Go, Fireman, Go!!!
I really want this to work out for you. I wish I had $25k to put into Ford options… I’m working on it.
As far as cars go, I’ve owned 17 domestic cars in my life. Each one broke down WAY too often. My current car is a Honda Accord. Bought it new in 2005. Not a peep out of it. The car before it was a 95’ Camry. I bought it with 74k mi. on it and drove it to 150k mi. for 4 yrs. with no issues. Here’s my point, a large % of domestic cars are made from foreign ( Japan, China etc…) parts. IMO, the increase in domestic reliability is in large part due to using foreign parts. It’s going to take a long time for domestics to truly rival the LONG TERM RELIABILTY of Honda & Toyota overall. Show me that and a better price and perhaps I’d better faith in domestics. What good is a gas miser if you’re fixing it frequently? You’re just spending your money elsewhere.
When it comes to college education. Here’s my plan ( which is about 15 yrs. away). I’m saying to my kids, " Take out student loans in your name for all college costs. WHEN YOU FINISH, I’ll pay off all the college loans. If you don’t get a degree, YOU PAY FOR THEM YOURSELF." I put myself through college. When you’re paying your own money you’ll do whatever it takes to pass the courses. The kids have nothing to lose and my money is not wasted. They also don’t have to worry about working full time when in school.
You bring up a VERY GOOD point. Time and WORD OF MOUTH will tell if Ford has reached the same long term reliability levels as Honda and Toyota. Ford’s quality HAS risen to a level that, according to Consumer Reports “rivals Honda and Toyota.” The problem Ford has is they must convince buyers that they are a viable alternative.
To do this Ford recently hired Jim Farley as marketing President. It may be of interest to note that Mr. Farley is credited with launching LEXUS as a brand in the USA in 1990.
What you may not know is when Toyota launched LEXUS the Press said it would NEVER compete with the Luxury German brands such as Mercedes and BMW. At the time, it was FAR from a given that LEXUS would succeed. Farley launched what is now considered a “Classic” ad campaign. Does anyone remember Infinity’s ads that ran at the same time??? They had pictures of babbling brooks, moss covered rocks, basically… WORTHLESS!!! LEXUS used it’s marketing to SELL IT’S CARS!!! Not some BS lifestyle. It high lighted the REASONS people should actually BUY ONE!!! It was a HUGE success. After LEXUS, Farley handled the SCION launch for Toyota. A 180 degree departure from the premium Lexus brand. Farley hit that one out of the park too!!!
Farley is now launching Ford’s version of that LEXUS/SCION campaign. It’s called “DRIVE ONE” This is CLASSIC Farley at his best. Straight forward, DIRECT TO THE BUYER, no BS “lifestyle” ads. Just a head on REASON TO BUY A FORD campaign. In the ads Toyota and Honda drivers are given a Ford to use for a week. They then pass the car on to a friend. Ford is NOT using actors for this. During Ford’s research for this campaign they discovered that after actually DRIVING Ford’s new products, over 80% said they would BUY a FORD. These cars are VERY impressive. For the first time in it’s HISTORY Ford actually consulted with it’s dealer body for advice on how to market these cars. Farley used this same technique at TOYOTA with great success.
Remember one thing…NO ONE…NO ONE… buys a Camry or Accord for the DRIVING EXPERIENCE!! These cars are APPLIANCES. If a car company can rival the reliablity of the Japanese and ADD to the driving experience THAT COMPANY WILL SELL CARS!!!
Again…Fords competition is…FORD…If they simply DO BETTER than last year???
The stock goes UP!!!
It would be great if the domestics can reach that long term reliabilty of the foreign cars. But I think it may cost the domestic companies much more than their foregn competitors to do it.
One other thought, in tough economic times, people will probably tend to buy used, gas misers to save money or just fix the cars they have. I don’t know how that impacts Ford’s stock, but it should interesting to see how it all plays out.
I agree. I cant see an increase in new car purchases during a recession. Just like new house purchases.
The question then becomes…Does this recession last forever???
A recession is THE BEST thing that can happen to the new car business!!
WHAT??? Pete, have you lost your marbles???
No…You guy’s have already hit on it. As Phlemboy correctly pointed out…During a recession people KEEP their cars. THEY DON’T BUY NEW ONE’S. The beauty of that fact is, it eventually creates a HUGE PENT UP DEMAND for NEW CARS!! This has occured in EVERY recession this country has ever had.
I have no idea as to exactly WHEN Ford will benefit from the current recession. What I do know is this…I have just about 2 years to wait this recession out. Even if we’re STILL not out of it by then. I will simply convert those options into stock (at $7.50/share) and wait for the eventual turn. Meanwhile Ford will continue to add new cars to their line up. The new Focus is selling at 30% higher levels than the old one. Edge/MKX sales are 20% over projections, The new FLEX hit’s showroom’s this summer. Do you think it will sell better than the almost 10 year old EXPLORER??? Of coarse it will, recession or no recession. Ford’s numbers will be better because they have SUCKED so badly that this company could almost sell bicycles and put up better numbers than they have in the last 3 years. Better or IMPROVING is what WALL St. will react to. Once that fuse is lit, stand back. Big Institutional Investors will buy this stock like it’s going out of style as soon as they see a GLIMMER of a sustainable turn around at Ford.
The GREAT thing about recessions is historically, the very FIRST thing people buy at the END of that recession IS A NEW CAR!!! As already pointed out…by keeping those older used cars to “ride out” the down turn, future demand is GUARANTEED!!!
I owned a successful used car dealership for 15+ years. My family has been in the business for over 40. You can almost set your watch to these cycles. Cars are no longer LUXURY ITEMS. They are necessities.
No matter how great the car, it eventually will wear out and need replacement.
Look at the TRENDS and buy your stocks based on what will happen TOMMORROW, not what headlines your reading TODAY!!!
One last point…I laid it all out here for anyone who wants to read it. It’s HERO or ZERO, only time will tell. BUT…remember these IDEAS, the IDEA is the seed!!! You plant it and WAIT. I have made a lot of money over the years going the SAME THING OVER and OVER. This is one of those things. When pieces of a huge puzzle start to get put together in a way that makes sense PAY ATTENTION TO THAT!!! Ford is putting a puzzle together right now. It’s going better than MANY realize!!
Believe it or not really doesn’t matter to me. The point I was trying to make was NOT to guess, or speculate the market. If one is so good at predicting the market or guessing it will go up 300 points one day and down another, then that person should already be a Billionaire instead of sitting here yapping or predicting the market up or down … No offense…
I can see the point of buying new car stock now and wait for the BOOM. People will feel the need to reward themselves for all their time of “hardship”. The question remains, which car company will be best positioned to capitalize. I feel the companies that dominated before will have an advantage.
Again THANK YOU ROOKIE!! I remember arguing with you a few times about stock market investments. You have FORGOTTEN more about investing in stocks than I will ever know!!! Thanks for the advice! ( I do listen)
Nice way to play it…
NDLM,
You have no idea what I have earned this year…I speak often with poster allagash…He can tell you that I bought size on the QQQQ and many other closed end funds that I posted here during the bloodbath…Your post was pointless and like I said post something of value…Don’t get your panties in a bunch…
Also fwiw NDLM I get paid probably 10x-20x your annual salary to do exactly that , speculate…And so do the sharpest minds on wall street…Now post something of value and enough of the “I bought GOOG in 2005”…I make bold predictions because thats what I get paid to do…And if you look at my old posts I have hit the mark every time…Listen and earn…
Also fwiw NDLM I get paid probably 10x-20x your annual salary to do exactly that , speculate…
Again, your guru wall street expertise is speculation. Speculation and prediction is a very nice way to investing LOL… Listen from a wall street guru making prediction and speculation is the best way to invest… LOL.
If I am not mistaken from reading your posts, you are some of type hedge fund manager managing and investing investors’ money. FYI, I have people like you working for me. If I don’t like the way they handle my porfolio or if I know that they speculate or predict the market, do you know what I would do? I would get rid of them in a heart beat. Now … who will listen?.. No offense!
NDLM,
You and I have a lot in common. I made the exact same comments about Rookie that you have.
I’m not knocking you in anyway. But…I have to tell you…Rookie knows of what he speaks!!
He may sound cocky at times but what I’m finally coming to realize is HE HAS TO BE COCKY in the business he’s in! As soon as he starts doubting himself it’s GAME OVER. This is nothing like investing the way you and I do it. I understand your points completely. They’re good ones. I can tell you from listening to Rookie for well over a year now that he is right on his predictions with an astonishing rate of reliability.
