Long-Term Ugliness

Below we highlight long-term stock charts of some of America's most well-known companies.  Needless to say, the last year (and in some cases many years) has not been good for them.  The real question is, will these firms remain the well-known, American companies they have been for decades, and if so, is now a good time to buy them?

Comments

[Xorthfred:]

The quality of the governed's life is eventually equal to the quality of government. Every one of the above stocks have suffered from fundamental and technical misallocations in the economy as a result of govt. mistakes. GM, although a poorly run company, suffers due to high oil prices-a situation caused by outlawing drilling in America in the areas where oil resides. PFE is a victim of the ghastly and enormous costs in terms of time and money imposed by the FDA to get patent drugs approved. The financial stocks plummeting in the above charts are the result of a congressionally enhanced housing bubble caused by extraordinary low down payments to buy housing over a very long time. This situation would have not been possible without the creation and subsidization of FNMA and FHLMC; extremely cheap money; and the 3.5% down FHA. Keep voting in politician lawyers who know nothing about economics and hate business, then we will become a very poor country indeed!

2008 Jun 12 10:07 AM

[Doug Korthof:]

GM's demise has nothing to do with oil drilling. Oil rose because Big Oil has no competition; they can charge what they want. There's no army of speculators, it's just the big un-American oil companies who set the price. We're driving less, but prices are rising still, indicating that it's not driven by supply constraints.

2008 Jun 12 10:32 AM

[marketwatcher2:]

Rough times have come and gone for all the above companies and America. We can blame managment or we can blame politicians. Both need to get in-line with what is happening in the World. If American Companies are to survive America needs to slow the amount of one way trade to this country. It's all about balance and there is no balance in our trade or economic situation right now.

We as citizens need to take more responsibility for what we purchase today because Big Business and Government aren't.

2008 Jun 12 11:06 AM

[marketwatcher2:]

If you look at the market as a whole it is in terrible disaray. Nothing seems to be working properly. Time for a change in economic and trade policy.

Oil has hurt every aspect of our economy and will continue to untill someone in government makes a decision on what our next energy source will be. It is going to take a commitment to an alternative source of energy to fix the energy problem which will in turn fix our Economy and Markets.

2008 Jun 12 11:14 AM

[User 209156:]

All arround negative sights, a buying opportunity for value investor. Agreed all of the above has their own problem. But if you look at individual, some are doing something to make things better. Like GM, stock is all time (meaning ALL TIME, since Nov. 1984). GM is crushed because off higher cost sturcture and some new youth love to foreign made cars. But if you see, GM is doing all it can to reduce the cost. Closing down plants in north america including canada where union is a major headache. They are making ways in India and China where the next growth is. And in India, GM cars are getting popular. Also, investing lots of money in India and China to outsourse parts and others. Agreed, this will take few years (would say 2) but all comes, GM will have much lower cost than now to withstand any slower sales cyle. Margin will impove and so the stock. Last week, Barron made same comments as mine (don't say I steal the idea from B) and they also see Gm stock much higher than now in next 3 years.

PFE, big gorilla, have lots of cash but no future product. But who knows that? Everyone is taking about Lipitor is going off patent in 2009 and PFE will have lower sales. But no one (I think no one !!!) giving any credit to PFE or any pipeline surprise. PFE have lots of drugs in pipeline and one of them become hit, PFE will be a multibegger. Other than that, PFE also can go for big buyout as lots of cash on balance sheet with no debt (small). Again, Some Indian companies are threat to PFE with their genaric formulas. Last night Ranbaxy (PFE's threat on Lipitor) was bought by Diachi of Japan. Same thing PFE can do buying out some Indian pharma who have very good pipeline and generic formula. PFE can go that way or buy any big phama's like Novarits or AstraZ. But PFE is alos a candidate which is going for multi year low and cheap valuation on which everyone has throw the towel, with no benefits for thier pipeline or merge/buy out.

Where C,AIG etc have their own problem. It's like a investors who bet big in dot com boom to earn easy and fast money. And then realise that "there is no free lunch" when bubble bust. Lost money but learn the lesson that every thing come with risk. So next time he become more caution. Cann't do anything else !!! Same goes for C,LEH,AIG etc. They bet big in booming housing market. Bubble bust. Lost lots of money. Lesson learned. Be good next time. Till then just settle the what you got. Fresh start !!!

