GM

[Uccmal]

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aQW.7B2UVOAY&pos=1

 

I am glad that value investing is still safe from the maddening crowds.  They are all busy drooling of GM issuing stock.  Is it just me or does this seem like an extremely risky investment.

[Smazz]

I was actually wondering if you could short a stock before its come out ;D

 

It is surprising really, we all know who makes the money on the IPOs.

 

As much as there has been craziness in the markets the last decade + some of the things Ive seen lately are taking the cake!

[Uccmal]

Shalab, It is certainly not undervalued.  As for overvalued I have no idea.  I have few problems with car companies and GM:

1) Business is intensely political - we saw how the US government and friends took out Toyota last year

2) Labour at NA - UAW/CAW plants is crippling - It is only a matter of time before success at Ford and GM is met with strikes and unreasonable demands.

3) IPOs are generally not very lucrative, excepting certain tech providers.

4) Car business is cap ex intensive and brutally competitive. 

5) How long before dirt cheap Chinese cars hit the market and take down prices and margins.  Asia/Pacific is a major market for GM and a hinge in their success.  Dropping margins there could put a major dent in GM

6) Now we have environmental regulations squeezing margins as well.

7) It is a high tech business but without the first mover advantages of an Apple, or a Google etc.

 

I could go on and on and on about my dislikes. 

 

For now I will watch the sheep as they line up for their feed.