Failing Automakers & A Big Mouth Pope

Gee, so much can happen in a matter of two weeks.

I wanted to talk about this new position I have - and some of the people at the office - but with Ford and Chrysler back in the news and now the Pope opening his big mouth, possibly inciting the Muslim world, I would say I have enough to comment on.

I will save my comments on the Pope for later.

Ford is cutting thousands of jobs. With the orders I was getting to buy Ford stock, you would think that Ford was announcing a merger or an optimistic outlook. But then again, most investors are usually on the wrong side of the bet; they buy when the professionals are selling, thinking that they are getting a bargain; and they sell when professionals are buying. It is a key element of a loser's game.

American products, in general, tend to be inferior to others. This we know.

What concerns me is that when investors see an opportunity to trim back on their holdings or to consult with their adviser about their positions, they don't. They merely see "a buying opportunity" just because a stock is falling. Never mind the fact that when a company is cutting their dividend and the bonds are tanking that these are key signs that you should stay away.

There are two industries where the transfer of wealth happens so rapidly that it is mindboggling; the investment industry and the casino business.

In case you don't get my point, here is what it boils down to:

If a stock you like has fallen to a level where you think is a tremendous bargain and the company has announced job cuts, while slicing or eliminating their dividend, then you should stay away from that stock.