I was recently at a birthday party for my wife's cousin's son. It's a pretty large group (30+), and so usually a line is formed to the food at serving time. On my way to pick up my plate, I happened to notice on one of the shelves a box with that unmistakable blue-oval Ford logo on it. Then, written in black magic marker the words, "Toilet tank parts." Pointing to the box I shouted out to the host, who also happens to be a Chevy man, "Are you trying to say something there?" To which he simply responded, "Yep."
Everyone's got their favorite Ford jokes, don't they?
Of course you'll note that I said back in March that I thought, not only was it time to buy a Ford car, it was time to buy the stock as well. And if you've been keeping track of the company's stock, it has done everything to prove my point so far. Just last November the stock was trading at a dismal $1.01 per share and seemed doomed for sure to fail miserably with the rest of the whole lot of American auto companies. The mere thought of it made me nauseous, considering I had been a shareholder for several years. I'd lost a sizeable portion of my investment, and more than once I considered just cutting my losses and being done with it. I did exactly that when my Krispy Kreme stock tanked. I did it again when my stake in Blockbuster Video went south.
Still, I saw upside. Ford Motor Company in my view would be able to weather the storm. They were making decisions to consolidate long before anyone else was, shedding Land Rover and Jaguar. They were ramping down production and making cuts, and they still owned the market with the best-selling truck in America. And so instead of selling, I decided to simply average down.
By August of this year, bolstered by a $700 payment protection plan as unemployment steadily rose, and then by the CARS deal, or Cash for Clunkers, and most importantly as a result of the company's stellar management performance and remarkable negotiations with the UAW, all of which were factors which allowed the company to say "Thanks, but no thanks," to President Obama's bailout offerings, the stock had gained as much as 780%. I took my profits back in September, mainly because I felt that the stock was becoming a little overbought.
My thinking is that, while I am not at all dissatisfied with my decision to take profits, my decision may well have been a bit premature. Ford is still the most attractive of all the US automakers. They have a great line of cars and those cars are getting good performance marks. And I think the Fiesta will provide a significant boost to Ford's compact car sales, especially considering oil prices are seemingly back on the way up again. The company and its line of cars are solid.
So, I'm presently considering reentering my position in Ford stock. I'm not exactly a buyer yet, but if the stock breaks $9 a share, that's definitely when I think it's time to get back in.
And what about that box of toilet tank parts? I think Ford will definitely outlast the toilet.
Jim Bauer does not currently own any shares in Ford Motor Company. Also, you can get email updates to this blog by sending an email to firstname.lastname@example.org and putting "SUBSCRIBE" in the subject line.
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