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Varchild2008 (85.67)

We are still at the near beginning of an....AUTO BUBBLE

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April 26, 2010 – Comments (4) | RELATED TICKERS: F

Thanks mostly to FORD for FORD's success.... Guess what I just read today?

Ford Motor Company adds 13 companys to its list of Key Suppliers.

hmm...When your cars are built with more technology than ever before and production + sales are up then likewise....you'll need more suppliers and technological expertise to support all of that.

This ladies and gentleman... is why I have to point out that perhaps the best performing sector since the market bottomed in march is the automotive sector!

You have GOODYEAR that skyrocketed in 2009....
You have Auto Parts Suppliers like AMERICAN AXLE that took off like a rocket.

FORD was THE best performing large cap in 2009.....

Harley Davidson is skyrocketing

TATA MOTORS ?  Up Up and Awaaaaaaaaay!!!!

The list goes on.... Sure many other sectors have seen stocks go up big like the Financials, Restaurants, Consumer Staples, and so on....  Appliances?  Whirlpool anyone???

But folks.....  I dare you to find a sector outperforming the AUTOMOTIVE SECTOR....

And it all boils down to this....  Are we in a BUBBLE??? an AUTO-BUBBLE?   Cause the day FORD reports a Quarterly Loss could very well be a Scary Frightening Day for the Stock Market.

BEARS looking for something to trigger a massive market correction to the downside need only look at the Automotive Sector....    The Auto-Bubble.....If people aren't buying cars....There's a reason for that.

GREAT DEPRESSION????    What was the first sector to take a big hit in 1930s???  CARS!!!

CARS stop selling.....fuel demand declines big.....homes stop selling next....and then you have consumer staples, financials, consumer cyclicals and so on falling off a cliff....  It all starts and ends with the CARS!! <----

So....want to predict the next 2007 beginning of a market correction / nasty recession???
Just ask yourself....hmm....How's FORD doing?

4 Comments – Post Your Own

#1) On April 26, 2010 at 4:31 PM, Varchild2008 (85.67) wrote:

Don't Forget Folks...Varchild was there watching Television when Nuecor's C.E.O. said the one sector of his business doing really well and gaining momentum was the Sheet Metal needed for CARS!!!

The Automotive Sector was Nuecor's C.E.O.s only current hope for this economy.

So.. Commodities sorta hinge on supply/demand of automobiles.

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#2) On April 26, 2010 at 4:50 PM, blueberrygoo (74.66) wrote:

As they used to say...  "As GM goes, so goes the nation".  Just switch Ford in place of GM.

Let's not forget that Ford still has a lot of long term debt to pay back that GM was able to wash its hands of.  They have a decent cash reserve but if the economy goes back in the tank it'll be interesting to see how long Ford (and the "new" GM for that matter) can hold on.

I think Mulally has got a good strategy in that he is trying to reduce Ford's supply base so they can consolidate and get leverage on part prices. 

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#3) On April 26, 2010 at 5:00 PM, Varchild2008 (85.67) wrote:

GM washed its hands of debt?  Noooooooooooooooooooooooooo

Noooooooooooooooooooooooooo

Noooooooooooooooooooooooooo

Last I checked GM is in billions and billions of dollars of debt in the from of a Taxpayer funded TARP loan.

The 8.1 billion dollar payoff of the loan used taxpayer TARP money and essentially was meaningless.... 

Operating Earnings haven't washed away any of the debt to speak of.... maybe 13% was eliminated out of using some TARP cash....  But...that still leaves GM with close to $50 billion worth of debt.

I'll keep banging this drum as people keep saying GM has no debt.  Cause this NO DEBT business can't be further from the truth even if you had Pinnochio as GM's c.e.o.

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#4) On April 27, 2010 at 9:20 AM, blueberrygoo (74.66) wrote:

GM has been socialized / nationalized.  The remaining $50B of debt is now US Government ownership.  Of course we the American people will profit huge when the GM IPO comes and all the crazy investors snatch up that GM stock.  The investment savvy US government then sells off their share for a huge profit and the $50B is probably $150B in green backs.  It's pure genius!  (yes i'm being sarcastic)

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