You can be successful doing the same thing 10 different ways. I’m sure you are very successful investing your way. Rookie does it his way and HAS made some very bold preditions here that proved correct. I’m not talking about big broad economic trend predictions, I’m talking about VERY specific market movement predictions and WHEN they would occur. I’ve been investing my own money for over 20 years. It takes a LOT to impress me. I have to say, I’m impressed with Rookie.
You can LEARN a LOT from this guy, don’t make the mistake I made and write him off as just another talking heasd from Wall Street. Keep track of his posts, they offer a lot of insight. Believe me…your posts and my old posts are almost interchangable. I too believe that 90% of Wall St. “experts” are half a step above used car salesmen (ex- used car dealer here) After a while I came to the conclusion that Rookie is VERY smart, AND… he’s willing to give us his insights into markets!!! You can USE that info.
I’m not saying you should stop doing what your doing, just don’t dismiss his insights.
It all comes done to TOOLS. Each one does a different job, no single tool does everything. Having access to as many tools as possible makes doing ANY job easier. Having access to the members of REI CLUB has certainly helped my investing in real estate, and stocks.
One thing for those new to options to know is that their value drops over time. If all else is equal, that money that is invested in options disappears as you close with the experation date.
Owning options can be a great way to make a play with limited risk, but make sure you understand how time affects value. Options are often presented as a sure way to make money, but the vast majority of options expire worthless.
Example of fdjake’s purchase as I understand it.
Option cost = $1.20 for a $7.50 option
IF
price goes to $15.00 and he excersises his option
Then … He buys at $7.50 sells at $15 and makes $7.50 minus $1.20 or $6.30
If he had owned them outright he would have made the full $7.50.
IF
Price goes down his option expires worthless and he is out the $1.20 but never more than that.
IF
Price stay at $7.50 the option expires worthless and the $1.20 is lost.
In fact the price must rise more than his $1.20 investment for him to make money by excersizing the contract.
If the market is still down and the option is converted to stock at $7.50 at expiration, then the stock will have a basis of $8.70 regardless of where the price is at at the time.
Correct me if I’m wrong, puts and calls make my head hurt, and I have mostly only used them in commodities.
DB
You are EXACTLY right.
I look at this as a $25,000 insurance policy on 20,000 shares of Ford stock.
As d_sbrown correctly points out…by 2010 if Ford stock is not above the $7.50 strike price my $25,000 is gone. That’s the RISK in this strategy. The stock did close at $7.45 on Friday.
My feeling is that by 2010 Ford, which is still on track for a 2009 return to profitablility, will be higher IF…and that’s where the risk is…IF…they post profits in 2009. Wall Street has NO FAITH in Ford what so ever. If Ford does execute they’ll be on EVERY major business magazine, newspaper, and financial news show you can imagine. This will (and has in the past with CHYRSLER) FURTHER increased the companies turn around as the media BLITZ brings in even MORE buyers to those showrooms to see “THE TURN AROUND CAR COMPANY”
Guy’s remember what happens in the MEDIA when a story like this occurs!! IT’S COVERED LIKE THE HOUSING CRASH. They’ll blow the Ford turn around out of proportion just like they blow EVERYTHING else out!! But that’s GREAT for shareholders.
The difference is I’LL BE SELLING TO ALL THOSE PEOPLE WATCHING & READING THOSE STORIES. You MUST be ahead of the HERD to make REAL MONEY investing like this. I know Rookie’s gonna break my b*lls for saying this but it’s the truth…I made this EXACT same investment in Chrysler in 1991. They had fallen to single digits, they were dead and buried according to the “experts” The stock went from $9/share to $110/share when Mercedes bought out the then EXTREMELY PROFITABLE Chrysler Corp. You could have played this EXACT same trade THE FIRST TIME in the early 1980’s when Iacocca brought Chrysler back from the dead. Same story, same incredible return for share holders!!!
This is not rocket science.
Look at the TOP TRADERS on Wall St. They just published a list of the top 10 last week. They almost ALL shorted BANKS and HOUSING two or more years ago!!! That sounds like a NO BRAINER now. But at that time these guy’s must have been looked at like they were OUT OF THEIR MINDS!!! Those banks and hoome builders were making RECORD profits!! The HERD was piling into these stocks like this would NEVER end. Well it ended all right.
