UnThreaded | Threaded | Whole Thread (36) | Ignore Thread Prev | Next
Author: imdajunkman Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35345  
Subject: Re: Bond study Project; selecting a company Date: 8/31/2006 11:31 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Paul,

How broadly would you define "auto industry"? Only the major manufacturers like Ford, GM, Toyota? What about their financing units? (Though GM and GMAC are tied together, they represent diffent problems.) Would you include auto dealers, some of whom I know are publicly traded, but I don't know the extent of their bond issuance. What about the two major tire companies: Goodyear and Cooper (both of whose bonds I own)? What about the auto parts stores? A month or so ago, AutoZone's bonds were offering a fat yield, and Pep Boys comes in and out of favor with Wall Street (and I made money on their bonds, too.)

It seems to me there's a couple things crucial to understanding the auto industry: interest rates and commodity prices, especially oil and steel. In that sense, the auto industry is a secondary player to larger forces. If housing does the downturn everyone seems to be expecting, a lot of cars are going to get repo'd. Finding a publicly traded repo company might be a good play on the auto industry.

Also, if the auto industry is thought of as transportation, not just a consumer vanity purchase, then rails, air freight, and shipping should also be looked at, and the yields on some of the shipping stocks are atronomically high the last time I looked, which presents an interesting problem of whether to go with the bonds or the stock.

Charlie
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (36) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement