OT: Buying GM Stock, a steal at $2? - 986 Forum - The Community for Porsche Boxster & Cayman Owners

tboyer · 02-19-2009, 12:27 PM

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

Boxtaboy · 02-19-2009, 01:00 PM

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.

02-19-2009, 01:10 PM

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

ekam · 02-19-2009, 01:32 PM

Buy it if you think Obama will save the economy.

bkiersz · 02-19-2009, 01:47 PM

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 · 02-19-2009, 01:48 PM

Quote:

Originally Posted by ekam

Buy it if you think Obama will save the economy.

Another reason I'm not buying.

gerrygug · 02-19-2009, 03:10 PM

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.

Brucelee · 02-19-2009, 03:45 PM

If you want cheap stocks, there are plenty that have no risk of going Chapter 11. Alcoa, Dow Chemical, Altrea, Harley Davidson to name a few.

International Paper, RR Donnelly.

I am not buying GM. I think 11 is in their future.

Ford is OK and pretty cheap.

coreseller · 02-19-2009, 04:32 PM

Typically Chapter 11 relegates common stockholders to go to the back of the bus when it comes to who recoups what. Dependant upon the appointed judge, typically creditors, bondholders, pension plans, employees, etc. will see monies before you would as a stockholder. I would view it as playing the lotto, except with a MUCH lower payout if you hit. GM stock IMO is a guaranteed loss.

Perfectlap · 02-19-2009, 04:49 PM

wow you are brave. I hop you put a tight stop on that order.
In a bear market, the rule is not to go long until the stock has bounced off its lowest. A real bottom comes and goes quickly. We see no evidence of that.

If you're bargain hunting there are some tempting stocks, particularly in energy and agricluture (fertilzers) and maybe ceratin techs. But I wouldn't touch autos or banking unless it's to sell short and cover quickly. Those are falling knives with some potential big time disasters coming soon.

p.s.
I'm not buying and holding a single stock. All short term buys. I'm giving hard thought to going 50% in gold ETFs and the rest in T-bills in my retirement accounts as well. If GM goes under their will be a ripple effect through the entire S&P.

02-19-2009, 06:21 PM

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!

Quote:

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 · 02-19-2009, 07:01 PM

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 · 02-19-2009, 10:37 PM

Quote:

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!

Ofishbein · 02-20-2009, 05:40 AM

Quote:

Originally Posted by Brucelee

I am not buying GM. I think 11 is in their future.

Ford is OK and pretty cheap.

I agree. If - and it's a big IF - I were going to buy any US auto stock it would be Ford since I think they have the best chance for survival. They might even pick up some market share from the die-hard buy-American-or-walk contingent once the shakeout is over.

Unfortunately, I think GM and Chrysler are already dead but just don't know enough to lie down yet. Unless the UAW is willing to take big concessions, I afraid that these bailouts are just postponing the inevitable.

jmatta · 02-20-2009, 08:03 AM

Glad you didn't risk much investment...my bet is on BK filing. I've already lost more money than I'll probably recoup in my lifetime...why throw more away?

Hopefully, someone will save Saab in the meantime.

Lil bastard · 02-20-2009, 08:07 AM

The only thing which will save the General and the Pentagram in the long run is a Chptr.11, disolution of the UAW and Job Bank and a restructuring of their Healthcare and Pension programs.

These two companies have annual union payrolls of about $14B. But they have combined contributions to Healthcare of about $60B, and Pension pymnts. of about $14B (or almost 5 times more than actual payroll itself). The Job Bank, setup in the past to resolve a union arbitration, provides that if any UAW employee is permanently laid off, they receive 85% of their former salary for life (with COLAs!!!), regardless if they ever find other work! The Union is NEVER going to make these concessions voluntarily. Under a restructuring, they won't have much choice.

All these costs are either passed to you each time you buy their products, or as has more been the case, stifles their R&D committments. This has been the reason, much more than alleged stodgy thinking in the Boardroom, that has allowed so many foreign car makers to sieze their market share over the years.

tboyer · 02-20-2009, 10:33 AM

GM Craters! Stopped at 1.71, lost about hundred bucks, the only winner here is Sharebuilder.com :-) Appears that investors are worried that GM may convert a sizeable amount of debt into equity stock, not exactly sure what that means but it doesn't sound good.

Lil bastard · 02-20-2009, 11:06 AM

Sorry for your news. It could be linked to the fact that SAAB, a GM subsidiary filed today for Bankrupcy Protection. The Market, I believe sees this as just the beginning.

ekam · 02-20-2009, 05:30 PM

So what made you buy GM stock?

02-20-2009, 05:51 PM

Quote:

Originally Posted by Lil bastard

All these costs are either passed to you each time you buy their products, or as has more been the case, stifles their R&D committments. This has been the reason, much more than alleged stodgy thinking in the Boardroom, that has allowed so many foreign car makers to sieze their market share over the years.

very well said, lilbastard. The UAW is pushing hard to promote the idea that if GM flies, the car industry, and the United States are dead. Truth is, filing for bankruptcy doesn't end the company. Look at Delta.

If we keep giving GM bailout money, you and I are being forced to pay someone elses retirement fund...and here I was thinking we won the cold war against communism...