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The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

LynahFan said:
To recoup their initial $1.2B investment, therefore, they'd have to sell 80,000 cars. They've sold 13,000 so far this year, which would scale to 17,000 for the year. So their break even point would be 5 years out - assuming that they aren't paying interest on their initial investment (which of course they are) and assuming that they don't spend another dime on R&D or marketing in the next 5 years (which of course they will) and assuming that sales don't fall off due to better competitors on the market (which there already are and definitely will be). Also, their sales are only what they are because of the sweetheart lease deals they've been giving, so there's no way that their margin is $15k on the ones they're producing now, pushing their break-even that much farther down the road. The farther out that gets, the more they're going to have to spend on tech refresh and re-design, so they're going to be chasing their tail on this for years and years to come - I would be shocked (no pun intended) if the Volt ever breaks even, much less gets anywhere near a respectable profit margin.
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I think what this ignores is the R&D benefits of developing the Volt will pay off for them in all the other cars they produce down the line. Any time you go away from just re-styling an existing design year after year (the way car companies have been working more or less for 80 years) you get enormous start-up costs. They don't seem to "pay off" if you assume you would hold the same market share by just doing the same old thing forever. But the whole reason they started to innovate is that they could not just extrapolate into the future. Auto companies would have clung on to the same old design if they possibly could have. They've done it before.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

geezer said:
What I meant is that designing a car is in no way at all comparable to drilling an oil well, in terms of initial investment and future returns. It needs to be profitable right away.
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Except that you can't look at much of that R&D investment just in terms of the first generation Volt, but at ALL future GM cars that use any of the hybrid technologies that were pioneered in the Volt. R&D expenditures of this nature are not spending that applies to one single model, but to a whole new category of automobiles. I'm sure that R&D spending on new features are not profitable in the first year, but once they become much more wide-spread and standard that they recover the cost over the life of that feature.

Hybrid cars are very similar to flat panel TVs, they are very similar to existing items but a comprised of significantly new technologies and materials. I doubt that any company recovered all of the R&D expenditures on the first generation of TVs that they produced but over time that R&D has more than paid for itself. The same thing will happen with hybrid and electric cars.

The article makes it clear that ONLY Toyota (and that has happened only recently) has a hybrid/electric car model that is anywhere near individually profitable, yet nearly every major automaker has a hybrid/electric car program of some type.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

FlagDUDE08 said:
http://blogs.wsj.com/economics/2012/09/13/live-blog-fed-decision-and-bernanke-press-conference-2/

It's official, the Federal Reserve has announced QE3. In addition, it has not announced a firm end to how long QE3 will last, meaning the country has a possibility of undergoing hyper-inflation.

The stock market surged at that news, and then pulled back.
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Bernanke's trying to save his job. New money has been propping up the stock market, which is good for Obama heading into the election, which is good for Bernanke. If Romney is elected, Bernanke is afraid he'll lose his job.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Bill said:
Bernanke's trying to save his job. New money has been propping up the stock market, which is good for Obama heading into the election, which is good for Bernanke. If Romney is elected, Bernanke is afraid he'll lose his job.
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Unless the Fed has internal impeachment rules, that wouldn't happen until 2014 with Senate approval (I HIGHLY doubt Obama's executive order will stand), and even then, Bernanke would only be able to get either 1 or 2 more terms; I can't remember what year he started, but you're only allowed 14 years in the Federal Reserve system with the ability to finish a 4-year term.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

FlagDUDE08 said:
Unless the Fed has internal impeachment rules, that wouldn't happen until 2014 with Senate approval (I HIGHLY doubt Obama's executive order will stand), and even then, Bernanke would only be able to get either 1 or 2 more terms; I can't remember what year he started, but you're only allowed 14 years in the Federal Reserve system with the ability to finish a 4-year term.
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2014 isn't that far away.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Dow passes 13500. Not far from our all time high. We'll see if it holds, but the markets are happy.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

The problem with the Volt is that we need to upgrade our electric grid first. And we need to figure out a way to make the batteries last longer. Up here in Minnesota, the car has an effective range of something like 15 miles when the heat is on. So not only is it going to get stuck in the snow, the battery won't even get you to work. Congrats GM for producing a car that no one north of the Mason-Dixon can use.

