I thought I’d lay this out for you guys so you could spot the evolution of a rebounding car company stock.
I know I’m EARLY to this show…I was EARLY to the HOUSING BUST TOO…I remember having knock down drag out arguements with people here about what was coming…
Funny isn’t it???
I haven’t been called “Chicken little” in a LONG TIME. :biggrin
So now I’m AGAIN early to this car company stock call…
Here’s what you need to know…
The current prices these businesses now carry WILL NOT lastr forever.
Sales of new cars are NON EXISTANT…They continue to FALL…
BUT…At some point…Those FALLING numbers (like in housing) will SLOW…eventually they STOP getting worse…Then…like spring…They start to GROW…
At some point…believe it or not…The biggest problem these companies will face will be MAKING ENOUGH CARS TO MEET DEMAND…This happens after EVERY recession…Because… In EVERY RECESSION, car companies CUT production to the BONE…Then…after a few years…all at once…like a switch has been flipped…Consumers start heading back to the showrooms to replace the OLD CARS they rode out the recession in…
Ford…will be fantastic…(all my opinion) The Ford family…(the actual PEOPLE) derived the bulk of their yearly income from the nice DIVIDEND that Ford stock paid…That went away 2 years ago…The family WANTS IT BACK…Once this housing bust levels off and the FEAR subsides…people WILL buy cars again…I know this is RADICAL THINKING folks…But it WILL happen.
The great thing about buying stock in these car companies is this…WALL ST. isn’t about to WAIT for the Ford family to get those diviidend checks again…The stock will FLY as soon as those sales numbers STOP falling…A small light in a dark tunnel makes things BRIGHTER.
But the BEST part comes in the outlying years…
Once Ford eventually lights off those dividend payments (and they will because Alan Mulally gets TENS OF MILLIONS the day that first check goes out)…PENSIONS…INSURANCE Companies…Mutaul Funds…Private banks will ALL get the GREEN LIGHT to buy the stock…This happens after every recession…Its like clockwork…The stock they HATED at $3.00 they now LOVE at $20 because of the DIVIDEND!!!
Remember…These stocks will move long BEFORE sales return to higher levels…The BLEEDING just needs to stop…Once that happens…The boys on the street know whats coming next!!!
Right now we’re CHUMMING the water…Things look BAD…UGLY even…lot’s of BLOOD in the water…BUT…
SHARKS LOVE BLOOD!!!