My GM Stock--Keep or dump???

[IslandHopper]

Fellow forum members, I'm getting ready for this 3rd quarter and need to have some insight on GM. Here's what I know and tell me what you would do? 1) GM is bleeding, they lost 3.25 billion in the first quarter and closed 4 US plants. 2)May sales were down 28 percent compared with a year ago. 3) GM holds a 49 percent stake in GMAC which has been downgraded to junk status because of the mortgage woes. 4) Shares of GM are down 30 percent this year after a 16 percent decline last year. Will the GM Volt charge my bottomline up?

[SKYtime]

This is such a tough issue. I'm not sure if anyone can predict what will be the bottom of auto stocks. The question really becomes how long are you willing to hang in there? It is unlikely that GM will end up in a bankruptcy case in the next 1-3 years. So the chances of the stock becoming valueless are not great. At the same time, the bleeding you describe will likely continue for the near term as well.

Do you need the capital loss to offset gains that would incentivize you to sell?

[MidniteBlues]

Depends on who is elected in November.. I myself, being a "bonehead" and still rather young, (as yourself) tend to hold to my stuff longer than I should. However, if come November, the demobrats take over everything, including O-bam-me, I be dumping everything, lock stock and barrel. That way, the demobrats can't take (tax) all my moneys from the little I have made in profits.. As for GM, that be a hard decision, depends how many shares you have, how much you have lost already and if you need the doe. What goes down, eventually will go up (I hope)..

[compdoc777]

You should have dumped that stock in 2000.

If gas prices increase which they probably will and since GM and the rest of the large automakers did not decide to put a dime of the billions they made into R&D for realistic alternatives to fossil fueled cars. Companies like GM are going to become the Goliaths that David took down and new startup companies with better ideas, planning and less red tape are going to mop up what is left.

[Texas Red Line]

I would take the GM stock and sell it and buy something that is energy related. In my opinion that stock and others like it will not rebound when the market does so you will be stuck sitting on a stock that has flatlined (I don't mean dead just comatose).

[eddf]

Having been an individual investor for the last 20 years, all I can say is dump a losing stock. It's very hard to do, but you must retain your capital.

I remember the gas shortage of 1978-1979. The big 3 were caught with their pants down when the public decided they wanted small cars. This is when Honda and Toyota saw their big opening. The rest is history.

I'm amazed how GM continued to ignore the trend in this decade and offer big SUVs. Someone will fill the gap with a practical, efficient car. In the meantime I'd look for other investments while you still have some of your capital. GM is not going under, but the trend does not look good.

Ed

[vfx]

Originally Posted by MidniteBlues

Depends on who is elected in November.. I myself, being a "bonehead" and still rather young, (as yourself) tend to hold to my stuff longer than I should. However, if come November, the demobrats take over everything, including O-bam-me, I be dumping everything, lock stock and barrel. That way, the demobrats can't take (tax) all my moneys from the little I have made in profits.. As for GM, that be a hard decision, depends how many shares you have, how much you have lost already and if you need the doe. What goes down, eventually will go up (I hope)..

First, don't take misinformed biased advice (see above quote). Second, decide what impact losing money on this stock might mean to you. If you have large stake in them, you might want to cut your losses. However if it's a moderate or minor investment you might want to hold on. GM might pull something out in their next generation of electric vehicles that consumers are willing to buy. Or, they get bought and revamped by a company like Toyota that could temporarily increase their stock at a better level for selling. Maybe even pull them out completely?? The rule in stocks is also the best rule of all: don't panic.

[RagtopGuyinTX]

In todays world with trades costing less than $10, why would somebody cling to a loser. Get whats left of your money and get out. Nothing good is going to happen anytime soon.

It's tough to catch falling knives.

[cerberus]

I usually figure by the time everyone's saying the same thing, I shoulda acted long ago but maybe should dollar average in contrarian. Too many particulars to have an opinion as others have mentioned, such as your exposure, your options, outlook, risk level, on and on and on.

[redhotchillipepper]

I am buying. I think that GM common can't possibly go down much lower. They are experiencing a boost in overseas sales and have lowered overhead domesticly by closing plants and offering pension buyouts to employees with over 20 years. They also were able to pawn off their hourly worker's health benefits to the UAW, which was expensive initially, but will pay off big in the long run. I think, of the domestic car producers, GM has the best chance of weathering a sluggish economy and weak dollar. At <$12 I think this stock is a bargain. If they go broke, I just have a small fraction of my portfolio invested.

