Would You Invest In Ford?

I could have posed this question on any one of our three (maybe more?) Wall Street/Meltdown/Stock Watch threads, but I thought I'd get more feedback here.

I'm looking at how shitty everything has turned. And I have a tie to the auto industry.

I saw today that Ford is trading at $1.79 a share. Here's my thinking:

They are the only one of the Detroit Three to not ask for bailout money. They have the No. 1 selling truck (if I'm not mistaken). They are going to shed some brands. And, if Chrysler or GM or both go belly up, wouldn't they take over at least some of the market share?

Can I really go wrong buying $100 in shares of Ford? I mean, let's say I do and it hits its 52-week high of $8.79. I'd make about $700. I can't see why I shouldn't do this.

 

Hell, if you've got $100 to spare, go for it. They seem like the least likely of the big three to go belly up at this point.

 

That's what I was thinking. And if one or two do go out of business someone has to pick up the market share at some point, right? Even if that's 10 years from now.

 

Pardon my ignorance, but how do you go about "buying 100 shares of Ford"? What site would you use, and are there fees/minimums involved?

 

I drive a Ford, it's the best car I've ever driven, and even better than its reliability, their service is really good. They are on top of things. I called them to schedule my 95K service and found out it was about $1,000 and balked. This week, got a letter from the service department offering a significant cut in the cost.
Still might wait on it, but from a consumer standpoint, they seem to have their crap together.

 

Ford stock usually hovered around 9-12 bucks a share -- or it did before President Stupid sent us into the recession. GM has gone from about 25 to less than Ford.
If you're going to go, go Ford....

 

1. If you buy $100 worth, or even 100 shares, then you're not getting yourself into too much of a pickle if it never recovers. Playing the stock market, particularly the way you're talking about, is a lot like hitting the blackjack tables in Vegas. It might work, and it might not. Just be prepared that you absolutely could lose every cent you put into it, and if you can't handle the idea of losing it all, spare yourself the misery and the maddening habit of checking the numbers every half hour.

Let me just tell you that, in the short run, Ford is not going to hit the 52-week high. It might, yes, in three years or whenever the economy recovers. But not any time soon. Ford's stock, as well as most other stocks, are low for a reason. It's because the American consumer's faith in the companies, and their values, is painfully low. That faith is not going to shoot back up in the short run, and that's what you'll have to remember. I have bought stock in companies during the last six months that I hope will recover, but we obviously haven't hit bottom yet. To that end, again, be prepared to see your $100 turn quickly into $70 or $30 or $15 in about a week or two. I'm still confident my investments will eventually pay off, but it's going to take patience. Lots of it. I've watched a $580 single-stock investment turn into $60 in the last four months. That's a kick in the gut, brother.

2. Try Sharebuilder.com. It's a unit of ING Direct, and its commissions are the cheapest without having to guarantee at least $5,000 in initial deposits. Ameritrade and the like have those requirements but do technically have cheaper commissions. Sharebuilder's commission is $9.99 per trade without any minimum deposit. With that in mind, know that to buy and later sell, say, Ford stock, you'll at least pay $20 just for the opportunity to gamble. It also charges penalties for quick turnaround purchases in order to discourage day trading. It's like a bank; they want your money for a long time.

Now, the smarter play long-term is to use Sharebuilder's automatic draft feature. You identify the stocks you like, one of them or a thousand different ones, and assign a dollar amount to be invested at a regular frequency. You'll need to sync Sharebuilder to your bank or make certain you've transferred money into your investing account before your investing day -- mine is the first and third Tuesday of each month -- and it'll automatically buy the amount of stock, even fractions of stocks, that your pre-assigned money can buy. And the best part is that it's free (although I think there's some subscription fee after a three-month trial or some such; still, it's a good deal to pay no commission).

Ford probably isn't a bad buy at this point. A better buy is Goodyear Tires; rubber ain't going anywhere, regardless of which auto companies go under. Regardless of what you buy, assuming you put some thought into it, it's a great time to buy stocks.

 

Lots of way-oversold bargains out there, and not just limited to the auto market. But that's a good place to start.

Don't limit yourself to looking at just the Dow or just the S&P. And a few hundred dollars won't break you.

 

My dad bought some shares of Ford back in 2000.

I think he gave around 7 dollars a share.

Someone said it earlier; Of the automaker to buy, Ford is the one.

 

I loved the hell out of my Ford Probe.. I think that there's virtually no risk associated with sinking $100 into this....unless, you know, you're doing that in lieu of eating.

 

Ford might be the best American car maker to buy, but that's not saying much. If GM and Chrysler enter bankruptcy that will also severely impact Ford because all three share suppliers.

 

Michael, why Goodyear over Michelin or Bridgestone?