This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Buy American, But Not Ford and GM

Stock quotes in this article: F, GM, TSLA

NEW YORK ( TheStreet) -- Doug Kass wrote an excellent column last week for TheStreet's Real Money premium service. In "More Than Ever, Buy American," he outlined 10 reasons why he remains bullish on U.S. equities.

While I am not quite as optimistic as Kass, I do agree that the U.S. ranks near, if not at the top, of the best places to invest in the world.

Ford

I'll state the obvious now. If you're going to buy American, proceed with caution on two of the companies that are defined as quintessentially American: Ford (F) and General Motors (GM).

Do not expect a stable eurozone any time soon. And think twice about automakers such as Ford and GM that have significant exposure to Europe.

Of course, we received a loud and clear warning from Ford last week, via a regulatory filing.

The company announced its international loss in the second quarter would be roughly three times as much as the $190 million hit Ford's international unit took in the first quarter.

A handful of readers ridiculed me for the things I said about Ford and GM in "Ford, GM: Two Stocks I Would Not Touch With Your Money".

For example, one commenter who goes by the handle "michmnn" responded to a comment that classified the article as "interesting":

It's only interesting in that it exposes the authors lack of knowledge about the auto industry, how does "The Street" screen these writers?

Given the way the stock market gyrates these days, I'm not one to make much of short-term moves in stocks.

That said, it's interesting to note that when that article was published, Ford shares were changing hands at $10.01 and GM shares were trading at $19.85.

In Friday's trading, Ford shares dipped as low as $9.46 and ended the day at $9.59. GM fared a bit better, rebounding from an intraday low of $19.24 to close at $19.72.

I expect further downside or, at the very least, range-bound stagnation in both names for the foreseeable future.

It's about more than Europe, though. And it's certainly not about knowledge, or lack thereof, about the auto industry. That's a big mistake. Your "knowledge about the auto industry" will not take you all that far when selecting stocks.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,719.81 -84.90 -0.51%
S&P 500 1,933.83 -12.33 -0.63%
NASDAQ 4,388.2010 -33.8840 -0.77%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs