Trading Made Simple

Dateline December 21, 2007, masses of automotive incentive forces have been taken back to the boarders, reduced production is planned. “We will not fight” acclaim Automotive Executives. Analysts are quick to publish reports on a more mature, financially driven industry, using buzz words like “market driven”, "ordered pipelines" and “Value Priced Products”.

But wait this is December.

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For those new to how automotive companies plan their calendar year, allow me to illustrate each month – along with the appropriate stock order.

Jan. - Buy
The big picture always begins at the Detroit Auto Show, where Automotive CEO’s from all corners of the globe project the promise of new markets, new segments and new profits. Most (if asked) underestimate first quarter forecasts. Keeping in mind this is Detroit and the month is January, most agree and go home, finding frozen inventories and little revenue.

Feb. - Hold
Ok a little push back from Wall Street on poor January results, no need to over-react its still February. Dealer meeting frenzy time - present confidential plans for a March close out – push new orders now, with the promise of increased incentive spending sometime around (pick a date).

Mar. - Sell
Hoping no CFO will notice, quietly borrow from fourth quarter incentive budgets and launch a March close out blitz, off-set spendings with increased wholesale gains and surprise Wall Street with a stronger than anticipated first quarter result.

Apr. - Buy
Follow January (different auto show / same story)

May - Hold
Follow February

June - Sell
Follow March

July – Buy
Similar to April

Aug. – Hold
Similar to May

Sep. – Sell
Yes it's June again

Oct. – BUY
New model launch.

Nov. – Hold
Short month - no one pays attention.

Dec. – SELL
Ran out of money, talk advertising / first quarter plans.

Ok now you know the secret – you can send me the commissions.

Happy Holidays.

Editor.