The smartest banker in the WORLD!!! (Wonder what car company stock he'd buy?)

Random Ramblings
1

Read it an weep…

http://www.forbes.com/2009/04/03/banking-andy-beal-business-wall-street-beal.html

The ONLY banker doing the right thing during the BOOM…

I found it especially disturbing that HIS BANK was “looked into” by regulators while the other IDIOTS flushed TRILLIONS down the toilet.

THIS is how ordinary people like us MUST invest. There is no way on earth we’re going to compete with the outright BS and LIES that get sold everyday on Wall St.
I LOVE the fact that WALL St. HATES Ford Motor Company. I can tell you all ONE THING…If they LOVED IT…I wouldn’t be anywhere near it.

THINK…THINK…THINK…

This guy is the ULTIMATE CONTRARIAN… He ZIGGED when everyone else ZAGGED…

NOW he gets PAID FOR IT!!! And the check will be H U G E !!!

Andy Beal…“Why do people pass on the GREAT DEALS and do all the stupid ones?”

Answer by FDJAKE…Because their SHEEP…Minions…Morons…Unable to put together an original thought.

2

FDJake,

Do you think we might see ford back down below 2 bucks again??

3

My best GUESS is…

Probably NOT…

If we get a decent pull back in this market, my advice would be to GET IN…ALL IN!!!

At some point the problem will be this…

KNOWING…REMEMBERING…CONSTANTLY THINKING ABOUT…

The time when you COULD have bought FORD at $2.50

I speak from experience here…Selling a stock you lost money on is CHILDS PLAY compared to BUYING a stock at a price 2 or 3 TIMES what you previously had the chance to buy in at.

I have REPEATEDLY warned guys here about TRADING Ford stock…I GUARANTEE…At some point…You WILL run into this…You trade in and out of the stock between $2 and $3…You make some SHORT MONEY (small $$$) But what ALWAYS happens is this…You sell off your shares and in ONE DAY Ford goes to $6.00 on some new sales report. It’s at $6 before the market evfen opens…Then you have a BIG TIME decision to make…Do I BUY BACK the same stock I just sold at TWICE the price??? Or do I WAIT…AS soon as you hesitate YOUR DONE…The stock moves to $8.00…Now it’s 4 TIMES what you sold it for…

There’s one thing everyone needs to remember about car companies…ANY car company…They can, and at some point WILL, release a quarterly sales number that will completely BLOW AWAY estimates…ESPECIALLY IN THE NEXT YEAR (2010) OR TWO…The expectations are NONE EXISTANT!!! When… not IF… that happens, the stock will rocket. REMEMBER…Sales are currently FALLING every month…Once that SLOWS or even STOPS this stock is MOVING HIGHER…When they actually start INCREASING sales…FORGET IT…The stock is GONE!!!

Listen…This boat is getting ready to leave the pier…I am now convinced current HISTORIC low mortgage rates, coupled with housing prices that are fast approaching 2002 levels mean ONE THING…

The end of this Real Estate disaster is insight…It might take a year or two, but at some point people WILL NOT be afraid of housing anymore.
When THAT happens…It may be too late for your Ford investment…Cars ALWAYS recover before HOUSING…Cars are MUST HAVE items…NO CAR = NO JOB in most parts of this country. Living in an apartment while you save for a down payment on a future home means that sector (housing) is always going to LAG autos…Has in every recession, always WILL…

At some point does it REALLY MATTER if you get in at $2.25 or $3.00???

The thing I’d worry about is NOT BEING IN AT ALL!!!

PS…The fact that you even ASKED that question should prove my point…Mentally…Your already playing the “If it just goes back to $____” game…Think about it…DO NOT let your emotions and fears play these games with you…Whats the worst case scenerio here IF you believe in this investment???
You buy some when we pull back from this 2 week rally…Then you buy MORE if it goes under $2.00???..In 4 years if the stock is at $20…What difference did it REALLY make???

I am in NO WAY taking a shot at you with that comment…Just trying to get you to SEE how the mind plays these tricks on people…SMART PEOPLE. Once you learn to recognise these little mind games you can counter act them and follow your plan.

4

Just to add another perspective, I’ll give my cent and a half.

