If You Invest
I hesitate to "finance blog" but the latest news has me thinking about one of the investment strategies that has, on a few occasions, paid off for me. And by "on a few occasions," I mean in those instances where I utilized this strategy, it paid off for me. I can't suggest that it will always work but in those instances when other factors make it a good bet, it's a good bet.
Nutshelling it: Buy on bad news. In this case, Toyota. The link is to Yahoo Finance and gives you a good jumping off place to examine company info. Now, of course Toyota right now is under a cloud. They are being roasted by Congress and they've made some real mistakes in dealing with the unintended acceleration problems. Their share price has been hammered in just the last month from 90 to under 75. This is still higher than the yearly low which came in early 2009 but I'll be willing to bet that price was reflective of the economy as a hole (yes, I meant to say that) more than the strength of the company. But. I'll say that again: But.
Toyota is, in the non-government supported way, too big to fail. And present problems aside, they make very good, very popular cars. They face a US market rigged against them by the government control of GM and Chrysler but Ford is going to be the beneficiary of this, not the government motor coach companies. (You may consider Ford a "buy" at this point and I'd bet you could make some money off it if you buy and sell wisely.) A good company will not only survive bad times but come back strong. Do you think the world's largest car maker is not going to bounce back? I do.
Caveats: If the economy were really on the rebound, I'd be much more sanguine about this. If we didn't have the economically illiterate (or intentionally obdurate) Obama administration confounding a real recovery, it might take Toyota a couple of years to come back but I'd be willing to bet that on a 3 year horizon, Toyota can probably get back to around 100. That's a 33% return on a three year investment. Which you'd be hard pressed to match in other ways.
Am I going to buy? I can't say absolutely yes at this moment but I'm going to track TM (the ticker symbol) and if it hits any more dips, I may get a few hundred shares. Remember: never invest money you can't afford to lose and always attend your investments yourself. The "professionals" are more in it for themselves than for the investor.