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This economy has slammed the stock market and many of the stocks on the NASDAQ and S&P500 have taken a tremendous hit. Some deserved it, some won't survive and some will recover.

I want names. Names of stocks that are undervalued. Which stocks that are currently under priced that have the ability to regain their value over time.

For instance of the big three General Motors ($3.71), Chrysler (private company) and Ford Motor Company ($2.58) 2 are publicly traded and both may be hurt pretty hard in the coming year but I think that they will both recover with time, I'm picking both of them for 5-10 year holdings. With 10X returns. Ford before GM (I know, :rolleyes: just write it down and see if it happens)

American consumers tend to forgive and forget, they tighten belts for as long as necessary and the first excuse to go back to living the dream they throw away all caution and dive back into the swill like pigs. For instance, gas prices and driving behavior.

With an influx of economic stimuli from the incoming President it will "appear" that we will all have more money in 2009 than we did in 2008 giving the economy a boost in confidence. I'm paying down debt and investing. If you ever wanted to buy stocks, right now there is a garage sale on Wall Street.

What stocks would you suggest at what price and why? - Dale:flag:

I bought a couple hundred shares of Ford, since it appeared the healthiest of the big three. Got it a couple months ago at $1.46. I think it is a crap shoot, but a relatively cheap one.

The conventional wisdom at the moment seems to be to buy sound dividend paying stocks of large companies. Examples might be AT&T, and GE.

In my many years of investing, I think that stock picking is much harder than most folks think. It very easy to get caught up in the search for the bargain, and if you prove to have bought a really good company, you are like to stay too long :-(

Hi Dale:

___My take worth all of $0.015 with a bit of history...

US’ DJIA

Aug. 1929 -- 381
June. 1932 -- 43
Nov. 1954 -- 387

Japanese NIKKEI 225

Spring 1984-- 10,000
Jan 1990 -- 39,000
Jan. 2009 -- 9,080

___The DJIA during the depression was indeed an anomaly given the tools and knowledge the fed and treasury had at the time (let alone congress back then) and the way they were applied. The recovery time however was real.

___There are any number of great companies paying in the 4% range that were paying 2% at twice the price. They seem safe and solid, pay infinitely more than short term treasuries and should double with any recovery. Yet there they sit.

___There are any number of corporate giants that are now “Junk” companies that are not paying a dividend, prospects of doing so remain dim and even with a recovery, and profitability is still in question. That being the strongest US auto manufacturer, Ford.

___During the Explorer craze, F sold for in the mid-30’s through the spring of 99. And it has been falling ever since.

The good...

$12.6 Billion loss in 06 with a bunch of write-offs and such.
$2.7 Billion loss in 07 with a ton of write-offs and such.
$129 Million loss through Sept. 08. This will get a lot worse with the fall off in fall/winter 08 sales.

___It appears to be headed in the right direction with Mulally onboard and with new product (US F-150 and European/Asian Fiesta/Focus are all selling ok given market conditions), it looks to go profitable as soon as the economy comes out of the dive.

___The big question is when will we (the US economy) come out of the dive? Will it be 1 to 2 years or will it be one of those 25 + long year nightmares? The Fed and Treasury are pumping money to levels unprecedented in the history of the “world” and here we are with housing prices still falling, job losses are still increasing and the market (DJIA) is kind of anemic here in the 8,500 to 9,000 range.

___Ford looks good on a speculative play but it is speculative. A lot of very smart and connected people are pricing Ford at what it they believe it is worth today. The same ones we bailed out last year for the most part but they are still far better at this then most of us...

___Personally, Utilities and Energy are my forte’ but hoping for 10% long term yields into the future is a pipe dream just as it is for anybody else in these trying times with a tumultuous future.

___Good Luck

___Wayne

Thanks for the input. I bought 50 shares of GE this week @ $16.20 (currently $16.00) if I had an extra $800 I would buy 50 more next week.

I'm waiting for Ford Motor Co (F) to give their 4th quarter report within the next few weeks possibly causing shares to drop slightly then I'll buy a few hundred shares at 2.00-2.25 hopefully. I'm trying to get some cash up, I'm rolling change, getting overtime, selling on ebay, curbing expenses...not as well as I could but I haven't bought beer in weeks or spent over $7.00 a day on food. Goal is $450 by months end for Ford! It will be a long term investment for me, 5+years or more.

I'm thinking TWX (time warner inc) will be good, when TV goes all digital soon there will have to been some increase in subscribers. Even if only for the short term. It's around $10.08 a share but it will be much higher by 2nd quarter reports/summertime I'm guessing. There are at least 7 million non digital users currently who will have to buy converters (GE hopefully) switch to satellite (pick a provider/manufacturer), get digital cable (TWX) or buy digital TV's (Sharp, Sony, Panasonic etc.)

It's hard to tell what is undervalued when everyone's sales are low. P/E are not the best indicator when earnings throughout the world are sparse.

I'm trying to teach myself to go with companies that I'm familiar with, have capital, produce goods that can be expected to be purchased in a recessive economy and have management skills for bad times (hard to know how that last one will work out). Any ideas on that consideration?

I wish Southwest Wind Power would go public, that is my own little microsoft/google IPO pick when it happens. If some bigger, evil corporation doesn't do something to stifle their success. http://www.windenergy.com/index_wind.htm - Dale

If it wasn't morally wrong to buy futures in oil, (I don't even know how to do it) but I know a $48 barrel will be a $120 barrel again. It doesn't help our economy to give producers and suppliers incentive to hold back tankers for higher prices though. But if high gas prices push US solar/wind infrastructure, I'm thinking bring on the $5.00 a gallon gas. - Dale

I plan on cashing out of some slow movers and Putting the proverbial ''most of my eggs in one basket. Ford, Toyota, and Honda. Most in Ford for a quick 5O to 100 percent.

I too like GE, currently at 16.00 GEN ELECTRIC CO(NYSE: GE)
Then BP, currently at 47.13 BP PLC(NYSE: BP)
Then VLO, currently at 24.00 VALERO ENERGY CP(NYSE: VLO)

I own none at this time, but soon will when they drop just a bit lower.

I'm really liking Intuitive Surgical right now (isrg). Robotic surgery is the way of the future. They really have no competition, enforced by a few hundred patents. The stock is way down right now, I believe more than is justified.

Valero has been disappointing to me. With high oil prices, they get squeezed with slim margins. With low oil prices, they get hammered along with the rest of the oil sector. I still hold my shares, though.

I'm considering some shares of USO - a crude oil fund. It's the most direct way to play the oil market.


*disclaimer: I own shares of ISRG and VLO.

I want to be careful how I say this, I'm obviously no investment genius, but I think some things need to be said. I want to sound a note of caution, based on about 50 years of trying to pick stocks.

While it is true that stocks have on average outperformed other financial assets over the long term, there have been several relatively long periods, say 5 years or more, where "unusual" circumstances dictated significant underperformance on a nominal basis. The two periods that come to mind right away are the 1930-1935 period and the 1972-1978 periods. These periods, particularly the latter, were even longer if inflation were taken into account. So poor returns can happen and can go on for a long time. Obviously, these were "unusual" times, and while it is true that investors in 1929 and 1972 eventually made money, they waited a long time to do so, and many, many did not have the patience to stay the course. Though unproveable, I believe we are again at such an inflection point - this is no usual, garden variety recession.

One only has to listen to the current financial news channels to realize that this is the most significant financial challenge the country has faced since the great depression. We seem to be entering a period of deflation, and that alone is something unknow in most of our lifetimes, including mine. In deflationary environments, stock prices of resource heavy companies are going to fall. That would include oil, below $38 at this moment, metals, land, agricultural products, and the list goes on. Most other non-resource stocks will likely get driven lower as consumer demand dries up. That would include electronics, autos, and a host of descretionary providers. In a deflationary environment, cash becomes king.