At least when you're stuck in the snow without heat you can stay warm...

I'm such a filthy corporate whore.
 
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Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

5mn_Major said:
Dow passes 13500. Not far from our all time high. We'll see if it holds, but the markets are happy.
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It will go higher, now that there's more inflation. If you were to consider the 1999 value of the dollar, we'd probably be at about 2000 right now.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

dxmnkd316 said:
The problem with the Volt is that we need to upgrade our electric grid first. And we need to figure out a way to make the batteries last longer. Up here in Minnesota, the car has an effective range of something like 15 miles when the heat is on. So not only is it going to get stuck in the snow, the battery won't even get you to work. Congrats GM for producing a car that no one north of the Mason-Dixon can use.

At least when you're stuck in the snow without heat you can stay warm...

I'm such a filthy corporate whore.
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There's nothing wrong with your whited out text. ;) However, you certainly have a point about cold weather and tons of snow/ice, and is why I still drive SUVs. Granted, your area is fairly flat, too.

In speaking of 3M, fairly steady price, decent yield around the rate of inflation, strong balance sheet (although I'm not too thrilled with the recent obtainment of new long-term debt), but they're doing better with cash this year than last. I probably won't invest myself, but it looks good.

One thing to remember that, with inflation from Fed action like the action made yesterday, you'll see commodities prices shoot up. I know SCCO has been kicking rear for me, but that bubble will burst once there is some change in monetary policy, so be sure to pay attention. As always, if you can figure out how the market works and the best ways to make money, the stock market is the place to be to gain wealth value.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

Except these bonds were issued at a record low rate (at the time). I think they took a calculated gamble, got a spectacular rate, and it will probably pay off in the long run. Especially when all of us know inflationary pressure will return, eventually, with all this quantitative easing.

I like 3M as a long-term play. One of the best dividend record of any stock (if not THE best). They have solid growth, albeit very slow growth. And they are ridiculously diverse which helps them when bubbles burst. One of the six businesses within the company have a bad year? Not to worry. There are five other businesses that should be fine.

Edit: And while on the whole our area is flat, there are areas where there are hills such as St Paul. Hills that can definitely give most cars a good test in the winter. They don't have to be big hills to cause the same amount of problems. Once you get going you should be fine.
 
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Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

dxmnkd316 said:
Except these bonds were issued at a record low rate (at the time). I think they took a calculated gamble, got a spectacular rate, and it will probably pay off in the long run. Especially when all of us know inflationary pressure will return, eventually, with all this quantitative easing.

I like 3M as a long-term play. One of the best dividend record of any stock (if not THE best). They have solid growth, albeit very slow growth. And they are ridiculously diverse which helps them when bubbles burst. One of the six businesses within the company have a bad year? Not to worry. There are five other businesses that should be fine.

Edit: And while on the whole our area is flat, there are areas where there are hills such as St Paul. Hills that can definitely give most cars a good test in the winter. They don't have to be big hills to cause the same amount of problems. Once you get going you should be fine.
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I'm not sure about the best; I would consider a comparison against DuPont, who has been paying dividends every quarter since before the Great Depression.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

As far as I can tell, they have increased their dividend 56 straight years and paid dividends since 1891. So I'll give them the title of dividend king.

I just don't like them as a stock in general though. I see them as an equivalent to 3M if 3M only sold Post-It Notes and sandpaper. 3M has innovation and new great products. What's the last great product P&G released?
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

FlagDUDE08 said:
Did you even look at the site I gave you? A quarterly dividend at 56 cents to the share each quarter, that equates to $2.24 per year. At the current prince of $69.16, that is 3.2388664% dividend payment each year.
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That's not what I'm questioning. I'm questioning the rest of the post. Duh.
 
Re: The Stock Market thread: BUY! BUY! BUY! Sell, sell, sell...

FlagDUDE08 said:
It will go higher, now that there's more inflation. If you were to consider the 1999 value of the dollar, we'd probably be at about 2000 right now.
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Correct me if I'm wrong.

Money supply is up and that will push the market. But that doesn't mean inflation is up.
 
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