE, housing prices will CONTINUE TO FALL because recessions create JOB LOSSES. I LOVE the NAR data about how housing is turning up. :banghead Yea, and car sales are just BOOMING all over the country too!!! Do these dopes even READ???
So here’s the TIE IN…If we have a housing market that has ALREADY corrected 30-40% from peak…and it will CONTINUE to correct from THESE LEVELS due to increasing job losses. I personally see AT LEAST another 30% down side in housing from HERE. So with that in mind…
WHY CAN’T WE HAVE A STOCK MARKET THAT DOES THE EXACT SAME THING??? (Correct another 20 -30% from THESE levels)
This economy is going to get hit harder than ANYTHING any of us have ever seen. Once Wall St. realizes this, the market will FALL…and it will fall hard. Today we had news of THE BIGGEST goverment intervention in the HISTORY OF THE PLANET, and the market shrugged it off. THAT my friends is a SCREAMING NEON SIGN!!!
Mike,
Sleep easy at night my friend. FORD is NO WAY going bankrupt.
How do I know this???
Simply LOOK at what has happened to the stock market since the treasury let all the shares holders in Fannie and Freddie take it in the shorts. Paulson SCREWED UP…His intentions were great, but he completely undermined the confidence SHAREHOLDERS had in their STOCKS!! THIS WILL NOT be repeated because letting those Fannie and Freddie shareholders take that kind of loss LIT THE FUSE ON WHAT WE HAVE NOW. You WILL NOT see the FEDS handle a similar situation the same way. A few more of those, and they’ll create an atmosphere of COMPLETE WALK AWAY for shareholders.
Now the tables have turned…It’s the GOVERMENT that NEEDS those shareholders to stay IN THOSE STOCKS. Without them it’s OVER!!!
Ford will get ANY, and ALL the money, they need from a Federal Goverment because we will be SWIMMING in UNEMPLOYED former TAX PAYERS very soon. They LAST thing they will do is allow TENS OF THOUSANDS more to hit the check lines by WATCHING as Ford or GM goes under. NOT GONNA HAPPEN!!!
One more point…There REASON bankruptcy is NOT an option for an auotmaker is simple…WHO WOULD BUY A CAR FROM A BANKRUPT CAR COMPANY??? These things come with 5 year warranties, they need PARTS, REPAIRS. A car maker that declares bankruptcy is NO LONGER A CAR MAKER…GAME OVER!!! That…and ONLY that, is why CHRYSLER received BILLIONS in loans guarantees from the FEDS in the 1980’s.
Another HUGE benefit of owning FORD at these prices???
The market can TANK and that stock ain’t gonna care. It’s been beat up so bad there’s nothing left to react.
I personally think this market can go down MUCH further than ANY of us think.