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Atbed

 
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  • GM Is A Bargain: The Growth Drivers [View article]
    Having the ability to pay off debt is great. I'd just rather invest in the company that has the ability, but not the legal requirement to do so. I'm not combining political/social views with my financial views.

    But you bring up a few good points. Those are likely some of the reasons, GM trades at cheaper multiples than Ford. But I think what really matters is how much income growth there will be. A change in sentiment would help.
    Apr 29 09:57 PM | Likes Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    This is what I really feel. I may be wrong, so please let me know if you disagree. Trolls have a point to.

    People shouldn't buy houses if they can't afford them. Is it bad to not pay a bill? Yes. Do I think there was some unfairness in the bankruptcy? Yes. Do I think that by not investing in this stock...these problems or these equitable considerations will resolve themselves? No. I do not believe investing in Ford and not investing in GM will solve the issues you are trying to bring to light. So, I am fine investing in a company that got bailed out by the government. (Didn't Ford get a government backed loan too?) I am fine with buying a company that fleeced bondholders and creditors in the past (it is capitalism and those bankers shouldn't have made those loans in the first place).

    A lot of the things we care deeply about, simply are not matters others care about. IMO, the main consideration is moving on as a country. There will always be unfairness. We will never consider all the implications of our decisions. Management of all three American automakers, made stupid promises they could never keep (pensions and other post retirement benefits). Is it bad that management could not keep those promises? Yes Is it bad that as agents of the shareholders, they were not capable of making the right decision and ultimately destroyed billions? Yes.

    There are a ton of problems in the world we live in. Thank you for bringing one up.

    I myself made a math error regarding the taxes. Not that I believe, it matters. Anyone interested, should take a look at the balance sheet and footnotes to start understanding the situation.
    Apr 29 03:51 PM | 1 Like Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    troll
    Apr 29 03:21 PM | 1 Like Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    Let's all try and get along. We can all make money in our respective positions.
    Apr 29 12:25 AM | Likes Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    The $100B number is a hyperbole. The final number will be a fraction of the amount you threw out there. Some loans went to pay back previous loans made. If you borrow $1 to pay back another $1 owed, you can say they borrowed $2. Some loans were converted to equity. The final loss on this has yet to be determined. However, the bondholder's should have been more senior to the unions. I believe we agree on this last part.

    As for the tax benefits. Calling it a $45B bailout is a gross misstatement. GM can offset $45B in income, and save money on taxes. The government "bailout" in this case, is limited to the tax savings and not the entire $45B.

    The reduction of debt, and therefore interest expense is indeed a major source of GM's current profitability. But that would be understating the wage concessions, post retirement healthcare concessions, pension concessions, and other post retirement healthcare concessions that the unions made with both Ford and GM. Closing down factories and firing thousands of workers also helped both companies.

    IMO, the main reason Ford stayed out of bankruptcy was the huge long term loans they took out just before the Great Recession.
    Apr 29 12:11 AM | 1 Like Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    Thanks Wilson. Same to you as well
    Apr 28 08:33 PM | Likes Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    You are absolutely correct. Most of my article applies just as well to the overall auto industry, as it does to GM. To answer your question - why GM? the short answer is that IMO it has the best risk/reward amongst the automakers. I hope to answer your question more thoroughly in future articles.
    Apr 28 08:33 PM | 1 Like Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    Thank you for your suggestion. It is indeed showing some relative strength versus the market today.
    Apr 25 01:07 AM | Likes Like |Link to Comment
  • GM Is A Bargain: The Growth Drivers [View article]
    I think we both agree that GM has a poor brand image, among many consumers. It will be difficult for them to change this perception, but ultimately, I believe the fundamentals will win out. More on this in the future.
    Apr 25 01:07 AM | Likes Like |Link to Comment
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