JH>The Dem congressers are having fun beating up on the "big 3"
JH>automakers as they private jet into DC with hats in hand begging for
JH>a bailout.  I don't think there is any way the Dems will go for them
JH>going into Chapter 11, but I do know there are quite a few people who
JH>think that would be the best thing for them at this point.

JH>The shareholders have taken a licking on these stocks in the past
JH>year, and right now, they seem a lot like packages of mortgage based
JH>secrities. which have caused so much trouble - - everyone is afraid
JH>of them, and not much of anybody wants to buy them, at any price.

JH>Here's some info, which I looked up at http://finance.yahoo.com - -

JH>                      General Motors(GM) Ford (F)    Toyota Mtr
JH>Share Price Corp(TM) 10 yrs ago    71.50 (10/98)  31.50 (11/98)
JH>Share Price 50.42 (11/98)   5 yrs ago   42.78          13.20
JH>59.57 Per Share 52 Wk High/Lo   29.95/ 1.70    8.79/ 1.01
JH>117.59/ 57.01 5-day Low Price (11/20)   1.73           1.02
JH>59.12 Per Share Close 10/24     3.59           1.56            67.10
JH>Earnings Per Share       -38.74         -5.21            8.43
JH>Market Capitalization     2.19 Bln       3.73 Bln        105 Bln

JH>Seems a bit funny the number of billions of dollars the politicians
JH>are willing to throw their way, compared to their current market
JH>capitalization.  Based on the close of market yesterday, all the
JH>common stock of both GM and Ford was worth under $6 Bln.  And the
JH>Pols already were willing to put up $25 bln to fund retooling for new
JH>energy-saving models, and the companies are wanting another $25 bln
JH>in low-interest loans to get them over their short-term cash
JH>shortfalls.

JH>With Ford stock so cheap, I might be tempted to buy 1000 shares or
JH>so, just for a gamble - - _if_ I thought I could see any way for them
JH>to return to being a healthy business.

JH>Comments welcome.

What you're saying here is that the government is proposing to loan them 
more money than they are worth today.  You could buy them cheaper than 
that, which is often what folks like Warren Buffet and similar do.  It's 
easier/cheaper just to buy them outright, take them private and pocket 
the profits.  

I don't think I'd look at market cap to determine whether to invest.  
Cash is king so I'd look at cashflow.  Many experts recommend the 
discounted cashflow analysis.  In this case with the US automakers all 
being negative, that would be an ugly analysis.  

Looking strictly at GM their Operating income (before taxes and other 
charges) have been:

1998    $11.5B
1999    $16.8B
2000    $16.7B
2001    $10.1B
2002    $9.8B
2003    $12.4B
2004    $13.1B
2005    ($1.1B)
2006    ($7.6B)
2007    ($4.4B)

And the trailing 12 months earnings are ($16.8B).  Not a pretty picture.  
The good news is that you can pickup GM shares ar a low price, $3.56 or 
$3,560 for 1,000 shares.  Whether that is cheap or not remains to be 
seen.  I owned GM a long time ago but sold it off.  

If you are willing to gamble a little, it might be worth a short term 
investment to see if the government's intervention bumps the share 
price.  Once it does, I'd be a seller until I had evidence that GM was 
really able to turn their business model around.  

Of the two, Ford and GM, I'd be more interested in Ford. It appears they 
have completed they are further ahead with retooling and more fuel 
efficient vehicles, although that is no longer a near term issue when 
gasoline is selling for $1.70/gal.  Another concern I have is what Obama 
and the greenies will do to the auto industry with their climate change 
policies.  While there is no evidence of this event, they are using junk 
science in an attempt to destroy the modern world. 


Jeff   

CMPQwk 1.42-21 9999 
Progressive taxation is slavery for those who succeed .....


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