Garth: I am enjoying the current uptrend in a lot of the stocks that I am long, and I am enjoying this uptrend in Ballard as well, because it brings the stock closer to the point at which I will short it.
The deals with other car companies that were announced just before and after the Daimler deal (the subsidized Ford deal is the only one I recall after - who doesn't like free money?) were all under negotiation for a long time, and these things develop a momentum of their own. Yes, from time to time car companies have bought products, even engines, from each other.
But the engine is way too important to get from a competitor except under rare circumstances, to fill a specialized niche in the product line. Everyone will now be focusing on alternative approaches to car engines, so as NOT to be in thrall to Daimler eight years from now. To put it another way, what competitive advantage would BMW have against Mercedes if all it could get from the latter were last year's models, since Mercedes would keep the most up to date version for itself? You don't think that BMW is thinking long and hard about that right now?
The fact that Daimler is spending a lot of money certainly increases the chances for success, but that is all. I forget the details, but I remember reading somewhere several years ago about Daimler spending over $100,000,000 on some sort of South African designed battery, and that R&D effort was written off. Big companies have to make these bets, but that doesn't mean they always succeed.
If Daimler eventually gives up, the stock goes to zero. Why is that remark bone-headed? What else does Ballard have? It has an excellent chance at being involved in a car engine eight years from now, but a very plausible chance of being zero by then if it turns out that Daimler can't make it work, and/or some other approach (hybrid gas/electric vehicles such as Toyota is working on strike me as a potential winner) turns out to give consumers a better car for their money, within the environmental constraints that exist at the time.
If it is one thing I am certain of, it is that between now and eight years from now there will be a bear market. In bear markets stocks like Ballard, with years to go before any profitability, are poison. So enjoy the uptrend while it is here, but if you really want to buy some as a long term investment, I would wait until the bear market has knocked the stock to single digits. |