Yes, what FDJake said could come true. However, it is also quite possible that GM will go through bankruptcy and the unions will be forced (kicking and screaming) to make REAL CONCESSIONS! Without REAL CONCESSIONS they will never be competitive with Toyota and other foreign auto makers. Once GM takes these concessions, one would like to think that the Ford employees will simply jump on board and accept the same concessions. That may not happen. Without these concessions, Ford is going to bleed cash until they must go into bankruptcy, probably about the end of the year. Since the government will have already put GM through bankruptcy, it will be easy to do the same for Ford. This is a VERY REAL RISK! In a bankruptcy, the shareholders will be wiped out - AS IN GET NOTHING! If you own a bunch of Ford stock, after the bankruptcy - YOU’LL HAVE NOTHING! Therefore, unless you have money that you can absolutely afford to lose, I would not buy a bunch of Ford stock for the long term.

I also disagree with the FDJake’s criticism of trading vs. long term investing. If the stock market has taught us anything, it is that all this long term hold nonsense that we’ve been bombarded with has been WRONG! Someone that put a bunch of money in the stock market with a long term buy and hold strategy 10 years ago hasn’t made a penny over the last 10 years. Should we believe that they will be ahead 10 years from now or should we consider the possibility that the US has had it’s best years and things will be downhill from here. Let’s get real, the socialists have borrowed and printed so much money for decades, for the purpose of creating an artifically high standard of living, that we are now BROKE! It’s time to pay the piper! The current spending spree is only making matters worse - MUCH WORSE! The rest of the world knows this and is telling us that our spending spree is a road to hell!

The point is that trading may be a much better strategy than buy and hold. I did one trade with Ford and made about $1.80 per share. If we think that Ford is going from $2.50 to $8 in the next 4 years, that’s a gain of $5.50 per share. I already made $1.80 per share in a very short period of time with my silly little covered call trading strategy. If I did that twice more by trading, I would make every penny that Ford stock is expected to make in the next few years without the risk.

I don’t think for a moment that our economic problems are almost over. In fact, I think they’ve barely started. Our standard of living has peaked and is headed DOWN! People with less money and a lower standard of living will be buying fewer cars and fewer houses. Obama and the left are enslaving millions of additional people with welfare and big government programs. These people will be poor and won’t be buying expensive new cars. The population of peak earners (age 49 - 54) is on the decline for the next 10 to 15 years. We can’t possibly provide the medicare and social security benefits we’ve promised. The stock market declines have destroyed the retirement of an entire generation. It’s not over - not even close!

All I’m saying is BE CAREFUL. Don’t bet the farm on Ford or any other stock. The downside risk is very real. FDJake is playing for a big win, but is risking a big loss (like with the QQQQ Puts). BTW, I thought that his play on the QQQQ Puts made perfect sense and I think that this market should have gone down - way down. However, no one could have anticipated the TRILLIONS of dollars that the government has wrecklessly thrown at this problem and the delaying effect on the inevitable decline. At any rate, he’s going to need a huge win on the Ford stock just to offset the loss from those QQQQ Puts.

Mike

5

I put heavy weight on certainty.

The first rule is not to lose. The second rule is not to forget the first rule.

I don’t try to jump over 7-foot bars. I look around for 1-foot bars that I can step over.

My favorite time frame for holding a stock is forever.

My idea of a group decision is to look in the mirror.

Ben made his customary calculation of value to price and said no.

Warren Buffett

6

Unlike Mike…I FIRMLY believe America is NOT going out of business.

Ford TODAY just cut their debt by $9 BILLION…The stock is now just under $4.00.

Ford stock is structured VERY DIFFERENTLY than GM…The Ford family holds what is known as SUPER SHARES. These allow the family to retain much more CONTROL over the company than GM’s majority shareholders have.

You can bank on ONE THING … The Ford family WILL NOT see those shares go to ZERO. A bankruptcy at Ford would wipe out the family…
Bond holders are snapping up shares of Ford RIGHT NOW…Ford raised that $9,000,000,000 buy CONVERTING bond holders into SHARE HOLDERS.

We’ll see who makes more money in the end…Mike’s got his play…I’ve got mine…

7

How is buy and hold a bad strategy? Don’t buy crappy companies and the strategy works just fine. Just because the average gain of the sheep out there buying and hold over the last decade was crap doesn’t mean the strategy is crap, it is just being implemented poorly.

