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Ford Motor Co.

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-$3.03 -21.15%
September Watchlist Update
I have reviewed my watchlist and updated my potential Birthday Buys for the month of September. As we move closer to January, I am getting more clarity into what I will be buying.
Looking at both portfolios right now, the most intriguing additions are in my Roth IRA. The top rated holdings in my Taxable watchlist are all industrials type companies ($DE, $F, $CAT, and $DMLP). Seeing that I already have Industrials exposure in that account through $CARR, making another Industrials addition would only further clutter and dilute my portfolio.
In my Roth IRA, I have a number of very strong potential buys with $OZK, $RICK, $CAH and $LMT topping the list. As I have said before, I do not like to be influenced by share price, but with Merrill Edge not offering fractional shares, $LMT might be priced out for me in the short term.
Here is my updated watchlist for both accounts and changes that were made:

Taxable
Removed:
$PENN - Has dropped to a 4/6 on my Scorecard. $RICK has moved ahead of it at a 4.5/6. I have existing exposure in Sin Stocks, so I want to be certain with any new additions.
Added: None
Roth IRA
Removed:
$REGN - Dropped to a 4.5/6 on my Scorecard. $CAH is a higher ranked Healthcare company at a 5.5/6 on the Scorecard and will be my Healthcare focus.
Added:
$WM - Its back! After being removed in August, $WM has climbed up to tie $AY as Utilities options at 5/6 rankings.
$TPR - Surprised to see this climb up to a 5/6. Have been tracking for a while after learning about its brands. Will continue to track.
Would like to hear any of your thoughts on the companies mentioned to help add to my research on these positions.
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My August Returns Are In!... And The Good Trend Continues
Retirement Portfolio
In August, I opened two new positions in $NET and $PCOR. I added to three times to $MKL , $TYL, $MCD, and $WM as part of my 401k DCA and added to no other positions. Another relatively quiet month. I also added to $JPM, $AAPL, $SBNY, $COST, $O, and $SBUX via DRIP. I exited $MTCH and sold 32% of my shares in $BMBL.

My retirement portfolio was down 2.54% in August but that was less than my benchmark SPY portfolio (down 4.41%) and benchmark QQQ portfolio (4.51%). I'm now down 37.40% YTD compared to my SPY benchmark at 16.52% and QQQ benchmark at 21.72%.

My best performing retirement positions YTD:
  • $SWAV is up 96% YTD
  • $EGIO is up 17% YTD
  • $WM is up 14% since I started buying a couple months ago

My best performing retirement positions in August:

My top 10 positions now make up ~35% of my portfolio. The top 6 remain in the same order of $MELI, $AAPL, $AMZN, $F, $GOOGL, and $SHOP. $SWAV jumped up from 9th to 7th after a great month with great earnings with $NVEE, $SIVB, and $COST rounding out the top 10.

Looking forward to September, I'm contemplating exiting my $SQ position. I'm turned off by Jack's comments and his insistence on $BTC.X being the be all and end all. I don't mind the crypto exposure but the Bitcoin only hardline is narrow-minded in my opinion. If you made me czar, I'd actually just have Square exit their crypto entirely and focus on what they're good at.

I'm also considering exiting $MMM in my 401k and replacing it with one of $ABBV, $BEP, $DEA, $HSY, $MKC, $MTN, $TGT, $TROX, $UNP, or $UPS but I need to research them first before deciding.

Taxable Portfolio
In August, I only added to $DT. No positions in this brokerage pay a dividend so there was no DRIP and I did not exit any positions.

My taxable portfolio had a second great bounce back month, up 9.56% after being up 13/67% in July. My benchmark SPY portfolio was down 3.64% and my benchmark QQQ portfolio was down 4.18%. I'm now down 30.15% YTD compared to my SPY benchmark at 14.84% and QQQ benchmark at 21.43%.

My best performing taxable positions YTD:
  • $TMDX is up 172% YTD for me. Wowsers.

  • $MSP with a 39.49% return YTD - RIP as is had such a great return because it was acquired.

  • That's it. None of my other 14 positions are positive. Whomp whomp.

My best performing taxable positions in August:

My top 10 positions continue to make up ~90% of my portfolio as I only have 14 positions in this brokerage. The top 10 remains basically the same with $SNOW, $TMDX, $ATZAF, $SILK, $DT, $LMND, $NCNO, $CPNG, $OM, and $BIGC.

