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What about Ford now?
Old 01-26-2009, 12:46 PM   #1
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What about Ford now?

I understand that Ford has the best chance of the three to make it through this unscathed, and is least likely to have it's shareholder equity wiped out. Would you consider Ford a buy under $2/share?

I'm debating between buying GE and Ford with my play/testosterone account. I have about $8,700 to play with and it's money I'd hate to but ultimately can afford to lose (i.e, this is not my 401k or my emergency fund etc.). Thoughts?
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Old 01-26-2009, 01:36 PM   #2
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Imagine, a couple of thousand shares of F and half your play account still available! I do understand your temptation. I couldn't resist GM at 6.30 and bought 200 shares. The first individual stock I've bought in 10 years or so.

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Old 01-26-2009, 03:04 PM   #3
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Yes, I think Ford can emerge.
But just because they emerge does not make them a good investment. They still cannot build a car worth $h!t.
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Old 01-26-2009, 03:47 PM   #4
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Having worked with Ford on several financial and quality issues I would think GE is a better alternative.

However if you want to take a flyer on a company I would reccomend MLAB instead. Nice small quickly growing company with real upside that pays a dividend that is growing nicely. 60 million dollar company market cap with nice product line rated very nicely in Value Line small cap and good looking financials from what I viewed this weekend in research. I prefer not to lose any money if possible.
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Old 01-26-2009, 03:55 PM   #5
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As a rule, I don't buy individual stocks, but I bought a little over a thousand shares of Ford on Friday @ $1.86. I'm a car enthusiast, and Ford looks to have some good product coming down the pipeline. Their recent quality scores have improved a lot, and their bread-and-butter vehicle, the F150 pickup truck, has been redesigned and looks like a winner. They've also got a new small car coming (the European Fiesta), a redesigned Taurus, and an updated Mustang that is supposed to be quite a bit better than the last iteration.

I'm not expecting a quick jump in the stock price, but over the long-term, I think they'll rebound significantly. If not, I'm only out a couple of grand.
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Old 01-26-2009, 03:57 PM   #6
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I have no doubt Ford will continue as a company.
However, I have a fair amount of concern that any common stock holders will get wiped out. Given the choice of GE or F, I would go with GE.
Given the choice of F or GM, I would go with F.
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Old 01-26-2009, 05:42 PM   #7
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What about the dividend between the 2 of them. GE is about 9% right now and F is 0.
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Old 01-26-2009, 06:20 PM   #8
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What about the dividend between the 2 of them. GE is about 9% right now and F is 0.
Are really debating which is the better value play now?

One has a failed business model, and one is having a rough patch.......
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Old 01-26-2009, 07:15 PM   #9
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Laurence, if you want to invest in the auto industry, what about auto parts manufacturers? There will be a lot of OLD cars on the road for the next little while.
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Old 01-26-2009, 11:30 PM   #10
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What about the dividend between the 2 of them. GE is about 9% right now and F is 0.
Can someone expand on this? Will they cut this? Did I just ask someone to look into a crystal ball?

If I can get a 9% dividend, I think that just added a lot of clarity to my decision.
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Old 01-27-2009, 01:31 AM   #11
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Laurence, if you want to invest in the auto industry, what about auto parts manufacturers? There will be a lot of OLD cars on the road for the next little while.
Yeah, like tire and battery makers for example.

While the car makers and financial companies get all the press coverage due to the bailouts that they requested, there are so many other companies in other sectors that are also beaten down bad and can survive with no bailouts. The latter group interests me more. I'd rather do my bottom fishing there.

In any event, sprinkle your money around. Nothing hurts more than when the economy recovers, the market is going up but your single choice stock is left in the mud to die. Why buy just one beaten down stock if you can diversify among several?
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Old 01-27-2009, 09:12 AM   #12
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Can someone expand on this? Will they cut this? Did I just ask someone to look into a crystal ball?

If I can get a 9% dividend, I think that just added a lot of clarity to my decision.
GE said that they won't cut the dividend this year but who knows. Bush#1 also said no new taxes so take it with a grain of salt. The dividend is a bit high so I wouldn't doubt if it gets cut but it'll still be better than Ford with 0.

Unless the share price rises I would think a dividend cut is in the cards at some point.
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Old 01-27-2009, 10:53 AM   #13
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Like most of what Berkshire Hathaway has purchased in the last 12 months you can get GE, one of their selections for less than Warren Buffet. At least if it went to zero you'd always have that in your defense. And you'll get a 2.25% refund of your purchase quarterly for a while anyway.
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Old 01-27-2009, 12:37 PM   #14
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I'll take a dividend of half that and be happy.

NW-Bound, I hear ya, but over 90% of my portfolio is in a "4 pillars" alignment, so I won't feel too bad.

Of course, now it's trading above $13, why that seems pricey I don't know but it's thrown water on my "trading" fire.
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Old 01-27-2009, 12:44 PM   #15
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I would think Ford debt would be more interesting than the stock
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Old 01-27-2009, 12:54 PM   #16
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I would think Ford debt would be more interesting than the stock
And who knows? The Ford bondholders of today could be the Ford stockholders of the future. Though that would seem more likely with GM at this point...
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Old 01-27-2009, 04:15 PM   #17
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My idea of an "investment" in ford would be to buy a clapped out Taurus for $400, drive it when I have to take the H-1 freeway and scrap it when it won't go anymore. Rinse, repeat and, oh yes! YMMV
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Old 01-27-2009, 05:39 PM   #18
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According to the balance sheet the total shareholder equity of Ford is a negative -2 billion. Meaning the company is technically insolvent. (GM is in far far worse shape). Or to put it another way each shareholder of Ford owes approximately $1 dollar to the creditors.

In contrast GE has 111 Billion worth of shareholder equity, made 4 billion last quarter and 18 billion last year. The huge unknown for GE is how much of the massive loans that GE capital has outstanding are going to be paid back.
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Old 01-30-2009, 12:43 PM   #19
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In contrast GE has 111 Billion worth of shareholder equity, made 4 billion last quarter and 18 billion last year.
And approximately $100B of that $111B is intangible. So, some would note that is $10B of tangible equity with $550B in debt.
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Old 01-30-2009, 02:04 PM   #20
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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.
How much tangible equity does Ford have?? Are you including brand valuation as tangible equity? I think most folks think the word "GE" denotes higher quality than the blue oval with the "Ford" on it.......
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