Cripes that nit wit… JIM CRAMER…on his JANUARY 2007 show BEGGED his audience to buy Goldman Sacs??? The worlds top traders were already SHORT those banks for over a year when THE HERD JUMPED in. In early 2007 Goldman was over $235/share!!! It now trades at $179 :shocked NICE CALL JIM!!!
Now we have FORD…DEAD, DONE, BURIED, OUT OF TOUCH, CAN’T COMPETE. That’s what the HERD SAYS…Here’s what the facts say…
Historic, LANDMARK, UAW contract that for the first time allows FORD to hire like HONDA and TOYOTA hire. No more $60/hr grass cutters at Ford. Also…FORD just handed a check for $3 billion to the UAW. NOW the UNION has to pay for IT’S MEMBERS retirement health care benefits. Ford no longer contributes!!
Consumer reports refused to give TOYOTA it’s favored maker status due to reoccuring QUALITY problems and unpredicted re-calls of TOYOTA PRODUCTS. WHO received the HIGHEST marks, lowest number of recalls and BEST QUALITY AWARD???..FORD!!!
Ford sales in CHINA…THE BIGGEST FUTURE MARKET FOR CARS ON PLANET EARTH increased 47% LAST QUARTER to 87,000 CARS…FOLKS…UP 47% LAST QUARTER!!! Thats 350,000 CARS A YEAR with an expected increase of 20% YEARLY for the market as a whole!!! When your DOUBLING the annual projected rate of increase and your doing that QUARTERLY…your doing something right!!!
Ford market share EXPLODED in Europe last year, up 9.9%!!! THAT’S MARKET SHARE, not sales!! If they eventually get anywhere NEAR those numbers in this country this stock will make a lot of people very wealthy. Guess where all those great FORD OF EUROPE cars are coming in the next 2 to 3 years??? RIGHT here to the good ole U.S.A. GLOBAL PRODUCT PRODUCTION!!! No more different Focus for USA, different focus for Europe, different for Australia. This is what FORD was doing until Alan Mullaly got there. He asked why FORD’s sold so well in EUROPE and not here??? Then he went to Engalnd and DROVE the European Focus, and Fusion. He and was BLOWN AWAY by the differences. He actually promoted the man responsible for those great selling cars to head Fords GLOBAL PRODUCT DIVISION. In the next 2 -3 years you we see this stategy play out. WATCH what Happens!!!
YOU HAVE TO BE IN BEFORE THE HERD!!!
However, I don’t bet on the market today at all. As a matter of fact, I had safely relocated my assets into money market, and others a month ago.
This is a post from NDLM not long ago…So which is it?..Are you owning stocks or in a money market account…Make up the story for the day…
Fwiw every single person who owns stocks,mutual funds of any kind is speculating in some form…I also highly doubt you would ever be fortunate enough to have gained acceptance financially to qualify to invest in a hedge fund…
I take the time to post my feeling on the market so others can learn and benefit…I try to post only useful things that people can benefit from financially…I won’t carry on this pissing contest with you…
fdjake,
Sounds like you are doing great…Just have patience…That is truly the key…
Thanks Rookie, I appreciate your insight…as always!!
fdjake
Your points are well taken. Let’s move on.
Regards!
Again, you are speculating without knowing who I am, what I do and how my financial situation looks like. I guess speculation is what you are good at, so let’s just leave it there.
In the United States, for an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year. This rule came into effect in 1933 by way of the Securities Act of 1933.
(http://en.wikipedia.org/wiki/Accredited_investor)
To have a net worth of at least one million US dollars or the income at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) might sound impossible to some people, however there are others don’t consider these numbers are hard to achieve at all.
Anyway, let’s move on.
Regards!
A house, a car, and a few bucks in the bank and you are there. At least in this area of NJ.
Taxes are a bitch though. $12k a year and growing.
Blue is bad…Blue is evil!
Keith
NDLM,
The responses you give show how inexperienced you are when it comes to asset management…An accredited investor can stay at Fidelity,Etrade…The type of asset management field I’m in takes much more liquid to be invested…But that’s irrelevant,point being is stop tailoring your posts for the current market conditions…I quickly noticed how you side stepped that part of the post with your run on response how you are worth a few bucks…
My dad is better than your dad thread now.
Everyone talks big online and they all live in their parent’s basement and drive a Chevy. Pointless to argue like that with text.
But if you want to meet behind the gym after school . . . 