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Old 01-30-2009, 03:08 PM   #21
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And approximately $100B of that $111B is intangible. So, some would note that is $10B of tangible equity with $550B in debt.
Well without getting into a debate about the quality of tangible and intangible assets on a balance sheet lets look at the big picture.

A GE Bull can look at the companies financials and conclude.
This is a 125 year old company with a history of growing profits, dividends and developing management. It is still very profitable, has a triple AAA credit rating (at least today)., and the company is selling for roughly book value. Certainly, the GE will be impacted by the great recession but it survived the great depression and even if it is force to slash its dividend in 1/2 I am still getting 2-3x on money that I'd get for a Treasury bond or CD..

A GE Bear can say GE is really an unregulated loan sharking operation, with a large collection of other business that are probably profitable but who knows. GE's balance sheet and profit statements are the work of creative accounting. If the company isn't technically insolvent it will soon be in the furture when hundreds of billions of loans that GE capital has on its books default.

For the last year or so GE Bears have had the more believable story according to Mr. Market.

In contrast when I look at Ford, I only see the bear story. This is company that lost 14 billion last year, and hasn't had a profitable year since 2005. The balance sheet is saddle with a mountain of debt and its only assets are things like Volvo which in world with a surplus of auto capacity aren't in high demand. Unless the economy recovers dramatically the only way it will survive is with government help which will almost certainly wipeout shareholders ala AIG.

As far as can tell the only reason to buy Ford stock is the greater fool theory, somebody want to make a case for owning the stock over the long-term?
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Old 01-30-2009, 03:34 PM   #22
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As far as can tell the only reason to buy Ford stock is the greater fool theory, somebody want to make a case for owning the stock over the long-term?
Ford may be getting a break. Looks like President Obama wants to help all the unions that endorsed him, like the UAW. Of course, anything that strengthens the UAW weakens Ford further, but I digress........
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Old 01-30-2009, 04:59 PM   #23
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Ford may be getting a break. Looks like President Obama wants to help all the unions that endorsed him, like the UAW. Of course, anything that strengthens the UAW weakens Ford further, but I digress........
I smell a soapbox post LOL. Yes, I am sure that UAW take over of Ford will be fabulous news for shareholders
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Old 01-30-2009, 09:08 PM   #24
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I'm looking a a serious gamble with Ford. Not their stock, but their bonds. If I buy the bonds, I may end up with an equity position, unlike those who buy the stock. Whether the equity position is worth anything is the gamble.
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Old 01-30-2009, 09:21 PM   #25
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I do think Ford bonds are potentially interesting. I've invested in several high yield bonds in companies like BAC, and ALD where I think the stock is too risky but the bonds or preferred stock is interesting. Obviously we are completely uncharted waters in how bond holders will be treated in partly government owned business. (I am assuming Ford will eventual receive government aid).

The good news is that uncertainity helps level the field for us unsophisticated investors vs the people like Brewer or Saluki who in the past actually understood what should happen . My gut level is the government will be fairly kind to bond holders, since they tend to have deep pockets and make large campaign contributions, and of course are TOO BIG TO FAIL.
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Old 01-30-2009, 10:39 PM   #26
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I smell a soapbox post LOL. Yes, I am sure that UAW take over of Ford will be fabulous news for shareholders
"With the merger complete, we now introduce The 2010 UAW/Ford Lada! Lada -- a new car for a new American Proletariat! Lada--because it is what we feel like making today."







Kidding aside, I hope Ford makes it. I have not been a Ford fan in the past, but I do admire the fact that they are cutting away a lot of waste (and maybe even some muscle) to get their company turned around before asking for government help. Indications are also that their quality is getting better (at the same time that Toyota is slipping). They "get it," and if only they can keep their focus and if gas prices stay low so they can sell some trucks in the interim, I think they might pull through. Of the big three, they deserve most to survive at this point.
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Old 01-31-2009, 12:04 AM   #27
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I'm rooting for Ford, too. In their core line they seem to have done the best job focusing on vehicles that have a market. Of course, I've always wanted an F-150. But the latest Ranger line is an awesome little (not so little) truck that for quality seems right there with a Tacoma and is significantly cheaper.
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Old 01-31-2009, 03:24 AM   #28
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As an American I am hoping for Ford and Chrysler to survive (GM should die IMO). Although as former Ford shareholder I detest the convoluted ownership structure of Ford which always seem to be design to benefit the Ford family, and screw the common shareholders. So I would not be at all upset to see the Ford family get taken to the cleaners.

The difference between being a shareholder at Berkshire Hathaway where Buffett treats you like a junior partner and a Ford shareholder where Ford management treats shareholders like crap is amazing. I'd say this even if the returns of Berkshire Hathaway and Ford were reversed.
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Old 02-02-2009, 04:25 PM   #29
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As an American I am hoping for Ford and Chrysler to survive (GM should die IMO). Although as former Ford shareholder I detest the convoluted ownership structure of Ford which always seem to be design to benefit the Ford family, and screw the common shareholders. So I would not be at all upset to see the Ford family get taken to the cleaners.

