EBITDA is the single most tracked metric by every company I have worked for, or with, for the past 15 years. Executive incentives always include heavily weighted EBITDA performance. If we do not meet the plan on EBITDA alone, we get zero % of annual incentive. Everyone tracks it and is primarily measured by it. I had to chuckle at the suggestion of it being anything less because of the emphasis placed on it in any cash call review at the company and board level I participate in. EBITDA offers a more consistent assessment of the business health than a P/E ratio of years past…
Yes but the majority stockholders are members of the Ford family. They are more concerned about dividends as that is their income, but some do see their personal wealth rise and fall with the stock market. Tough to be a Billionaire one day and only a multi-Millionaire the next.
I did see in my research that EBITDA is the most common variation of that family of metrics. I never worked for a company that used any of those metrics though, or at least I never rose high enough in the ranks to have to deal with them.
None of this has changed my thinking on the stock market. I remember when most investors were in it for the long run and needed the dividends for income. A friend of my dad was a stock broker and he lamented long and hard about the evils of mutual funds and how they were going to ruin the market. To him, only a fool would invest in a mutual fund. BTW, there were some investors that did trade stocks primarily for the capitol gains and they made him a rich man.
Hmmm. That’s interesting. Of the individual stocks I bought, the company stock was the only one I ever made any money on and that was mainly because the company matched what I bought. For the average person to try to keep up and make wise individual choices really take a lot of effort. I knew one guy that had all of his money in P&G and was quite happy about it. Not for me though. I’d rather have someone tuned in to the market taking care of the portfolio and pay the small fee. As long as over the long haul it performs well.
You were more fortunate than I was. In the end I did OK by my 401k but between my job and family, I didn’t have the time I needed to devote to it. I did have some stock in a company I worked for but that got stolen by Wells Fargo when the took over the company that I had bought the stock through and held my portfolio.
Yes, I certainly agree. I noticed a change sometime in the late 90s where the emphasis on short term performance became so prevalent over longer term vision. It seemed like a dramatic shift from- what could you do to what have you done recently. The impulse was/is to cut costs and staff at the slightest downturn to maintain returns to investors. We’re still doing it today in the business I am involved in. We’re on the precipice of another downturn and rumblings are happening- based only on projections at this point. It’s a corrosive environment all the way around imho.
Which, of course, makes that slight downturn a considerably more-than-slight one.
We really are a fairly stupid species.
If you don’t know what EBITA is…then you shouldn’t be making statements like you anything about finances.
Do you know what capital gains is? Capital gains is determined after you sell a stock. It’ll be different for each and every shareholder.
Yahoo Finance says that 24% is insider common stock. Of that, about half is controlled by Bill Ford. FMC executives own the rest of the insider stock. That still makes the Ford family the largest share holder, but they don’t own anywhere close to half.
Yup!
Ford stock has been publicly traded since 1956.
Yes, the shares held by members of the Ford family have much-increased voting weight as compared to the shares held by we mere mortals, but the bottom line is that Ford shares have been publicly traded for more than six decades.
Mike, I think you are getting a little out of line here. As I pointed out that EBITA is not part of GAAP and not universally used, though a lot of finance companies do use one of iterations of it in evaluating their investments. Not knowing EBITA does not make me ignorant of how financial markets work in general.
I am willing to admit that I was not completely right in lumping all mutual funds in the same category because they all are not. There are some very conservative funds that are more focused on the long term and don’t have a high turnover in their portfolios. Now at the risk of over generalizing again, most of these funds are closed ended funds like Berkshire Hathaway, and for the most part are not available to IRA’s or 401k’s.
There are a variety of open ended funds that are the primary ones available for investment plans and they do vary from conservative to “high-growth”. The more they are slanted to high growth, the more they are like what I have been describing, high turn over, short term focus, and capital gains focus rather than corporate profits or dividends. The high-growth are pushed mostly to young and middle aged investors.
I am very familiar with capitol gains thank you. PITA when doing taxes. Maybe not so bad with stock gains but not easy if you’ve ever flipped a house.
1 Like
The 2001 Firestone ATX, ATX II, and Wilderness AT failures were not the first failure debacle perpetrated by the company. It was the third or fourth disaster, preceded by the Firestone 500 recall (1978) and a lesser issue with the Firestone 750 tire.
Similarly, the dry-clutch transmission is not Ford’s first transmission fiasco, merely the most recent. For a period of over a decade, from the late 1950s through the early 1970s, Ford automatic transmissions were known to jump out of Park into reverse. Plenty of damage but Ford stonewalled it all for years, stating that owners should have used the parking brake as well, for security.
Following that was the era in which Ford produced two automatic transmissions called (I believe), C4 and C6. Although mechanically interchangeable, C4 was lightweight and intended for light cars with low-torque engines. C6 was sturdier and more robust, for use in heavy cars and performance cars. That worked fine up until the days when Ford ran out of C6 transmissions and started installing C4s everywhere. If I remember correctly, they stonewalled on that one, too.
In the automotive business, it seems that history does repeat itself.
Larry
That smog issue with the Fords SUV happens on most vehicles where exhaust flanges leak. I designed a fix and sent it to Ford. The only application of my design was short-lived using a 2 piece assembly instead of 1 piece assembly was on a exhaust manifold flange. I wouldve done better designing a variable interrupted windshield wiper.