[XTC]

Originally Posted by cerberus

I usually figure by the time everyone's saying the same thing, I shoulda acted long ago but maybe should dollar average in contrarian. Too many particulars to have an opinion as others have mentioned, such as your exposure, your options, outlook, risk level, on and on and on.

Consider a tax swap, if practical .... when everyone is bearish ... look at what is a year or two out !!!!!
The auto industry will change ... true at a slow pace .... but the problems are known .....
Can't wait to get my hands on the solstice coupe ..... bot 3 GM cars last two years .... one is a SKY
Inovation and change are forth comin'

The markets discounts many things ...
ALAS
Before they do NOT come to pass !!!

Don't sell the U.S. of A short - our birthday is on friday 232 years old !!!

[Celt03]

Originally Posted by redhotchillipepper

I am buying. I think that GM common can't possibly go down much lower. They are experiencing a boost in overseas sales and have lowered overhead domesticly by closing plants and offering pension buyouts to employees with over 20 years. They also were able to pawn off their hourly worker's health benefits to the UAW, which was expensive initially, but will pay off big in the long run. I think, of the domestic car producers, GM has the best chance of weathering a sluggish economy and weak dollar. At <$12 I think this stock is a bargain. If they go broke, I just have a small fraction of my portfolio invested.

yup ~

[MidniteBlues]

Originally Posted by vfx

First, don't take misinformed biased advice (see above quote). Second, decide what impact losing money on this stock might mean to you. If you have large stake in them, you might want to cut your losses. However if it's a moderate or minor investment you might want to hold on. GM might pull something out in their next generation of electric vehicles that consumers are willing to buy. Or, they get bought and revamped by a company like Toyota that could temporarily increase their stock at a better level for selling. Maybe even pull them out completely?? The rule in stocks is also the best rule of all: don't panic.

LOL Talk about a misinformed biased advice... Your funny mister... Toyota buying GM.. what you smoking out thar??

[mynewsolstice]

The Common Stock of GM is what you own...
GM has the potential problem of Bonds right now...
Essentially GM has negative Equity so what you own in stock is technically a forward looking vehicle not a current asset because there is no equity.
If fthe Bonds pull to collect then look out because the common stock is WAAAAY down the food chain of things to get paid...EG poof and gone!

[SKYtime]

Interestingly, GM stock rebounded today after it announced sales dropped only 8% from last year and it was expected to be about a 19% decline. I think GM stock is up almost 12% today as of my last check.

Just think, if the stock was dumped earlier today as suggested by many people, our member would have lost at least 12% more than if he held on just a tad bit longer.....

[Texas Red Line]

Originally Posted by SKYtime

Interestingly, GM stock rebounded today after it announced sales dropped only 8% from last year and it was expected to be about a 19% decline. I think GM stock is up almost 12% today as of my last check.

Just think, if the stock was dumped earlier today as suggested by many people, our member would have lost at least 12% more than if he held on just a tad bit longer.....

If a frog had wings he wouldn't drag his azz on the ground.

[cerberus]

Originally Posted by SKYtime

Interestingly, GM stock rebounded today after it announced sales dropped only 8% from last year and it was expected to be about a 19% decline. I think GM stock is up almost 12% today as of my last check.

Down 8.3% per sales day year over year, but down 18.5% June to June, 16.5% YTD, with June year over year car sales down 21.1%. The incentives help. Still not out the woods. This'll take a while.

[Texas Red Line]

Originally Posted by cerberus

Down 8.3% per sales day year over year, but down 18.5% June to June, 16.5% YTD, with June year over year car sales down 21.1%. The incentives help. Still not out the woods. This'll take a while.

Come on cerberus, I like my spontaneous, child like, presumptive, well thought out response better.

[SKYtime]

Originally Posted by Texas Red Line

If a frog had wings he wouldn't drag his azz on the ground.

But if the frog can earn you an additional 12% by dragging his green azz on the ground for a few feet, I'm all for it.....

[SKYtime]

Originally Posted by cerberus

Down 8.3% per sales day year over year, but down 18.5% June to June, 16.5% YTD, with June year over year car sales down 21.1%. The incentives help. Still not out the woods. This'll take a while.

Different data in the news stories. See: Market Dispatches - MSN Money

By the way, Saturn sales skyrocketed....