8

I agree Rich,

The buy and hold strategy I’m talking about is COMPLETELY different than what Mike is quoting here.

The BS buy and hold that people have had fed to them for their entire lives was designed to KEEP money IN brokerage accounts. Buying a car companies stock during a HISTORIC down turn in the car business is COMPLETELY different process. The HOLD period for this investment is MAYBE 5 to 7 years. Then you SELL IT ALL…If it looks like things are getting really crazy…You sell it SOONER…This is NOT a traditional buy and hold investment.

As far as the Q’s go…Mike talks about this purchase like the entire investment is lost. It was a relatively small bet (based on total account value) on a market movement. If it eventually gets cut in half (still have till June) or even lower…It will not effect my investment plans with Ford in ANY WAY. I would also remind Mike to go back into my previous posts and look at my GOODYEAR stock purchase which I believe he coat tailed me on which is up BIG. (your welcome)

At some point the economy will turn. To sit here and talk like America is FINISHED as a economic power is incredibly short sighted.

Believe it or not…Americans WILL buy more cars in 2012 than they bought in 2009. With the Union concessions Ford will reap from a GM bankruptcy…Things look brighter by the day.

9
Unlike Mike.....I FIRMLY believe America is NOT going out of business.

I don’t think America is going out of business, I think it’s becoming a socialist country that is going DOWN THE TOILET! I firmly believe that we have lived through the best days of this country and that the United States will no longer be the world’s superpower!

The BS buy and hold that people have had fed to them for their entire lives was designed to KEEP money IN brokerage accounts. Buying a car companies stock during a HISTORIC down turn in the car business is COMPLETELY different process. The HOLD period for this investment is MAYBE 5 to 7 years. Then you SELL IT ALL.....If it looks like things are getting really crazy....You sell it SOONER.....This is NOT a traditional buy and hold investment.

I agree that if things happen as you expect, this is a good strategy that will make you a lot of money. On the other hand, if the taxpayers get fed up with all these bailouts and start screeming for blood, the politicians could easily allow Ford to go bankrupt and the Ford stock will be worthless. I think it’s about a 50-50 tossup at this point.

As far as the Q's go........Mike talks about this purchase like the entire investment is lost. It was a relatively small bet (based on total account value) on a market movement. If it eventually gets cut in half (still have till June) or even lower.....

I’m not trying to pimp you on the QQQQ trade, I’m just trying to point out to everyone that people (even experienced people) CAN AND DO lose money in the market. These puts will be worthless in a couple of months unless the market really crashes and you’ll have a big loss (like $40,000 as I recall). I’m just trying to add a little perspective.

Believe it or not.......Americans WILL buy more cars in 2012 than they bought in 2009. With the Union concessions Ford will reap from a GM bankruptcy...Things look brighter by the day

Things also looked brighter at about this same point in the great depression. Then, the slow grind to the bottom started and continued for the next two or three years.

What we have here IMO is nothing more than a bear market rally. All the pundits on TV are calling the bottom and to be honest, I don’t remember the last time that TV Pundits ever called a bottom successfully. People are overly optimistic and believe that the bottom is in. That is almost a 100% guarantee that it is not!

Mike

10

I SERIOUSLY DOUBT that taxpayers are going to start screaming for blood from THE ONLY AMERICAN car company that DID NOT take money from them!!!

As far as America becoming Socialist…It’s a PENDULUM…It swung so far RIGHT for so long it’s just swinging BACK now…Calm down…Anyone who counts this country out is MISSING SOMETHING.
There’s TOO MUCH WEALTH HERE (even after this bust)…there is no way on Gods green earth that all that MONEY as going down the toilet…The thing that separates this country from every other on earth is it’s LAWS…Mike…you call the U.S.A. a socialist country???..You need to do more traveling buddy. How about GERMANY??? ENGLAND…France???

You think the best days are in our past…I completely disagree… This is called a ROUGH PATCH or recession or even depression…Believe it or not…WE’VE HAD THEM NUMEROUS TIMES in the past…We’ve even had them with World Wars thrown in on top…It STILL couldn’t keep this country down.