It is impossible to say how long this mess goes on and how it evolves or ends. Rampant inflation, like that of the late 70's and early 80's may return, or some other turn may develop. As the police captain used to say on New York Blues, " just be careful out there." The fat lady hasn't even begun to warm up yet ;-)

I hear you loud and clear Jim. I used to invest in beer and women and that rarely paid off and never for the long term. This is going to be a rough time coming for sure. I've got patience and "extra money" for the moment. If it goes bad quick I'll buy gold. Or guns. - Dale

I know it is getting boreing but I want to sound one more cautionary note. Don't make investment decisions on anyone elses recommendations, not even mine - particularly not mine. I know I've mentioned GE, but I just found out yesterday that the GE of today certainly isn't your grandfathers GE ;-( More than 50% of GE earnings last year was from their financial operations. GE may just be as toxic as Citibank. Be careful out there. This market is just a flood of falling knives. Not for the faint of heart!

Absolutely! Do your own research. Anyone's recommendations, even (especially?) "experts', should only be a starting point.

90% of my investments are in passive index funds and bonds. Only 10% is in individual stocks.

It would certainly be better to have had my grandfather's peers running today's companies. With a good moral compass and a sincere interest to create products that are reliable and well made. If stocks keep falling I'll buy more. Eventually I'll control the whole company HaHaHAHAHAHAHAHA!

Thanks for the insight on their capital, research is key. I'll look closer. - Dale

Just a couple of observations:

1) there is very little investment money around to 'flood' in and dramatically raise prices. It's gone. This puts a performance cap on what I can expect the general market over the next 5 years.

2) we seem to now know the large banking survivors, but they are still very broken, with little sign of effective repair. (e.g. the Fed is now proposing to buy their 'toxic' assets). Trust, the cornerstone of banking, remains shaky. We hope the regionals keep holding up.

3) there are no good earnings reports from any sector. It's hard even to find a profitable MNC. Viable companies with (formerly) acceptable levels of debt are now under serious pressure. Lines of credit are dried up (#2).

So, there is no capital and the transport mechanism is still broken. I do not believe that we are yet at Churchill's "beginning of the end."

That leaves most individual stocks, as mentioned by others above, speculative (basically, gambling) - and not 'investment'.

To mitigate risk on the majority, I'm pretty much sticking to CDs, index funds and sector ETFs.

What stunned me into a more conservative investment strategy a few years ago was a comment by a friend who recruits wall st fund managers. He sells people based on their record, and only 1 in 10 can beat the S&P each year. I figure his guys have a bigger brain than I do, went to better schools, work all day long at it and have personally met the players in the companies they invest in. If I can beat 9 out of 10 of them by simply buying and riding a SPDR, then I'm doing OK.

Flatty,
Great post. Another way to consider the current situation and it's effects. I kind of look at the money available from investors as fish in an aquarium, there is a finite number in the tank but sometimes they swarm to something interesting that may be food, a reflection or a hook.

GE is now 14.11, I think I want more. Looks like food. Hard to tell, the water isn't clean yet. - Dale

90% of my investments are in passive index funds and bonds. Only 10% is in individual stocks.

I once believed that index funds were the individual investor's salvation from the low performance of stock picking, but no more. Losses in index funds have been well correlated with losses in the markets - and that was the promise ;-( With the number of thieves, hedge funds, day traders, speculators, government raids on equity and risk transfer artists currently in the market, I don't think there is anywhere to hide from excess risk. The system is broken and equities investments make no sense until we reinstate some sensible regulation. We may well go through something resembling the great depression before the nation gets serious about accountability. There's no trust left!

...I bought 50 shares of GE this week @ $16.20 (currently $16.00) if I had an extra $800 I would buy 50 more next week....

Well GE is now $13.62, I bought 33 more shares for $13.60 earlier today which averages out my holdings at $15.3349 per share with 83 shares. If $16.20 was a good price then $13.60 is better. GE is not for sale, don't ask! Get your own. :D


I'm waiting for Ford Motor Co (F) to give their 4th quarter report within the next few weeks possibly causing shares to drop slightly then I'll buy a few hundred shares at 2.00-2.25 hopefully.

Ford is at $2.12 and I'm still waiting for the 4Q report. Looks like it will go below $2.00 Spent my money on GE gotta get another $450 for Ford this month.



