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Losing Money Is Easy: Pfizer, General Motors, Kerkorian, Ford

Read more articles on Cars and Trucks and Investing.

December 5, 2006

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

Even in a rising stock market, there are always stocks that fall. Pfizer, PFE, is a good current example.

Bad news about dangerous side effects of a drug candidate named Torcetrapib that was looked upon as a way of increasing good cholesterol in the body sent the stock down more than 10% on Monday to $24.90, showing how easy it is to lose money investing in Wall Street. Unless a surprise merger or acquisiton of a promising new drug candidate occurs in the mean time, experience shows that the stock is likely to be flat at best for some time to come, meaning it is not likely to approach its all time high of around $48 in December, 2000 in the foreseeable future.

General Motors, GM, has also been making news recently with Kirk Kerkorian bailing out after his representative on the Board of Directors resigned when a proposed combination with Nissan and Renault fell through, even though such a business deal could have saved the companies something like ten billion dollars a year, translating into increased profits and, therefore, in theory higher stock prices. In reaction, GM’s stock has fallen under $30 per share and, from a selling investor’s (read Kirk Kerkorina) point of view should not rally in the immediate future.

The law does let Mr. Kerkorian change his mind, however, and he can repurchase shares after waiting the mandated 30 days.

Finally, Ford, F, is in the same predicament General Motors is in and is also looking to reduce operating costs by automating and buying out long time employees with a one time severance payment.

Ford is currently around $8 a share with problems similar to and an outlook similar to that of its biggest domestic competitor, General Motors.