What your missing here is SIMPLE…It’s what makes this country different than any other…

ANYONE…A N Y O N E …can come here, work hard, and make themselves a PILE of money…Try that in Mexico, Spain, Brazil…or China (you can’t even get INTO China to start a business without HUGE restraints put on you by the Communists.) That FREEDOM is PRICELESS!! Don’t ever sell it short!!!

I do agree with you about this rally…I’m not saying we’ve hit bottom here…What I AM saying is…I’m starting to see a THAW!!!
and from what we’ve been through…A THAW is good!!!

We agree on a lot more than we disagree on Mike…

You know I ALWAYS value your opinions!!! :beer

11

The difference this time FDJAKE is this country is in so much debt and at some point the countires who hold that debt are going to call these loans. Inflationary pressures will become so great from the printing of all this money that we are in for a very long downturn in this econmony. The country is bankrupt and the policies being implemented are doing nothing but aggravating and masking the more serious underlying issues.

I’m with Mike on this one.

12

You are right that these things are what HAVE made this country different from anywhere else. That is why so many of us are so concerned about where things are going right now. We are steadily making ourselves more like the other countries you mentioned and less like the country that pulled ourselves into superpower status.

Our government is making it harder and harder to " come here, work hard, and make a pile of money ". If you do that you are labeled rich and taxed to death by those that no longer want to work hard and want to redistribute the wealth ( Socialism ).

I have said before the things that made this country a power are all in jeopardy.

 Laws that allow freedom.  We are being consistently scared into giving up our freedoms.

 Tons of natural resources.  Which thanks to radicals we can no longer access or use.

 A powerful work ethic in the majority of our country.  Unions and a safety net of comfortable welfare are steadily taking away the incentive to work hard.

 Capitalist market system.  We hit a bump with contraction, and I have heard numerous people saying,  "well that isn't working, what is so bad about socialism? "  If that statement itself isn't enough to convince you that people here are sorely lacking in the discernment needed to put the right people in power to fix this mess, then I don't know what will.

  If and until it gets painful enough that people start to see these things again, it will just be a slow swirl getting closer and closer to the bottom.

my 2 cents,

DB

13

By the way,

We just bought a new Ford Tractor for my Farming business.

It took 4 months to get to us.

It was made in Europe.

We can’t even make tractors in this country any more because of labor and environmental issues. Who would have thought that it would be more cost effective to do this in Europe than here?

DB

14

Couple of quick points here…

If UNIONS are responsible for the havoc in the U.S. business system how do you explain that FACT that Union membership is at an ALL TIME LOW in the USA. In contrast…during the BOOM times of the 1950’s Union membership was at all time highs. This was when EVERYTHING was MADE IN THE USA.

I’m willing to bet that a MAJORITY of the people here directly benefited from those Union wages. That doesn’t mean YOU received them, or your father received them…but at some point in the food chain, those wages paid for your parents homes, cars, furniture, ect…Those payments came even if you NEVER had a Union member in your family. If your family built houses…those houses were purchased with those increasing wages…If your family owned a restaurant…they did well because people had MONEY to spend there. It’s all linked. The Unions are taking a beating now because they got GREEDY…along with EVERY ONE ELSE in this country. We didn;t have a NEGATIVE savings rate becasue Americans were DONATING all their money to CHARITIES…This last 30 years have been the DECADES of the PIG!!! It doesn’t matter if the PIG worked on Wall St. a mortgage brokerage firm, a realty company, or a Union…We all stuffed our faces…Now we’re all gonna pay for it…

This is the natural correction process at work…It isn’t OVER here…It just RE-ALLIGNING.

Anyone here rememebr the 1970’s???

Do yourself a favor and look at some old news footage of those days…
It boggles my mind to see how FILTHY the streets were then, the water was absolutely LOADED with pollutants, it got so bad that Striped Bass were virtually wiped out by the 1980’s on the Eastern Sea Board. Cars were absolute JUNK because they were choked to DEATH by emmision controls…BUT…look what that lead to…Fuel injection systems that run SUPER CLEAN…Our water is cleaner, so’s the air. I don;t see KIDS rolling down car windows and throwing BAG FULLS of GARBAGE out those windows…but I sure do remember seeing that when I was a kid.

As far as things being made over seas…

Get used to it…It’s not called a GLOBAL ECONOMY for nothing.

And giving up FREEDOM???

