The Case for Investing in Ford Motor

To the Editor:
After reading Al Root’s well-researched article on Ford, I am left scratching my head as to his bullish conclusion (“Ford Can Be Fixed. Why Its Stock Could Double,” Cover Story, Nov. 27). I feel that he lays out a great case for avoiding Ford. Root points out the company’s worst-in-class profit margins, lack of a viable electric offering, failure to earn a profit in Europe, extreme reliance on pickup trucks in North America, poor quality performance as measured in dollars spent on warranty repairs per vehicle sold, and the pathetic performance of its stock in recent years. As factors arguing for purchase of the shares, he cites hopes that a new CEO will improve quality and margins, and a relatively strong balance sheet. I smell a value trap.

Bill Gottdenker, Mountainside, N.J.

To the Editor:
What must make life extraordinarily frustrating for General Motors CEO Mary Barra and the new CEO at Ford, James Farley, is that Tesla sold fewer than 400,000 cars in 2019, has annual revenues that are about 16% of Ford’s and about 18% of GM’s, and yet its market capitalization is off the charts at $550 billion.

That tells the most unsophisticated investors what they need to know: Wall Street sooner believes Tesla CEO Elon Musk’s story—or is that a fantasy?—than it does the ones from the established players in the car and truck industry. It also suggests that they sell their Ford, GM, and Volkswagen shares and hook their future to Musk’s, instead.

Douglas Page, Norwood, Mass.

To the Editor:
I have driven an F150 for years. My current one is by far the best vehicle I have ever owned. I drive both off-road and highway. I have also owned the common stock for many years, and in fact picked up some more earlier this year when they were practically giving it away.

Lane Pittard, on

Tulip Mania Redux

To the Editor:
To those intrigued by so-called digital currency, researching the 17th century tulip-bulb craze might have merit (“The Big Money Is Driving a Rally in Bitcoin. Why It Can Go Higher,” Follow-Up, Nov. 27). At least that passion had some underpinning. If your bulb didn’t get a higher bid, hope remained it might bloom in the spring.

Thomas D. Finnigan, Alexandria, Va.

The Greater Fool?

To the Editor:
What if the hopes and dreams of Tesla investors don’t pan out? (“Tesla Storms the S&P 500. Here’s the Bull Case,” Streetwise, Nov. 27, and “Tesla Is About to Upend This Sector. What Investors Should Do Now,” The Trader, Nov. 27.) Could its stock price drop by 80% or more to levels at which it often traded within the past 12 months? Perhaps—through a combination of enhanced competition, failure of execution, heightened investor skepticism, and market technical factors.

Under this scenario, the S&P 500 index funds could lose nearly 2% of their total asset values, potentially made even worse if Tesla is included in those funds at a yet higher valuation than exists today. The S&P 500 itself stands a good chance of being the greater fool.

Paul Matten, Naples, Fla.

Climate-Risk Focus

To the Editor:
Matthew C. Klein alluded to the Treasury secretary’s leadership of the Financial Stability Oversight Council, or FSOC, as a key policy pillar (“Will Past Be Prologue for Janet Yellen at Treasury? A Review of Her Career Offers Clues,” The Economy, Nov. 27).

Expect a policy pivot regarding the intersection of climate and financial risk. A potential action item would be FSOC’s assessment of whether climate change poses systematic risk to the U.S. financial system. Such a designation would accelerate efforts to manage climate-related risks across the financial ecosystem. A sharper focus on climate risk also reinforces U.S. leadership on the international stage, in tune with a Biden administration.

Gray Schweitzer, Brooklyn, N.Y.

Boomers Buy In

To the Editor:
The baby boomers sold earlier in 2020 and sat on no returns this year, and now they’re buying in as yields get lower and prices are driven higher (“Move Over, Millennials! Boomer Power Is Fueling Latest Leg of Stock Rally,” Up & Down Wall Street, Nov. 27). Sounds like it won’t take much to set off a stock-selling panic as the boomers try to preserve what’s left of their retirement savings.

Terrence Milan, on

To the Editor:
Reminds me of the 1999-2000 meltup. Irrational exuberance part two. When the collateral economic damage of this disastrous pandemic becomes more apparent, the laughing gas will wear off and the outlandish price/earnings ratios will revert.

John Cannela, on

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