Excerpt from a Microsoft Investor site article (subscription -or I would've linked it)
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Automobiles
Should you buy Detroit on the new-car buzz? "Automotive stocks used to rally when the new models came out," says Hirsch. "But now they put out models throughout the year."
Well, that's not exactly true. "Car makers do dribble out new models all year round, but most models are still released in the fall," says Ashley Knapp, chief executive of AutoAdvisor, a Seattle-based car-buying service. "Between Thanksgiving and Christmas the new models are out, but sales are at their lowest. This is when auto makers do the most to promote their new models."
In fact, the numbers confirm that investors who buy auto stocks in November and hold them for six months have done relatively well in recent years. During the past seven years, Ford Motor (F) has seen its stock climb 3.2% during the average November-through-April month, vs. only 0.8% during the average May-through-October month. The trend is even more pronounced for General Motors (GM), at 3.7% vs. -0.9%. Of course, this could just be a function of the market's general strength from November to April, or simple coincidence.
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I wonder how much the strong run-up last year (due to the Associates spin off) distorted these averages. |