Looking forward to September, I already added to $ATZAF as my monthly add. I don't expect to make any other moves but we shall see.
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$F undervalued?
One of the main reasons why I decided to invest in $F is because I started to notice a lot of new Broncos in my neighborhood as well as a few Mach-Es. It's clear that Ford is doing a great job of creating a car lineup that people like, so it makes sense to me to bet on its future and profit from it.

This article from Yahoo Finance decided to crunch the numbers to determine whether or not it's undervalued, and according to their calculations... it is!

"Compared to the current share price of US$15.9, the company appears quite undervalued at a 36% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent."

It's important to note that this is based on 2 assumptions: the discount rate and cash flows. I mentioned what I thought about their current car lineup at the beginning because if people like their cars, then people will buy them, and likely their cash will continue to ~flow~. It was recently announced that prices for the Mach-E are increasing due to a rise in material costs.

While Ford's sales fell 6.8% to 1.9 million cars last year, "A big part of Ford’s EV story is the Mustang Mach-E EV. The Dearborn, Michigan, carmaker sold 27,140 of these electric vehicles, topping the 24,828 sales total of GM’s Chevrolet Bolt EV models and one Hummer EV in 2021."

Ford has been around for a loooooong time, and it's likely it's not going away anytime soon, especially with their current car lineup.

Are you bullish or bearish?
Also seeing a ton more Mach-Es and the people I talk to who have them are as excited about them as the people who bought Tesla's 2-3 years ago. Definitely a 'Peter Lynch' indicator.
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The underrated aspect of the F-150 Lightning
While every other EV model on the road was built and designed from scratch, Ford $F doesn't have to do that with the F-150 Lightning.

Nearly all of the parts that will go in an F-150 Lightning will be the same as a gas-powered and a hybrid F-150. That means that Ford doesn't have to make many changes to how it plans on producing the vehicle. Also, Ford benefits from the savings that come with already having to order those parts in bulk.

These cost savings that come with simply changing a high-volume sales vehicle from gas to electric will allow Ford to reap profits instantly from the release of the F-150 Lightning.

And with the recently approved Inflation Reduction Act, Ford is flexing its pricing power by raising the price of its F-150 Lightning.

Overall, I think that investors should expect Ford to see its profits surge as it begins its deliveries on the highly anticipated F-150 Lightning.
Is the Current State of Affairs Good for the Auto Industry?
After a failure of the transmission control module in my wife's 2014 Ford Focus and an "indefinite lead time" of the replacement part, my wife and I went car shopping this past weekend.

After visiting a number of dealerships and different manufacturers, we found that inventories are still a game of chance. Placing an order for a new vehicle only reserves your spot for a manufacture date weeks to months out.

Much of the current operations are due to the ongoing chip shortage, but there are some other interesting notes:

  • Car manufacturers ($F, $GM, $HMC, $TM, etc) are still manufacturing as close to capacity as possible
  • Suppliers are still operating at full capacity (plastics, coatings, materials, etc)
  • Every car rolling off the line is most likely already claimed
  • Dealers/manufacturers don't need to offer incentives or mark up prices to cover overhead and inventory costs
  • MSRP is the new standard purchase price

We got lucky and there was a 2022 Honda Passport on the lot (had been there for 2 days) that we test drove, loved, and were able to buy.

So what do you think? Is this "made to order" manufacturing a good change in operations for the industry? Or once raw materials (chips) supplies catch up, things go back to normal?

Next question is how long until we can find the replacement part (chip dependent) for the old car and get it sold?
Is the current "made to order" operations of the auto industry a positive?
30%Good for the industry
40%Only temporary/Doesn't matter
30%Bad for the industry
10 VotesPoll ended on: 08/19/22
This is one of those things I chuck into my 'too hard' pile. My approach biases me, but the industry has simply never looked attractive to me historically. Even if right now is a 'good time', the cyclical aspect makes it much harder to figure out for how long that will persist. I can't help but think there are far easier ways to make a buck.
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Can we all admit that without YouTubers pointing out the “defects” in Tesla’s manufacturing, most of the issues would go unnoticed. None of us ever checked panel gaps or paint depth on our Fords, Hondas, or Toyotas.

Disclaimer: I own shares of $TSLA & $F
Agree— and at the same time it represents a march forward in consumer demands / standards. A lot of what makes a product desirable is the social consensus around taste. The presence of YouTubers being taste makers can have a real effect on what is considered quality and what is sub-standard.

But yeah, point taken. Most consumers wouldn't have noticed or cared about panel gaps or paint depth without others telling them to care about it.
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