OT: Buying GM Stock, a steal at $2?

[tboyer]

Picked up 200 shares this week, I was wondering if anyone else is betting on GM hitting bottom at around $2?

[Boxtaboy]

Unfortunately, with the situation they're in right now, I think the price will go even lower....perhaps in the $1 dollar range within a year.

It will go lower, much lower, before it goes back up. Plan to dollor-cost-average.

[ekam]

Buy it if you think Obama will save the economy.

[bkiersz]

I'm passing on all the auto stocks. See below article from Bloomberg.



GM, Chrysler Have 70% Chance of Filing Bankruptcy, Moody’s Says
By Caroline Salas

Feb. 18 (Bloomberg) -- General Motors Corp. and Chrysler LLC, the automakers seeking as much as $21.6 billion in additional federal aid, have a 70 percent likelihood of filing for bankruptcy, according to Moody’s Investors Service.

“We continue to see a high risk of a Chapter 11 filing by one or more of the U.S. auto makers with the government providing” debtor-in-possession financing for the bankruptcy process, Bruce Clark, an analyst at Moody’s in New York, said in a statement today. The report reiterated an estimate Moody’s made in December.

Detroit-based GM and Chrysler of Auburn Hills, Michigan, met a deadline yesterday requiring that they show progress in revamping operations with $17.4 billion in loans granted so far. They also got a boost from tentative accords with the United Auto Workers to cut labor costs.

If GM and Chrysler fail to show by March 31 how they will become profitable, the Treasury Department can recall the money or require it to be used as bankruptcy financing. The two automakers said in filings yesterday that Chapter 11 restructurings may cost taxpayers as much as $110 billion and lead to liquidation, potentially costing millions of jobs.

“Because of the potential reluctance of constituents to make adequate concessions and the considerable complexity of the reorganization, the government may in fact have to stand aside and allow one or more of the companies to make a Chapter 11 filing as a measure that could accelerate the restructuring that is necessary,” Clark said in the report.

Moody’s rates both GM and Chrysler debt Ca, its second- lowest grade.

To contact the reporter on this story: Caroline Salas in New York at csalas1@bloomberg.net

Last Updated: February 18, 2009 17:25 EST

[bkiersz]

Originally Posted by ekam

Buy it if you think Obama will save the economy.

Another reason I'm not buying.

[gerrygug]

If they go Chapter 11 you lose $400.00
If the stock rises to $30.00 you make $5,600.00
Odds are they will go Chapter 11 to break the Union so they can reemerge with a more competitive labor situation. Hope you win, but my money is on bankruptcy.

Don't know what to tell you...my grandfather never bought stocks..only land. My father never bought stocks...just land and rental properties.

Right now realestate is hurting...I'm buying more land/rental properties. If stocks work for you, fine...owning properties is the only thing I know and trust, and it's never failed me...even now.

If you do buy, I hope it goes to 20, best of luck!

Originally Posted by tboyer

Picked up 200 shares this week, I was wondering if anyone else is betting on GM hitting bottom at around $2?

[fatmike]

OT: Buying GM Stock, a steal at $2?


TBOYER - Unfortunately, yes. They probably stole YOUR money...


Good luck though. I certainly hope they survive and your trade works out!

[bkiersz]

Originally Posted by Fred Demara

Don't know what to tell you...my grandfather never bought stocks..only land. My father never bought stocks...just land and rental properties.

Right now realestate is hurting...I'm buying more land/rental properties. If stocks work for you, fine...owning properties is the only thing I know and trust, and it's never failed me...even now.

If you do buy, I hope it goes to 20, best of luck!

Wow buying real estate or GM stock...I think I'd rather take my money to the casino and bet it all on black. At least then there is the POSSIBILITY that I may get something back!

[941MXVET]

Originally Posted by tboyer

I was wondering if anyone else is betting on GM hitting bottom at around $2?

No, but I do know a guy who has been making some coin trading GM stock, and he has decided to leave it alone for now. There just isn't a caytalist right now for a bounce. Keep your money in your pocket, or if you must own a car company buy HMC and ignore it for 3 years.

And I agree, the Union didn't manage GM into it's current situation, management did.

[Brucelee]

The below is from the UAW pension web site. interesting though, the SS is in the same boat. Not enough workers to support the promises made by the feds.

How about that sports fans!








. Is your pension up to specs:

Today, auto pension plans are underfunded and the American auto industry confronts a host of financial problems: Very high fixed costs (e.g., GM says its cost per hour for U.S. employees was $78.39 in 2003), global excess capacity, rising gas prices, and price deterioration due to costly rebates.

There is the simple problem of work force demographics. Auto workers are getting older and retiring. There are not enough new workers – or profits – to support this growing pool of retirees with contracted benefits. GM/Delphi already have 2.5 pensioners for every active worker and 60 percent of UAW members in that firm will be eligible to retire within 5 years; each car and truck sold by the Big Three is said to carry $900-$1,900 in legacy costs.


http://www.knowyourpension.org/pensions/UAWpensions/UAW_pension_qa_3.aspx

[Blue-S]

Where was all this "let the market decide" sentiment when the bank rescue package went through? Did the banks not put themselves in a poor position by loaning money to people that could not repay, and then packaging those loans into financial instruments so complex that it is difficult to determine just how screwed the investors are? Maybe the lack of outrage is because there are no unions involved...

BTW -- To keep this on topic: don't buy GM stock.

[Brucelee]

Originally Posted by Blue-S

Where was all this "let the market decide" sentiment when the bank rescue package went through? Did the banks not put themselves in a poor position by loaning money to people that could not repay, and then packaging those loans into financial instruments so complex that it is difficult to determine just how screwed the investors are? Maybe the lack of outrage is because there are no unions involved...

BTW -- To keep this on topic: don't buy GM stock.

My theory on that is as follows:

When banks get shaky, everyone gets shaky. The thought of a bank default likely hits almost everyone. So, we went along with sheep. Also, that was the first step and most I think thought that would be sufficient.

Since then, it has been like a death of a thousand cuts and I think many are getting tired of this and feeling like we are being hose by the big brains.

HA! Great question...the thinking must be, it's okay to drive a Honda, but it's not okay to get a loan from Japan?????

I was against the bank bailout...we are now printing money (literally) to pay bad debts. In the history of the world, the only thing that kills a society faster than that is war.

Gonna be a fun 10 years ahead of us!

Originally Posted by Blue-S

Where was all this "let the market decide" sentiment when the bank rescue package went through? Did the banks not put themselves in a poor position by loaning money to people that could not repay, and then packaging those loans into financial instruments so complex that it is difficult to determine just how screwed the investors are? Maybe the lack of outrage is because there are no unions involved...

BTW -- To keep this on topic: don't buy GM stock.

[fatmike]

Originally Posted by Fred Demara

I was against the bank bailout...we are now printing money (literally) to pay bad debts. In the history of the world, the only thing that kills a society faster than that is war.

"a war or 2"

[JFP in PA]

Are you people nuts? Did you ever stop and ask yourself why all the current and former GM exec’s dumped their entire holding over the last few days? So they retain something rather than the nothing they would get after a Chapter 11 filing. Bankruptcy is a real threat looming on the near horizon for GM, and the moment they file, your “$1 bargain” becomes less valuable or useful than toilet paper……

[limoncello]

Hindsight is remarkably clear...

Ford at $2-2.50 would actually have been a bargain back in the spring, since it's at 6.75-7.00 now.

One of the big three seems to have found a path through the quagmire.