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Nutshell version: Ford and GM run in practically impossible competitive spaces right now.
A considerable amount of growth depends on Europe. Even once the European Union finds a political "solution" to its various crises, don't expect the European masses to run out and buy new cars. It will take some time for the deck to reshuffle in a collection of countries where even the relatively healthy ones must struggle through periods of profound change.
For all of the perceived uncertainty in the U.S., I agree with Doug Kass of
TheStreet's Real Money premium service:
Buy American. Kass provides 10 solid reasons why he favors domestic equities and has faith in the U.S. economy and consumer.
I offer an 11th that drills things down a bit.
If you live on or visit the coasts, particularly places such as New York City, Boston, Seattle, Portland, San Francisco and Southern California, you quickly realize that investors need to stop being so scared.
There's a reason why rents have gone through the roof in some of the nation's most unique and sought-after urban cores. I have read so many stories of rising rents over the last several days, I can barely keep track of them.
The folks paying these prices -- and buying homes in these communities -- have money to spend. And they're not spending it on the cars and trucks Ford and GM produce. They're not spending cash on products associated with construction sites and Middle America.
Given that this affluent bunch not only has the funds to burn and appears relatively stable and financially healthy, why shouldn't investors shun stocks like F and GM in favor of auto plays that mesh with urban lifestyles?
In the above-cited article where I chided Ford and GM, I suggested
Tesla Motors(TSLA - Get Report) as one of the few automotive stocks I would go long. Tesla is not a traditional auto stock; it's a tech stock. That's exactly why it's one of the few places in the sector to dabble.