Good thing Chrysler just came out with that limited lifetime power train warranty…
It’s Chrysler’s lifetime, not the owner’s!
Mike
I just bought AA (Alcoa) at 7.35 and have an order in to sell the Dec $7.5 covered call at $1.08. Update: I lowered my order to $1.00 and my Dec $7.50 covered call was filled at $1.04. That essentially makes my basis in AA $6.31.
Mike
senators come to some agreement @ 2 and 2:30 for details
F and GM are skyrocketing from their lows today :beer
Go Ford! Go Ford! Go Ford! I have an order in to sell the Dec. $3 Covered Call for $.54.
Mike
How can they announce an agreement has been made and the details will be announced @ 2:30 news conference then come back and say ooops we dont have a deal yet. we want the auto’s to show us their plans. :bs
how crooked is this government :argue
way to pump and dump, very well done. and they are charging mark cuban with insider trading. I’m sure there was no insider trading today on F and GM :crossfingers
How can they announce an agreement has been made and the details will be announced @ 2:30 news conference then come back and say ooops we dont have a deal yet. we want the auto's to show us their plans
It would be absolutely humorous if they weren’t contributing to the destruction of the economy. Larry, Curly, and Mo - that’s how I would describe them.
Mike
This was such a good topic I thought I’d resurrect it! :biggrin Besides, it has some good points on what options are etc… :biggrin
Anyone still holding Ford stock should be concerned about the structure of the bailout that is coming. If it’s a pre-packaged bankruptcy and if it includes Ford (I don’t think it will), then the stock will be worthless. I’m expecting that whatever bailout is announced today will apply to only GM and Chrylser.
In any case, I’m in good shape. I sold my Ford stock at $3.49 (as I posted in real time) at a nice profit and am waiting for it to go significantly lower before re-buying it.
Mike
Your gonna regret selling that Ford stock Mike…
Bush basically GAVE them that money WITH ALMOST NO STRINGS ATTACHED. They DO have to report back in March. By then “DUBYA” will be sitting on a porch somewhere in Texas, and his days of screwing up this country will be OVER!!!
FORD DIDN’T NEED these bridge loans IMMEDIATELY (if at all)…They’ll wait until Obama gets in and then they’ll sit down and negotiate a deal with a President with a FULL BRAIN instead of a HALF WIT!!!
Don’t forget to add in all the FOREIGN MONEY that Ford is RAKING IN from SWEDEN and other European countries where Ford builds cars. Those loans alone add up to OVER $6,000,000,000…
Yahoo this morning has the lastest list of the BEST SELLING vehicles in the U.S.
NUMBER 1…FORD’S F-150…
BIGGEST LOSER??? TOYOTA’S PRIUS!!!
Looks like those Gas prices from last summer are all but a bad memory for our BRILLANT POPULATION!!
Gee…I wonder what happens to car sales when the recession ends in 3 to 4 years???
I’ll take a shot at it…
THEY’LL BUY NEW CARS AND TRUCKS LIKE A BUNCH OF LOTTERY WINNING TEENAGERS!!!
Playing the SHORT MONEY trade on this investment is a WASTE OF TIME.
BUY FORD STOCK and FORGET YOU OWN IT!!! The money you’ll have made in 5 years will BLOW YOUR MIND!!! I’m talking about LIFE CHANGING MONEY here.
Wait till you guy’s see the cars FORD has coming here in the next 3 years!!!
Your gonna regret selling that Ford stock Mike....
Right now, I’m very happy with my decision. I thought Ford would go to $3.75 the other day. Trying not to be too greedy, I put in my order to sell at $3.49 and it got filled. The high ended up being $3.50. This morning, the stock is in the $2.80 range (pre-market). The news is now out on the bailout, with Bush the Socialist kicking the can down the road without demanding meaningful concessions.
I am a big believer in “buy on the rumor, sell on the news”. The news is now out on the first round of the bailout and it’s a loser for everyone involved. The automakers didn’t get enough money to make a significant difference and they aren’t going to be forced into lowering their expenses which would enable long term viability. The workers will have jobs for the next few months but additional debt is further damaging their future. The economy is weakening and people are losing jobs. Who will be buying a new car? NOT ME!
The bottom line is that today’s bailout announcement didn’t fix ANYTHING. So, I think that I’ll be able to buy Ford MUCH cheaper than $3.49 in the near future. In fact, I could buy it for less than $3 RIGHT NOW!
Mike
Here’s the problem…
If you continue to trade in and out of Ford Stock you’ll make money, That’s the good news…The bad news is while chasing $1/share or $2/share you’ll miss the bigger moves. This happens because people always look at what they COULD have purchased a stock for…As the stock price moves to new highs, they WAIT for it to drop back to their last sale price, but it doesn’t. This is what you just said you planned on doing.
I’m not arguing with you Mike…I think you’re probably right. We’re gonna see a sell off here at anytime. I just mention this to you so it’s in the back of your mind.
Ford is THE ONLY viable AMERICAN CAR COMPANY…THE ONLY ONE!!
Chrysler is DONE…I do not see a scenerio where GM turns around.
Ford on the other hand WILL GET the UAW to agree to move up their 2010 contract concessions (which put them on par with Japanese car makers) They WILL get any additional fianancing they need from Obama’s White House, and at that point it’s a TIME ISSUE.
1 TRILLION DOLLARS are going to be thrown at this economy in the form of a DEEP stimulus package that WILL Create jobs. Just the infastructure plan alone will create MASSIVE construction spending and JOBS.
It takes a LONG LENS to see these moves…The thing you DON’T want to do is forget the long term investment IDEA. That Idea is FORD WILL survive and eventually prosper. AS I’ve said before…Ford DOES NOT have to beat Honda and Toyota…
They only have to BEAT the Ford of 2008!!! Any uptick in sales accompanied by dropping costs will send this stock FLYING!! It’s YEARS out…But it IS coming…Don’t miss the BIG MONEY trying to make the SHORT MONEY!!!
My problem with taking a long term view is that you must eventually sell if you want to make a profit. The issue becomes the point at which you sell. Holding a stock forever is not an option, because no-one lives forever. Peopl that have taken the long term view have been screwed. Their stock holdings and 401Ks have been decimated. If this is the year they retired, they will be living retirement in much less style than hoped for (or they will find themselves being a greeter at Walmart as you discussed).
So, the question becomes, if I buy Ford now at what price do I sell? Do I sell at $10, $20, $35? How long will I wait for it to reach those levels? I’m not saying that this is a bad plan. It’s kind of like buying a house in California today that has negative cash flow and planning to sell once it appreciates. It can be VERY profitable if it all works out.
On the other hand, I buy silly little houses and apartment buildings in Ohio that will never have runaway appreciation, but I get my equity NOW by purchasing them at a huge discount and I also get the cash flow NOW. Yes, I’m potentially giving up huge appreciation at some time in the future, but again the question is when would I sell if I was betting on appreciation. A couple of years ago, many people had huge paper profits on their California property. Those that sold at or near the top did well. Those that are still holding have been severly damaged and may never recover.
I guess the bottom line is that I like to take my profits now and trade again tomorrow or next week (I’m not a day trader).
FDJake, how will you know when to sell your Ford stock? What number are you looking for?
Mike
Good question Mike…
Here’s how I look at it…
What NO ONE is looking at (as usual) is the GIGANTIC CHANGES Alan Mulally has made at Ford that will effect it’s future. But let’s forget that right now and look at the PAST for some insight into the FUTURE.
Ford STOPPED paying a dividend a few years ago on it’s stock. The FORD FAMILY derived a SUBSTANTIAL portion of it’s yearly income from that dividend. These folks (although still rich) took a HUGE HAIRCUT from the dropping of that payment.
Why is that important???
One of Mullaly’s priorities, once Ford is profitable, is to GET THAT DIVIDEND RE-INSTATED!!! His compensation (bonus) is actually TIED to that goal. ( The DAY that dividend comes back, Alan gets 20 MILLION shares of Ford stock!)
So my sell point will be sometime AFTER that dividend re-starts. At that point the mutual funds, pensions, charities, and individual investors will POUR into this stock once that dividend re-appears. I won’t sell at exactly that point, but I will be CLOSELY watching. I have NO INTENTION of keeping this stock.
Ford’s stock has historically traded from $20 to $30/ share. What you DO NOT want to do is put THAT price target on THIS STOCK…
WHY???
Because you’ll be leaving a TON of money on the table. Once Ford turns this around that company will be on every business magazine, every news show, every business newspaper for YEARS. Iacocca isn’t a household name for the MUSTANG…He’s remembered for saving CHRYSLER.
By using that dividend re-instatement as a target selling point…(and it WILL happen) You’ll turn a decent investment into a GRAND SLAM!!!
This is coming from a non-trader, here, but all this is is basically different investing strategies. I can see where both could work and each is geared toward a different mentality.
Jake is in it for the long haul. Basically, the buy and hold and wait for “the day” type.
Mike is going after the short-term, reasonable profits. From my limited knowledge, sounds kind of like a step or two above day-trading and it works for him.
And done correctly, I could see that he, too, could make a sizeable return on Ford stock bought and sold properly. I mean, if you bought at $2, sold at $3.50, bought at $3, sold at $5, etc., etc., it works.
Raj
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???
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
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.
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
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…