GM, Ford, and Chrysler Merry Christmas

by John Dalt

12/23/08

We are working on the web site.  Watching the market, drip, drip, d…rip.  Stocks struggled along on half volume.  Up 50 down 130, I thought we would have a little more volatility today, but it was not to be.  Oil, gold, silver, and most stocks sold off.  I have been thinking about Ford.  As a contrarian, are they a good play?  If GM and Chrysler go dark, that leaves a big hole for Ford and other companies to fill.  I need to think about this, and do some research, but I wonder.  Toyota has been on the short seller lists for a while because of slowing auto sales, but their stock is holding up pretty well.  I do not want to be on the team that is going against the government’s team, but GM and Chrysler are broken.  Unless the government forces the unions to give up their gold plated employment and retirement plans.  Barney Frank’s cousin is not going to be able to fix them, or any other lackey the government puts in to run them.  Toyota announced their only operating loss in history, and the President is retiring.  They say it is unrelated, but it is refreshing to see someone take responsibility.  It seems our society does not want to be punitive on anyone anymore.  We have gone from a nation of people that pull themselves up by their bootstraps to a mob that wants government to take care of us.  Rick Waggoner has been at GM for years, they have not made money in over seven years, and he gets bonuses.  Where was the board?  It sounds like go along, get along.  

Bernie Madoof claimed his first victim; the head of a fund tied to him let his depression overtake his will to live.  Maybe that is taking the responsibility deal a little too far.  If you are crying about some of your losses be glad you do not own Avis (CAR), they are down from a high of $18 to close today at $0.75.  This is after they were up off the mat at $0.38.  They announced refinancing of their debt today and gained 33%.  This reinforces the point, be sure the companies you invest in do not need to either renew or find additional financing.  The future looks bleak for companies that are capital intensive and do not generate internal cash flow. 

No more letters this week, I don’t want to write ‘em, and you don’t want to read ‘em.  We will trade a little then spend time with the kids.  Have a Merry Christmas, I’ll be back Monday. 

WARNING:    The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future. 

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