 Good day fellow investors. Today I'll discuss an industry, a sector that's very appealing to the value investor and the dividendist investor, because the price earnings ratios are very low when you compare them to the market and the dividends are high. I'm talking about the automotive or car industry. The low price earnings ratios and the high dividend yields are such because the car industry is the most psychical industry of them all. And there is a specific method to invest in that industry if you want to invest with low risk and high return. The only issue is you have to invest in a company that won't go bankrupt. I'll show you immediately what I mean on the example of Ford. This is Ford's chart since 1991 and you can see that the stock was the cheapest in 1991, 2002, 2009, 2012. Connected recessions, 1991 US recession, 2002 US recession, 2008 US recession and 2012 recession in Europe, which is a very important market for Ford. And you can see that the declines are very, very impactful, very significant. From peak to bottom, the decline in 1991 was 48%, in 2000 was 70%, in 2009 was also 70% and in 2012 the decline was 40%. So we know one thing, when the next recession comes, car manufacturers' stocks will be hit badly. This is due to their psychicality. And I have found a report online from a former Ford vice president and he says a normal typical recession, our sales for 15%. Companies buy less cars, people don't have new jobs, thus don't get bonuses or things like that. Everything removes demand for cars. And if you're a little bit tight, you're not going to buy a new car, you're going to postpone the purchase a bit, a year or two. So in a recession, the tight margins car manufacturers have get squeezed even more and usually turn into a loss. What the market does, they see a loss and the market is very myopic and they plot the loss into the future because they can't see that the economy is going well. When the recession is around, everything is black and everybody thinks black, at least most people. But if you go back to the chart, if you buy into a recession, the reversal, if the company doesn't go bankrupt, is almost a sure thing. So beware of buying. Car manufacturer stocks now at peak economic times. After eight years of economic growth in the US, five years in Europe, be careful about buying car manufacturers. Just that. A quick take on the current manufacturer environment. Sales in the US have stabilized. We can see US car makers have had declining sales in June 2017. Japanese ones are still relatively stable. Now, why is that? We are not even close to a recession, but aggregate outstanding vehicle loans are 40% above the 2007 level. As the economy didn't grow 40% since 2007, the only reason behind good car sales, good things going on currently for car manufacturers is an increase in credit. And credit is also very cyclical. So when there will be tightening in credit, car manufacturers will be hit even more. On top of more credit, what's very important to look at is how the cost for a car loan decreased in the last 40 years. So if you want to buy a car, buy it now. It will be the cheapest credit you can get. The low interest rates and the low credit costs tell me a few things. The first is, the Fed is not going to be able to raise interest rates that easily. Because higher interest rates will affect consumption, will affect the car industry. So as it's all connected, will affect everything. The only reason that might lead the Fed to increase interest rates is inflation. So we have to really watch the situation carefully to see how to best position our portfolio. I'll be making more videos about that, but let's focus on car manufacturers. So we have a situation where sales are at record levels. Interest rates are at record low levels. The economy has been doing good for eight years. Dividends are good. Manufacturers are making money. But that can change in a second. And if we go back again to Ford's stock price, you can see how impactful are negative recession news on a car company stock price. Therefore, if you want to be invested in car companies, please consider buying when there is a recession. Everybody's so hyped about Tesla and their 400,000 production in 2018, and I really hope Tesla succeeds in that. But apart from everything else Tesla has to do to reach those targets, a recession might destroy everything and Tesla just like that. Because Tesla has not yet seen a recession in the last eight years. And what car makers have to survive is exactly that. A recession. So to conclude, stock prices will be cheaper somewhere in the next decade. They will be much lower than they are now. Think about it when you buy car stocks. A recession, earnings will be negative. So you have to be ready to buy into negative earnings. Check out balance sheets always to see what's the margin of safety. This is just my view on the car market. It's a very low risk view. I'm sure that there are many people out there who like the dividends, who don't believe there will be a recession soon. So that's your choice. I will look at car makers when there's blood on the streets. Thank you for watching and I'll see you in the next video.