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Car Wars: And the Winner Is ...

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October 02, 2009 – Comments (5)

Ford and Japan. After cash for whatever expired, I was very curious to find out what effect it would have on car sales. I was quite surprised. Ford and Japan sales declined 5-10%; no surprise. However, GM and Chrysler dropped a whopping 40%. Guess which companies my money is on for long term survival?

 

5 Comments – Post Your Own

#1) On October 02, 2009 at 10:58 PM, ChrisGraley (30.03) wrote:

You are missing a key piece of the puzzle. A decrease in sales isn't a win for anybody. Perhaps the Japanese companies with less debt can handle it a bit longer, but companies losing money still need revenue growth.

It's like saying that 1 patient losing blood only passed out for a few minutes, while 2 others passed out for a half hour. While the 2 critical patients may die first, everybody is still hemoraging.

I would not buy any automaker until I see signs of life. While I honestly believe that Ford and Japan will live through this, I would wait until they get released from the hospital before I would plan the next birthday party.

GM and Chrysler are now owned by the government and will get a few pacemakers for free and India and China have a few patients that just passed their physical with flying colors.

Not too mention that there is the threat of a huge amount of bears that live right outside the hospital and could start the bleeding all over again.

Why buy less likely to fail when you can buy most likely to succeed in another sector?

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#2) On October 02, 2009 at 11:01 PM, outoffocus (23.12) wrote:

Besides, I thought the winner was Korea. From what I heard the only car company that had an increase in sales was Hyundai.

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#3) On October 02, 2009 at 11:31 PM, ChrisGraley (30.03) wrote:

I just bought Hyundai in real life outoffocus.

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#4) On October 03, 2009 at 2:11 AM, checklist34 (99.72) wrote:

having bought 8 GM vehicles new in my life i must say there is only 1 more new GM purchase planned.  And thats that.

after that i'll buy ford.  screw the union and their policial connections setting them up with a sweetheart chrysler and GM deal, screw that, screw that, screw that.  I am done with GM, done.  Unless the union apologizes and gives back.

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#5) On October 03, 2009 at 6:56 AM, FreeMarkets (97.55) wrote:

ChrisGraley - not sure if I should speak for jerryguru69, but I don't think he was saying he would invest in any car company - just which one's he will bet on for survival.

The government really through a wrench into my plans for investing in Ford.  Had they stayed out of the car business (and let GM/Chrysler fail) I was going to risk a large portion of my savings into Ford stock.  But because 25% of the market share still survives, I'm not confident that Ford can make it through this mess without a bailout (and thus making the common stock virtually worthless).  So I put the money into a Vanguard emerging market ETF.

That's the hidden effect of gov't programs, the unintended consequences.  In fact, this makes for an interesting blog.

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