Hope this thoughs heplful. Any comments, welcome !!!

2008 Jun 12 11:27 AM

[rpritch99:]

"...someone in the government makes a decision on what our next energy source will be." -says Marketwatcher

Now there is a stupid thought and a scarry prospect!

2008 Jun 12 12:40 PM

[Emerald:]

Other than GM, the others are a good relative buy now for significant upside in 2-3 years. GM has no leadership. Nardelli will sink Chrysler.

2008 Jun 12 01:15 PM

[Financial b...:]

The basic problem can be summed up in one word.....GREED!

2008 Jun 12 02:14 PM

[MikeW:]

Well, is it? Add some value and tell us your answer. We can read the charts ourselves.

2008 Jun 12 03:52 PM

[Thumbtack E...:]

Where was the article? I saw a paragraph which contained a question that I have been asking myself for the past several months.

It also contained a bunch of charts that I could pull up myself (don't need to, own most of them anyway). Whoever penned this should really be ashamed of themselves. How much work did it take? Five minutes, maybe ten? Next time please present some quality information that can be useful instead of posing investment questions to the reader without some supporting data.

2008 Jun 12 10:14 PM

[Got smart q...:]

I worked for GM 1952/1960, I worked in experimental engineering for the Cadillac division and in 1960 I was given the highest employee rating in the department.
You were graded on ten areas ( ability, initiative, etc ) Ten being the highest on each of the ten areas. If you were perfect you would wind up with a grade of 100. I received a total score of
92.
A fellow employee with the same classification as I but twenty years more senority signed a union greviance againest management because he was jealous and claimed he was better than I was. After calling in the chief engineer, my supervisor, And the General manager the "Management" agreed to lower my rating to one point below the more senior employee. He was an 82 and they lowered mine to an 81. GM's management was then an old boys network and I suspect it still is. No one there has the balls to do what must be done and unless they bring in new blood and give him total power to do it what's needed I'm afraid theres not a lot of hope for them. For the record I quit two months later and never looked back. I didn't care to work for a company that valued a kiss ass mentality over ability and effort.

2008 Jun 13 02:14 AM

[Michael L:]

"Oil rose because Big Oil has no competition; they can charge what they want. There's no army of speculators, it's just the big un-American oil companies who set the price." This according to one poster here.

How fortunate for all those price-setting big oil corps that they got every government in the entire world to swear to secrecy about their price fixing. Not one government has spoken up or brought up any charges against the evil American oil companies for collusion. Now that is real power. With power like that, I have a feeling that big oils next move will be to sell us muddy water with claims that it is a super fuel. Shhh. No one say anything.

2008 Jun 13 05:54 AM

[adan:]

i wonder where all the innovation that got us to the moon went?

mars? :-)

2008 Jun 13 10:28 AM

[longtimeinv...:]

This article didn't say anything. It just asked the qurstion.

(But I really do like your website)

2008 Jun 13 12:19 PM

[davcnslt:]

Why does anyone post an article like this? It is completely void of contributive information.

2008 Jun 13 01:35 PM

[Joyful Alte...:]

They posted the article to get us to comment, and we did.

GM's big mistake was not to push for single-payer universal health insurance long ago, say, maybe the Nixon era. They've been burdened by heavy costs for employee, employee family, and retiree health insurance that foreign car makers were spared; they've been competing with one arm (and maybe a foot, too) tied behind their back for a long time. Then again, they're kind of ponderous, and they might very well have screwed up and still found themselves the world's foremost provider of SUVs nobody wants. We'll never know.

As far as Pfizer, I agree with the commenter above. They've got a lot of cash and a fat dividend, and I bought some last week. They may turn around and go places with something in the pipeline or a purchase; if not, I'll get a better return than my bank offers for the foreseeable future.

I'm staying away from the whole banking, insurance, financial sector until it shakes out to my satisfaction, if ever.

2008 Jun 13 06:03 PM