December 7, 2020 BARRON’S 39
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TheCasefor
Investing in
Ford Motor
To the Editor:
After reading Al Root’s well-researched article on
Ford, I am left scratching my head as to his bullish
conclusion (“Retooling an Icon,” Cover Story, Nov. 27).
I feel that he lays out a great case for avoiding Ford.
Root points out the company’s worst-in-class profit
margins, lack of a viable electric offering, failure to
earn a profit in Europe, extreme reliance on pickup
trucks in North America, poor quality performance as
measured in dollars spent on warranty repairs per
vehicle sold, and the pathetic performance of its stock
in recent years. As factors arguing for purchase of the
shares, he cites hopes that a new CEO will improve
quality and margins, and a relatively strong balance
sheet. I smell a value trap.
Bill Gottdenker
Mountainside, N.J.
To the Editor:
What must make life extraordinarily frustrating for
General Motors CEO Mary Barra and the new CEO at
Ford, James Farley, is that Tesla sold fewer than
400,000 cars in 2019, has annual
revenues that are about 16% of Ford’s
and about 18% of GM’s, and yet its
market capitalization is off the charts
at $550 billion.
That tells the most unsophisti-
cated investors what they need to
know: Wall Street sooner believes
Tesla CEO Elon Musk’s story—or is
that a fantasy?—than it does the ones
from the established players in the
car and truck industry. It also sug-
gests that they sell their Ford, GM,
and Volkswagen shares and hook
their future to Musk’s instead.
Douglas Page
Norwood, Mass.
To the Editor:
I have driven an F150 for years. My
current one is by far the best vehicle
I have ever owned. I drive both off-
road and highway. I have also owned
the common stock for many years,
and in fact picked up some more
earlier this year when they were
practically giving it away.
Lane Pittard
On Barrons.com
Tulip Mania Redux
To the Editor:
To those intrigued by so-called digital
currency, researching the 17th cen-
tury tulip-bulb craze might have
merit (“The Big Money Is Driving a
Rally in Bitcoin. Why It Can Go
Higher,” Follow-Up, Nov. 27). At least
that passion had some underpinning.
If your bulb didn’t get a higher bid,
hope remained it might bloom in the
spring.
Thomas D. Finnigan
Alexandria, Va.
The Greater Fool?
To the Editor:
What if the hopes and dreams of
Tesla investors don’t pan out? (“Tesla
Storms the S&P 500. Here’s the Bull
Case,” Streetwise, Nov. 27, and “Tesla
Is About to Upend This Sector. What
Investors Should Do Now,” The
Trader, Nov. 27.) Could its stock price
drop by 80% or more to levels at
which it often traded within the past
12 months? Perhaps—through a com-
bination of enhanced competition,
failure of execution, heightened in-
vestor skepticism, and market techni-
cal factors.
Under this scenario, S&P 500
index funds could lose nearly 2% of
their total asset value, potentially
made even worse if Tesla is included
in those funds at a yet higher valua-
tion than exists today. The S&P 500
itself stands a good chance of being
the greater fool.
Paul Matten
Naples, Fla.
Climate-Risk Focus
To the Editor:
Matthew C. Klein alluded to the
Treasury secretary’s leadership of the
Financial Stability Oversight Council,
or FSOC, as a key policy pillar (“Will
Past Be Prologue for Janet Yellen at
Treasury? A Review of Her Career
Offers Clues,” The Economy, Nov.
27).
Expect a policy pivot regarding
the intersection of climate and finan-
cial risk. A potential action item
would be FSOC’s assessment of
whether climate change poses sys-
tematic risk to the U.S. financial sys-
tem. Such a designation would accel-
erate efforts to manage climate-
related risks across the financial
ecosystem. A sharper focus on cli-
mate risk also reinforces U.S. leader-
ship on the international stage, in
tune with a Biden administration.
Gray Schweitzer
Brooklyn, N.Y.
Boomers Buy In
To the Editor:
The baby boomers sold earlier in
2020 and sat on no returns this year,
and now they’re buying in as yields
get lower and prices are driven
higher (“Move Over, Millennials!
Boomer Power Is Fueling Latest Leg
of Stock Rally,” Up & Down Wall
Street, Nov. 27). Sounds like it won’t
take much to set off a stock-selling
panic as the boomers try to preserve
what’s left of their retirement savings.
Terrence Milan
On Barrons.com
To the Editor:
Reminds me of the 1999-2000 meltup.
Irrational exuberance part two. When
the collateral economic damage of this
disastrous pandemic becomes more
apparent, the laughing gas will wear
off and the outlandish price/earnings
ratios will revert.
John Cannela
On Barrons.com
BARRON’S HONORS THREE GROUPS
Three organizations are being recognizedbyBarron’sfor their contribu-
tions to improving the financial health and security of Americans.
The Cities for Financial Empowerment Fund’s Summer Jobs Connect, a
program that helps teens with summer jobs open bank accounts; the Global
Financial Literacy Excellence Center at the George Washington University, a
research initiative that has helped foster financial literacy programs; and
iGrad/Enrich Financial Wellness, a company creating personalized financial-
literacy learning platforms—all have demonstrated their ability to address
critically important financial needs that affect a significant number of people.
Organizations were evaluated based on their purpose, scalability, and
effectiveness by an independent panel that included Ralph de la Vega,
founder and chairman of De La Vega Group; Jimmy Chen, founder and CEO
of Propel; Lisette Garcia, senior vice president and chief operating officer of
the Hispanic Association on Corporate Responsibility; and Lindsay Kaplan,
co-founder of Chief. Read more about the honorees in the inauguralBarron’s
Celebrates atbarrons.com/honorees.