Automobile Industry: Loving Your Car and the Regular Sunday Drive Is a Thing of the Past

September 30th, 2013

by Steven Bauer

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.


My Logo is: "Investing Wisely."

Forecasting for me is a bit different than what you might think or ever experienced in the past. It is not only a very profitable tool, but also how I go about making "Wise" investment decisions for myself and my clients. Investment decision-making has become both an art and a science in the last decade or so. In the "old days" you could count on "what you see is what you get." That no longer applies.

Today, market sectors and their respective industry groups tend to operate within themselves. Investing in the past was much easier. Everything seemed to track the general market. So, it has now become necessary to know how each segment compares with the others and how they operate globally. The world is much smaller and we are much more dependent upon each other.

My Basic Views on the Automobile Industry

This Cyclical Market Sectors still have their barn-burner Companies and ETFs, and the Automobile (overall Industry Groups) is one of those now in favor.

My current Forecast for the Automobile Industry has remained Favorable now for nearly five years. There were two periods that I took profits; they were in early 2011 and in 2012. On both occasions my Analytics clearly provided what I call "Re-Entry Points" and I am currently on a HOLD once again. I do have an Initial Bearish "Warning" in place, but that is only activated when I see some possibilities of again taking profits. The real serious time frame becomes one when I move to a Strong Bearish "Warning." When that occurs, soon thereafter I will definitely be taking profits. Fortunately, I am only "Initially" concerned for the Industry. That does not mean that I am equally comfortable with all the component Companies. When Companies like TSLA have a run like it presently has, I am a Very Cautious Asset Manager about preserving profits.

The Automotive Industry is back on its feet primarily due to low interest rates and government stimulus. That scene is fading and the average person is not doing as well economically as is rather commonly believed. There are massive cut-backs in spending in many areas and with interest rates on the rise and the maturity of the Automobile Bullish Cycle being very "Toppy", I suggest my Forecast is well supported with economic and historical market facts.

Table

The Table below shares several of my Component Industry Group Indicators of the overall Automobile Industry. At this time all are doing well, but often there are some clear variances or divergence in my Analytics of how they Forecast.

There are many more combinations of the above information in my Forecast before any investment decision can be prudently made. My Notes for Table will offer help to understand my Methodology of "Investing Wisely." I hope this will provide you with guidance.

Prudent Investment Decisions

Is it too late to Buy? At this time, the answer is yes. You just might want to wait until there is a new Bullish Inflection Point to do so. My Bullish and Bearish Inflection Points occur only several times per year.

My work/analytics starts with Forecasting and ends with very selective Formal Recommendations. In between it is a matter of waiting for the next Bullish or Bearish Inflection Point.

Charts

A Thirteen Year Perspective on the Automobile Industry ($DJUSAU)

It has NOT always been like you are being told by so many who do not take the time to do their homework and practice "Investing Wisely." The Automobile Industry has taken some big hits over the years.

Compare a Few Companies (from a Percent Point of View)

Perspective is a very profitable investment tool and seldom used effectively. There were clear reasons both fundamentally and technically for TSLA to break out of an (already strong pattern) and do its thing. This is true about AXL out-performing. Identifying these prospects is then incredible value for Accurate Forecasting ahead of the fact. I hope you know what I mean about "ahead of the fact."

Should you wish to read my latest article on Forecasting the following Companies and ETFs. Just Click on the Symbol. You will be taken (Linked) to my most current article as well at my last 20 articles on that Company or ETF. (May I suggest that it is an excellent way to gain insight into the accuracy of my Forecasts and Opinions). By doing so, you will have access to over 1,000 articles where I share my Analytics. In addition I have recently published all 500 of the S&P 500 Large-Cap component Companies. And, a select 200 of each of the S&P 400 Mid-Cap and S&P 600 Small-Cap component Companies. I stay quite busy doing my homework and analytics.

I hope you will find my "stuff" well worth your Time and discover that it is very Accurate – "Stuff." Click the links below for specific commentaries:

AAPL, ABX, AMZN, BAC, C, CAT, CSCO, CVX, D, DIS, F, FB, GE, GOOG, HPQ, IBM, INTC, JNJ, JPM, KO, MSFT, PFE, SBUX, SLW, SO, T, VZ, WMT, XOM, GLD, SLV, UCO

Supporting Articles for Further Understanding of My Forecasting - Methodology

  1. Please consider reading my article on "News." Any of the above Companies is like most other Companies that like to tell "Stories" or share "News" that they believe the "Financial Analysts / Financial Media" will want to pick-up upon and perhaps emphasize or stress a reason / excuse (news or story) for the Rise or Fall of Price Movement of that Company.

    I learned in my doctoral studies one thing amongst many others that has proven to be very worth-while (profitable) for over 50 years of managing other people's money. Please have a look at the this Flash Update from September 7th.

  2. I believe this article, and my "Flash Updates," like so many that I write, requires a supporting article with Additional and Specific Information and Details. Please have a look at the following commentary on Identifying Tops and Bottoms and Inflection Points.

  3. My "Flash Updates" are definitely "Alerts" or "Warnings" and can often be a leading or "Heads-Up" to eventually making or not making a Buy or Sell – Formal Recommendation. I have a unique way to make such decisions that I offer some insight into in the following article: Buy / Sell And Short / Cover – Formal Recommendations

To Email Me with your questions or thoughts: senorstevedrmx@yahoo.com

Concluding Remarks

At this time I certainly would not rush or even crawl in the direction of Buying within this Industry Group. Perhaps after a notable pull-back -- but even then you will want to be highly Selective with you choices of investment. Since the U.S and World economies remains quite weak, and the positives are most-often off-set with further negative economic data and the stock market itself is very over-valued and currently very over-bought. TAKING PROFITS (and CASH, if you have any), is the best place to be. If you don't have any CASH, I suggest you get some! Oh yes, I have my exceptions, my Bullish List, but it is diminishing almost daily. Holding with the focus on selling is also my recommendation.

There will again be fantastic investment opportunities if you will just be patient and disciplined with the management of your portfolio.

Most analysts remain overly optimistic.

Smile, Have Fun, "Investing Wisely,"

Dr. Steve

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