REALLY??? You can thank George W. for that…That piece of sh*t stole more freedom from Americans than any President in our History.

As far as those loans being called???

Who’s gonna call them??? CHINA…NOT IN A MILLION YEARS…
Want to know why??? They call those loans and IMMEDIATELY the U.S> Goverment will let the DOLLAR CRASH…THEY KNOW IT…WE KNOW IT…It AIN’T HAPPENING…

It’s called MUTULALLY ASSURED DESTRUCTION!!! China PURCHASED ALL THAT DEBT…NOW THEY OWN IT…We go down…THEY go down!!!
Why do you think they CONTINUE to BUY IT??? If they DON’T it sets off a domino effect that CRUSHES their INVESTMENT…and it’s a HUGE investment on their part.

NOT HAPPENING!!

I am NOT saying the recession is OVER or we’re not going to feel REAL PAIN here for a while…All I’m saying is this…

Betting against the USA has never paid off…We’ve been written off for over 200 years…It’s been a LOSING BET everytime!

One last thing…

Does anyone else here find it some what IRONIC that I am now DEBATING with people over this RECESSION…the same recession that some REFUSED to believe would even appear…
That alone makes me feel even MORE upbeat!!! I’m ALWAYS early…ALWAYS.

15

The government is out of control and I didn’t like the last 4 years of the Bush administration either. Quit spending and enslaving people to government sponsored handouts.

Unions served their purpose at one time but in the last last 30 years they wore out their welcome and very well were the reason many jobs moved overseas.

Cut the corporate tax rates to 10% and business will setup shop here again which will create jobs. Hammering businesses for more money through taxation isn’t the answer. And a governerment spending 1.8 trillion above what it takes in sure as hell isn’t the answer. This albatross around our neck called the National debt is what will lead to the Globalization that will surely neutralize all the principles in which this country was founded upon. New World order? Every other country i the world is rooting against us and we are laying the foundation for them to get their wish. Our founding fathers would be doing cartwheels in their graves if they knew some of these policies being put in place.

16

Excellent points. I agree with a lot of what your saying.

17

Ford is blowing up in the premarket, gonna have another good day.

Pre-Market: 4.16‎ +0.21‎ (5.32%‎) Apr 9 9:00am ET

This puts me around 45% up since 2 weeks ago when I bought in at $2.80. :cool

18

Not bad huh Rich???

And the REAL fun hasn’t even started yet…Within the next 2 years 80% of Fords entire lineup will be COMPLETELY NEW CARS!!! The timing could not be better!!

What you need to remember about this stock is this…

The Ford that exists in 2012 will be completely different from ANY PREVIOUS variation. at no time in Fords past have the changes been so dramatic.

Jaguar is GONE…Ford lost money on that PIG EVERY SINGLE YEAR THEY OWNED IT.

Aston Martin GONE…How smart was this move??? They dumped Aston at the PEAK of the exotic car buying frenzy. (anyone think there’s STILL a 2 year wait to get a new Ferrari??? There ISN’T) The economy now sucks…not a lot of demand for $200,000+++ custom built sports cars these days.

Land Rover… GONE…A consistant BOTTOM DWELLER in the JD Power reliabilty surveys EVERY SINGLE YEAR. I cracked open a cold one the day the sale of this PIG was finalized!!!

Next up…VOLVO…BYE BYE…See ya…Don’t let the door hit you in the *ss on the way out. It will probably sell to the Chinese who are DIEING to buy a car company that has vehicles that don’t fold up like aluminum beer cans when they hit something. Volvo should bring a least $1 billion.

That’s leaves Ford just 3 brands…Ford, Lincoln, and Mercury.
Mulally is about to stream line these bad boys like you can’t even imagine. Wait till you see what’s coming for these brands. Common platforms EXACTLY like Toyota does with the Lexus brand…Common drive trains, Mullaly is a student of toyota and modeled Boeings entire manufacturing process on the Toyota model. Wait till you see how this works for Ford in the next 5 years!!! It’s already paying HUGE dividends in warranty repair savings. Ford saved $500,000,000 last year because of better build quality.

My best guess is Ford will be NORTH of $20/share within 5 years and once they re-instate the dividend… Then the sky’s the limit.

BUY IT any chance you get!!!