However, since he came on board, he announced further buyouts, pushed the profitability target to 2009 (or beyond) and has decided to suspend the dividend. No innovative ideas there.

Without a dividend, income investors are not likely to be attracted to Ford. There is obviously no question of growth investors wanting the stock either. As for value investors, it is clear that Ford is not going to be profitable for 2 to 3 years. So I basically see Ford as dead money at this point unless they start making some innovative changes.

They were late to the hybrid phenomenon (but to their credit they did build the hybrid Escape much sooner than competitors like GM and Chrysler), but could avoid the same mistake again and get a leg up by buying this innovative Silicon Valley based electic car company called Tesla Motors.

The sale of Aston Martin should more than pay for this purchase.

Thanks for the response. I think the fact that Ford suspended the dividend is a good thing. This will give them some breathing room to invest in more exciting vehicles. It’s true that the dividend income investors will pull their money, but the growth and turnaround investors will replace them. I saw an article saying Alan is actually having lunch at the employees cafeteria and starts driving Ford cars (give him insight on why their cars are bad). I also think that they have few winners in their lineup, such as the mercury brand and the mustang. (the problem is they need to get it consistent across the board and Alan is probably the best man to do that). Again I think you need to give this guy some time. I think he might still be in the “airplane” timeline, which take longer to build.

Thanks for the email. I’m still bullish on it but felt that it’ll take longer for Alan to turn this around, so I sold my position a while ago. I felt that there are other companies with better potential for the short term. Now that they came up with a profit, I might have to look into it again. From my first pass, on the earning release, it seems that they started to get quality under control, hence reducing the warranty costs down. This is a really good news and I think it’s inline with Alan’s strength in manufacturing.

My sources also shows that they’re gaining favorable reviews internationally, more so than Toyota.

I will check on the international sales and if they are indeed gaining traction the stock would be worth a second look.

Just days before I stumbled across your SINletter website, I had moved all my IRA monies from Money Mkt Accts to some decently diversified mutual funds right at the peak of DJIA 14000 — having kicked myself for missing the 600+ point rally in stocks in the previous 60 days (as my IRA custodian does not allow frequent trades). I am spending some slepless nights and riding the roller coaster for now, as the last 4 weeks have been brutal for most investors.

Unfortunately, I cannot (once again) move the funds until Sept 15 (for another 60 days) without penalty from the MFs. After that, however, I plan to follow your model portfolio very gradually and cautiously. I am also planning on reading your recommended books — which will require an herculean effort on my part (I am not a heavy reader — and finance is not my area at all).

Anyway, I just wanted to thank and inform you that you are doing a tremendous service to your readers (just received my first newsletter this month). I am very impressed with your work ethic, work product, and the handsome returns you have generated for your subscribers.

I have bookmarked your site and make it a point to visit it daily after market closes — to compare the change in your portfolio. That reminds me — could you add on the top right hand side (just below the indices) the daily % change in your total portfolio?

Once again, many thanks for dedicating countless hours of time sharing your knowledgebase and pointing complete strangers (too) in a financially lucrative direction. I do realize that you are spending all that time away from your family or other hobbies you have. To be honest, sometimes I can’t help wonder why you are doing this service — or if there is a catch just around the corner! I hope my skepticism is a myth, however.

Make it a good week.

As far as reading goes, I usually tell people who are just starting out to read Smartmoney Investing 101 and then One Up On Wall Street to get some insights from Peter Lynch, one of the best money managers of the 80s. If you are already familiar with the basics "Common Stocks and Uncommon Profits" as well as the book that is considered the investing bible Security Analysis (not an easy read) are great choices.

Market volatility has been quite high over the last few weeks but it does not even begin to compare with the volatility of the Indian market, which at one point last year corrected as much as 10% in a single day. Imagine the Dow dropping 1,300 points tomorrow. I am almost done with a small blog entry about market conditions and should post it shortly.

Daily or even weekly portfolio fluctuations do not mean much but I will look into what it would take for us to start tracking daily portfolio returns and add it to the model portfolio like you suggest.

There are a few reasons I am writing this investment newsletter and blog. Writing down an idea makes me take a cold hard look at the facts and it has helped me discard many unsuitable investments that may have looked appealing at first glance. I may also at some point launch a paid newsletter or start a fund and building a base before heading in that direction sounded like a good idea to me. For right now I am happy with my career in Information Technology and work with some truly outstanding colleagues.