JasonC

The Ultimate Value Trap

Good, fair, hard hitting article.

The one other point I'd make for value investors as a discipline to spot value traps is to look at where a company's debt is trading, and honestly ask yourself whether the common can outperform the debt, if the debt remains entirely sound. GM flunks this test, and so do many other classic value traps. (Which isn't a recommendation to buy GM debt, incidentally).