...I'm thinking TWX (time warner inc) will be good, when TV goes all digital soon there will have to been some increase in subscribers. Even if only for the short term. It's around $10.08 a share but it will be much higher by 2nd quarter reports/summertime I'm guessing. There are at least 7 million non digital users currently who will have to buy converters (GE hopefully) switch to satellite (pick a provider/manufacturer), get digital cable (TWX) or buy digital TV's (Sharp, Sony, Panasonic etc.)...

This quoted statement above reveals how much I'm really lost in all of this. I just found out today that Time Warner Inc. (TWX) is splitting with Time Warner Cable (TWC), I didn't realize my mistake of the two companies, so if I had invested with TWX at $9.50 it wouldn't have been the right company. TWC is $18.99 right now. That is the company I should have been watching these last two weeks. :o - Dale

Ford is at $1.80 from Friday's close. This Thursday the 29th, Ford will announce their 4Q earnings, I'm guessing/betting/predicting (technical for dangerous practices) F stock will drop below $1.20 by Friday. I'm liquidating my GE (at a presumed loss from $15.33 per share) stock prior to Friday and purchasing 1200+ shares of F stock.

I'm further more g/b/p that F will in less than ten days time of announcing low 4Q earnings will have a momentary rush for purchases from "late" buyers causing stock price to exceed.....$2.80 This is all conjecture. If this happens I'll sell Ford and repurchase GE at it's lower than $13.00 price.

So it would seem I don't have loss aversion (just learned that about myself) and I am a risk taker (I knew that).

I have faith in people, faith that they will react emotionally rather than analytically to bad news, then faith in others that they will get on the wave slightly late, just enough to overvalue the stock. I'm not really buying/selling stocks I'm betting on human nature. When this little ride is over in the next two weeks I'll have more than my original 83 shares of GE and $382 in cash. Or maybe not. Let's see.

Disclaimer: I know nothing. Don't follow me, you will get lost. I'm dangerous, careless and known to be foolish. But I have some great stories.

I'm not asking for advice on this one. I just see an opportunity forthcoming and I want to put my money where my mouth is for once. I missed the Ebay, Yahoo and Google windows of opportunity when I knew what was going to happen beforehand. - Dale

Hi Dale:

___Depending on how long this recession/depression thing lasts, F might be a great buy. With Chrysler’s failure all but imminent, the Dodge Ram will possibly no longer be available. 350,000 to 450,000 trucks per year disappear off the market. It just so happens, there is the Silverado/Sierra or the F150. The F150 lost 175,000 in sales last year vs. 2007. Do you see the light bulb going off?

___And another. Ford appears to have the best upcoming product.

___Number three. With Ford in the penny stock range, the number of shares that can be held is staggering. Kind of like leveraging without the leverage. The only problem is it is worth what it is worth on the day you purchase and praying for recovery w/out bankruptcy takes on a gamble all its own.

___Good Luck

___Wayne

Wayne,
I was almost scared to read your reply to my last post.:o because I know I'm taking chances. I won't hold all of my Ford stock, I'll sell most in a few weeks to reposition myself with GE but will keep a block of F, my faith in them is lessened for the immediate future (1-2years) as I research more and feel like my money can be more beneficial elsewhere for now.

NTE has great EPS for tech stocks but I don't know enough yet to make a responsible investment. I'm watching and learning.

I hear you clearly about Ford's possibilities, I think that for the next 6 months stock prices will be driven by fears and wishes instead of management and performance. I sincerely hope Ford can correct their troublesome position and come out looking more like Toyota or Honda. That would be a Big Three to look forward to. - Dale

Bought 30 more of GE at $12.31 today, Now I own 113 at an average of $14.59 per share. If I had waited to buy all shares at today's price I would have owned 21 more shares. I'm learning patience at a price. :D

I did some more research and found that F stocks fell to the bottom approximately 10 days after 3Q reports, so it would appear that it took a lot longer for the market to react to the bad news, so I'm holding on purchasing F for another week, it is currently $1.85, I'm waiting for $1.25 or less. Then ten more days later for it to overvalue and sell. Just a hunch. - Dale