FNBK 3400

1st Paper

For my common stock I have chosen to do my paper on Ford, because I have

been following them since the middle of the depression when they were hit hard.
Ford is a company that has been around so long that I have stayed interested in
them for quite awhile. Before the recession I was holding some of their stock myself
and ended up buying a little bit more when it was under two dollars, and sold the
stock after it hit 15 dollars.
As most people know Ford was incorporated in 1903, with the founder
Henry Ford at the helm. The company went public in 1956, but using a special b
stock the family retained nearly 40% of the voting rights. Throughout the time the
stock has been publicly traded the company has been in relatively good shape in
terms of financial stability.
Ford has 2 main competitors GM and Chrysler, all of which suffered during
the recession. In 2009 Chrysler filled for chapter 11 bankruptcy as they were having
staggering troubles making money. In a just completed deal the company was
purchased by the Italian company Fiat. GM filled for chapter 11 bankruptcy as well
and was given a government bailout in 2009. Later in 2010 they went on to have an
ipo and regained profitability later that year.
Ford has had some troubles in the past decade or so even before the
recession. In 2006 the recorded the biggest loss they had ever had on the books.
After the recession hit the company was in dire trouble. Instead of asking the
government for a bridge loan like GM and Chrysler did Ford just want a line of credit
for 9 billion dollars. The credit was to allow them to be protected if the economy had
gotten worse. During this time the company’s stock had fallen from about 15 dollars
per share in 2005 to $1.43 per share in 2009, and the company’s bonds were
classified as junk bonds. After they received their first profitable year in 2010 the
bonds were reclassified to investment grade and the company began to recover.
After an initial spike in 2011 to around 18 dollars per share the company fell in
2010 to around 10 dollars per share. Since then though it has had steady healthy
growth leading up to $16.65 per share as of closing market time today.

For my mutual fund I have decided to report on ProFunds Biotechnology

UltraSector Inv, (BIPIX). The mutual fund finds and invests in securities that the
financial advisors and brokers feel should have a one and a half times daily return
compared to the actual index. The mutual fund only looks at daily returns that way
they can quantify how much they have had a return of. The mutual fund measures
the performance of the biotechnology sector of the U.S. market. Companies that are
often looked at are one that has some kind of components for biological
development. Research and development for drug companies is something that is
looked at fairly highly as well. The companies that are invested in usually make their
money by selling or licensing tools and drugs for the public or for diagnostic uses.
This fund has two ways that you can buy into it. The first is, with the use of a
financial professional and the minimum to buy is $5,000. When not using a financial
professional it will cost someone $15,000 to buy into the index. The reason to buy
into the fund though is quite obvious looking at its returns are extremely high. As of
this year the returns are over 32 percent. The 5-year return for the index is over
40% that kind of return is what will make investors very happy about choosing that
index over another. The Morningstar rank for the index is a 5 on the return scale out
of a possible 5.
Since the index’s inception in 2000 the fund has seen over 100% growth
throughout the years. Looking around at other indexes in the trading leveraged
equity section of the mutual funds they all seem to have quite high returns for the
investor. The average 3 year return for these seems to be in the range of 25%- 40%
and nearly all of them are over 30% returns for the 3 month range. My fund that I
have chosen to research seems to be on par with the rest of these funds and seems
to be doing average to above average in the category that its placed in, it currently
has a rank of 8 in the performance section.
Overall, the mutual fund and stock that I picked out to research both seems
to be healthy and preforming quite well. Most investors should see nice returns with
these 2 different investments. I personally would like to invest in each of these
options as the returns seem quite nice compared to a .01% savings account, or just
sitting at home in a drawer.