Ford has $1.3 billion moral victory

Ford lost $1.3 billion dollars in the 4th quarter. Somehow...this is good news.

Analysts were predicting the company to do even worse. There were several reasons Ford beat analysts predictions. Without getting into the numbers, they basically used their cash reserves to dramatically cut cost and debt despite plumitting shares. Of the big three American auto companies, Ford is the only one that has not accepted any government money. As a result, when times improve, they will be primed for a big rebound. Their stock price is already reflecting these expectations. Since March 6th, shares are up 272 percent.

This is what is called the silver lining

Ford lost $14.7 billion in 2008 and is expected to be unprofitable until 2011. Yet, they made a few smart decisions, beat analysts predictions, and watched their stock go from $1.65 to $4.50 in six weeks. Additionally, with Ford being in a superior financial position to GM or Chrysler, in the next five years they will be able to afford more advertising, more models, better employee benefits, etc.

When the great depression ended, the blue-chip stocks were the one's from extremely beaten down sectors but that outperformed their competition. After this recession, expect a bank, a housing company, and a car company to explode. (among others)