Markets are zealously climbing a very steep wall of worry — especially when it comes to expectations for automobiles.
Citigroup (NYSE:C) is out with a very bearish note saying investors are plain ignorant about car makers. Citi is updating their rating to “Sell” for all major automakers including Toyota Motors (NYSE:TM), Honda Motor Company (NYSE:HMC), General Motors (NYSE:GM), and Ford (NYSE:F).
Here’s the key point: “While some investors may be tempted to position for a recovery in H2 and out, the full extent of damage to the supply chain and production disruption from the power outages [in Japan (NYSE:EWJ)] is being underestimated by the market, and we would avoid the sector as things stand.”
As someone who has worked on Wall Street in investment banking, I prefer to ignore excel jockeys. But I like the rare contrarian perspective from an isolated cubicle. At the very least it should inspire you to do much more due diligence before piling into automakers on superficial assumptions.