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Started a GM position, hoping to add
Old 06-27-2020, 08:54 PM   #1
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Started a GM position, hoping to add

In case this turns into a "noun, verb, and car company X is better and I had a bad experience with my model YZ" I'll respectfully let the participants enjoy themselves. I'm merely writing this as an observation.

I'm not a big stock market guy.

And to be sure - I am NOT some corporate insider here but I have a rather unique vantage point into a few aspects of GM business from my own personal business life.

Barring some crooked book-cooking.... I believe them and have reason to believe that indeed, they ARE going to be profitable even in this environment and they are indeed able to break-even should a 2009 situation arise.

It's never been a 'sexy' stock. Sadly it has tons of cash and makes good profits so naturally not of interest these days...but those things interest me.

Furthermore, it is nothing but PURE fact that even during Covid unemployment....buyers are scooping up high-margin GM trucks. Many Ford F150s are coming in on trade and dealers are borderline violently pleading with GM for more trucks - - stuff GM makes lots of money on.

True - much of the famed GM stupidity *still* exists in their corporate culture - it's obvious to the blind but despite that.....they are churning out trucks and people are buying them up.

My *guess* is that their EV rollout might be lackluster - only because ALL my life I've known GM corporate to botch these things up - and it's usually a few corporate burnouts in Detroit running promotions and one hand has NO clue what the other does.

Nevertheless - - the media (coastal media types are hardly GM cheerleaders) is reporting that GM's EV investments are for real - - and may indeed command a value one day.

I started buying in the 24-25 range.

If we have another dip and it breaks 20....I am going to overbuy.

Whether one loves or hates GM - fact remains it's one of the globe's larges automakers. NO European Union troubles. TONS of economies of scale. I'm not sophisticated enough to know how this ends.....but it's a done deal that the auto industry will consolidate one day and when it does - GM has cash to be a buyer......but it would also be an attractive target for someone who wants a global distribution network and synergies all over the place.

People - even middle class people are buying up trucks @$40,000-$60,000 likes it's normal. $800 car payments are no big deal for them. Demographically....fast growing segments like Hispanic Americans - LOVE the trucks and many times - MANY times - their truck monthly payment equals their apartment rent payment.

Frankly I'm hoping for a dip. I regret not buying a few months ago.

FWIW (prolly nothing
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Old 06-27-2020, 09:44 PM   #2
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Please go review the trajectory that GM shares took when they ended out in bankruptcy last time around. To me, it looks to be exactly the same repeating itself.

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Originally Posted by MichealKnight View Post
People - even middle class people are buying up trucks @$40,000-$60,000 likes it's normal. $800 car payments are no big deal for them. Demographically....fast growing segments like Hispanic Americans - LOVE the trucks and many times - MANY times - their truck monthly payment equals their apartment rent payment.
And does that make lots of sense? Go review subprime auto loans and what happened last time around.
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Old 06-27-2020, 09:53 PM   #3
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Trust me - I know subprime auto loans slightly intimately - and for years - banks are approving car financing that makes NO sense at all--- but mind you - that is America. Houses, cars, $2,000 handbags, nights out to eat - people are living it up. Last time - GM's troubles were not absorbed via the bankruptcy - this time they are. (Toyota Motor Credit approves even riskier transactions than does GM Financial btw)

All I'm saying that it's a company making oodles of cash pre-covid, and still profitable during Covid. And if their claim is to be believed. they can breakeven in a worse climate than this.

I believe GM will be a player when the "next "chapter in auto industry begins - perhaps it'll be as a big car company, perhaps as someone who bought a competitor, or someone who got bought out .

If it goes under 20 again wish me luck - that's my cue to buy more.
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Old 06-27-2020, 10:20 PM   #4
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I predict you'll get that dip you are looking for and the price goes below 20.

I also predict you'll be sorry you bought GM.
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Old 06-28-2020, 11:43 AM   #5
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OP. Good luck ! Hope your theory is correct. IMHO, I would not touch GM.
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Old 06-28-2020, 12:05 PM   #6
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While this chart is not all telling, it kind of points towards where market share has been headed for GM:

Market-share-US-Big-3-1961-2016.jpg

Oh, and in 2009, GM stock went to about $1/share. So hang on, you may get it as cheap this time around.
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Old 06-28-2020, 02:25 PM   #7
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Michael, IIRC you have asked more than once here about buying individual stocks. Are you doing this with a small amount of "play around" money that is outside of a well-diversified portfolio? Are you quite young with a well-paying career ahead of you? If neither answer is "Yes," then I think you are playing with fire.

Two observations from investment guru William Bernstein apply:
(on investing for retirement) “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

“Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine”
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