The difference between being a shareholder at Berkshire Hathaway where Buffett treats you like a junior partner and a Ford shareholder where Ford management treats shareholders like crap is amazing. I'd say this even if the returns of Berkshire Hathaway and Ford were reversed.
I guess I am a little different. I hope Chrysler dies. One of the Big Three will not make 2010. I think the worst products on the road are Chrysler. There's not a fuel efficient small or mid-sized car they make that ANYONE
wants to buy.

Ford has winners in the Focus, Fusion, F-150, and Edge. GM has winners in the Malibu, upcoming Cruze, maybe the Volt. As long as gas stays somewhat reasonable, there is still demand for the Tahoe.......

What Chrysler product stirs the blood? None that I know of. ALL of Chrysler's products are going back to the boxy look, like early 90's............
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Old 02-02-2009, 04:53 PM   #30
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Viper?
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Old 02-02-2009, 04:55 PM   #31
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Oh yeah FD, did you see the 50 drag cars that Chrysler is marketing in the Challenger?

Google it and take a look, they'll make your blood stir.
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Old 02-02-2009, 06:15 PM   #32
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Viper?
Nice car that almost NO ONE can afford.........
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Old 02-02-2009, 06:16 PM   #33
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Oh yeah FD, did you see the 50 drag cars that Chrysler is marketing in the Challenger?

Google it and take a look, they'll make your blood stir.
They need a car they can MASS PRODUCE and sell that works. Come on, what's exciting about a Sebring??

ANY Honda is about 5 times as exciting as a Dodge........
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Old 02-02-2009, 06:27 PM   #34
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OK, no drag car for you. So soon you forget about the K car.
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Old 02-02-2009, 08:42 PM   #35
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OK, no drag car for you. So soon you forget about the K car.
K car? Man, you're slayin me.........

I had a Gremlin, and my grandma had a Pacer. Those cars made a Pinto look sweet........

OK, educate me on the SLEEK hot Chrysler cars coming out, cuz all I see are boxes. Last GOOD design they had was the Crossfire, which didn't sell...........
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Old 02-02-2009, 08:48 PM   #36
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K car? Man, you're slayin me.........

I had a Gremlin, and my grandma had a Pacer. Those cars made a Pinto look sweet........

OK, educate me on the SLEEK hot Chrysler cars coming out, cuz all I see are boxes. Last GOOD design they had was the Crossfire, which didn't sell...........
So, are you telling me that the Honda Accord is sleek and hot?

See, variety makes the world go-round, I hated the look of the Crossfire.

The only cars I like from Chrysler are the muscle cars. If GE goes to 100 I'm getting meself on of those drag cars, too cool.
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Old 02-02-2009, 09:49 PM   #37
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So, are you telling me that the Honda Accord is sleek and hot?
Compared to the latest Chrysler offerings, unfortunately yes.......

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The only cars I like from Chrysler are the muscle cars. If GE goes to 100 I'm getting meself on of those drag cars, too cool.
I had one of those 318 Dodge Darts, that car was wicked fast. As you know, I had a 67 Chevelle SS convertible, still my favorite car.
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Old 02-02-2009, 10:07 PM   #38
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FD, in 1966 I bought a new Chevelle SS 396, regal red with a black vinyl top at the ripe old age of 17. I sold it in 1972 and got married. In 1974 my buddy who bought a 1967 Chevelle SS 396 in 1967 offered it to me and I bought it. In the years after I sold my original car my buddy and I worked on his car and put a 427 L88 into it. I kept the car for 10 years, she would run 11.30's at 128mph in the 1/4.

So I'm very familiar with the 1966 and 67 body style. Ah, to be young again.
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Old 02-02-2009, 10:23 PM   #39
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I guess I am a little different. I hope Chrysler dies. One of the Big Three will not make 2010. I think the worst products on the road are Chrysler. There's not a fuel efficient small or mid-sized car they make that ANYONE
wants to buy.

Ford has winners in the Focus, Fusion, F-150, and Edge. GM has winners in the Malibu, upcoming Cruze, maybe the Volt. As long as gas stays somewhat reasonable, there is still demand for the Tahoe.......

What Chrysler product stirs the blood? None that I know of. ALL of Chrysler's products are going back to the boxy look, like early 90's............
It was announced recently that Fiat would most likely be taking a big stake in Chrysler. That would give Fiat an instant new market in the US for it's small cars sold in Europe. Also, it would give Chrysler the small cars it doesn't have. It just might work out for Chrysler...

Fiat Nears Stake in Chrysler That Could Lead to Takeover - WSJ.com
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Old 02-02-2009, 10:40 PM   #40
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It was announced recently that Fiat would most likely be taking a big stake in Chrysler. That would give Fiat an instant new market in the US for it's small cars sold in Europe. Also, it would give Chrysler the small cars it doesn't have. It just might work out for Chrysler...

Fiat Nears Stake in Chrysler That Could Lead to Takeover - WSJ.com
The re-emergence of Fiat in America. Those are one of the few cars that could accomplish the impossible: Make the small Chryslers look reliable (at least in comparison).
Add in Renault and you'd have a trifecta . . .
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