GM - General Motors

[RadMan24]

Trevor out at NKLA. Time for Barra to be out too and a complete shake up at GM with some new DNA management team.

 

So much for due diligence. I agree heads need to roll.

 

I spent many years doing due diligence on deals. legal and business.  I can't think of a bigger DD screw up than this. there used to be a joke that you "should make sure that there is no moving truck in the parking lot" when you do DD.  I guess the joke is now changed to "and be sure that there isn't an electric cable coming out of the truck". this says to me that GM is way behind in EV, and let its panic cloud a fairly simple business DD job.  this is not about accounting fraud not being discovered...this is about not asking someone to turn the ignition switch on in the truck prototype.

 

What's the screwup? How much money did GM throw out the door? How is GM way behind EV when they were providing the technology? The commenters on this forum have simply not done their own DD.

[brose514]

Right on RadMan. Sometimes I feel like this is a glorified version of Twitter.

[hyten1]

This is pretty impressive, cruise av in San fran

 

[fareastwarriors]

Who preordered an electric Hummer?  8)

 

https://www.cnbc.com/2020/10/22/hummer-ev-assists-gm-shares-reaching-new-c.html

GM shares close at new year-to-date high following Hummer EV debut

 

 

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I'm sticking with my fugly cybertruck for now. 

[Guest roark33]

I have followed GM more closely after being involved in Nikola, and wow, GM seems to make some really stupid moves.  Their partnership with Nikola should basically make them uninvestable. 

[Xerxes]

I am going on a limb and say GM will continue grind higher and higher from here. I still have what I own from 2018; didn’t add/sell anything during the 2020 crash. Ain’t that smart beside focus was on other names.

 

Fact is there is capital chasing ‘electrification’ names, from BYD, NEO and Tesla, and have no doubt that GM can benefit from that easy money in having a blended valuation straddling both old economy ICE as well as the new. If Walt Disney can get blended valuation due to Disney+ while its money maker amusement parks are shutdown, so can GM.

 

 

[Gregmal]

Yeah...while Im happy the poor souls who have owned this forever are starting to see some money made, fact of the matter this is still just getting back to where it was in 2017 and 2018. As others have pointed out, the decision making here is poor. If your investment case is easy money coming into the EV sector, all around, I think you have better options than GM. Whats the upside? Maybe you hang around for another $10-20 a share? LOL Has anyone seen what kind of "easy money" is being made in other names? Why hang around for 20-30% in GM? Is GM a better company? IDK, GM is flirting with junk status, other companies have no debt or net cash. Network effect? Maybe, but GM is owned by the unions. Profitability? There's plenty of other profitable companies in the EV ecosystem. Mary Barra? Well, you guys can have her. One of the more valuable lessons Ive learned over the years is that if your investment thesis is "speculative", well then buy a company that will reward you for speculating. BYD has crushed it over the same period GM has floundered. Wont even mention Tesla. NIO and Li have done well. You've got a handful of the SPAC bunch ranging from total dogshit, to somewhat interesting. Unless of course you insist of earning your "value investor badge" here. Where 20% in GM >>>>> 50-100%+ in another ticker.....

[RadMan24]

Yeah...while Im happy the poor souls who have owned this forever are starting to see some money made, fact of the matter this is still just getting back to where it was in 2017 and 2018. As others have pointed out, the decision making here is poor. If your investment case is easy money coming into the EV sector, all around, I think you have better options than GM. Whats the upside? Maybe you hang around for another $10-20 a share? LOL Has anyone seen what kind of "easy money" is being made in other names? Why hang around for 20-30% in GM? Is GM a better company? IDK, GM is flirting with junk status, other companies have no debt or net cash. Network effect? Maybe, but GM is owned by the unions. Profitability? There's plenty of other profitable companies in the EV ecosystem. Mary Barra? Well, you guys can have her. One of the more valuable lessons Ive learned over the years is that if your investment thesis is "speculative", well then buy a company that will reward you for speculating. BYD has crushed it over the same period GM has floundered. Wont even mention Tesla. NIO and Li have done well. You've got a handful of the SPAC bunch ranging from total dogshit, to somewhat interesting. Unless of course you insist of earning your "value investor badge" here. Where 20% in GM >>>>> 50-100%+ in another ticker.....

 

Do you always troll the GM board? You're saying the same thing over and over. I own both GM and BYD and more than doubled GM and more than quintupled BYD. If you truly think Barra has not done a good job, you're a fool, especially after saying "there's plenty of other profitable companies in the EV spectrum." I'll name two: Tesla and BYD. I'll let you name the third. Good luck.

 

p.s. When you were speculating BRK was selling out of GM, the stock is up over 100% since then. Where's your badge?

[Gregmal]

Jeez! Always so much hostility Radman. As most here know, I was a GM shareholder for a while. A little more than 6 years. I bought in around $30 during the ignition switch scandal and was quite pleased with the work of Ms Barra for awhile. But the information does change sometimes. I hedged out my position and sold out at $35 at the beginning of the year as it became clear to me that there are better uses for the money, which there have definitely been. If, as you allude to, you're up 50-100% on GM or whatever, thats only really possible if you've been trading the name...a big no no for real value investors. If you've simply been holding(we know you didn't initiate your position in March/April, and maybe you're up 50% gross over a many year period but thats not really anything special) the returns haven't been great. Unlike Xerxes, I am fairly certain you've been here much longer than 2 years. I dont get why you lose your shit or get so offended at opinions or analysis that differs from your own...You do the same shit in other threads as some have pointed out. Its not really a controversial statement or "trolling" to point out that if you are speculating on EV stuff there are better ways to do it than GM. In fact, just yesterday there were multiple EV universe companies who's returns in one day exceeded anything you would get out of GM. Its great GM is up 100% or whatever from the lows, the same way its great SRG has tripled from the short term lows, but its disingenuous as a multi year investor to sit here and pretend its been a good investment. When trading the crashes is the only way you are making money in a name, thats typically a bad sign. I know, because I did it in GM for years.

[Spekulatius]

Did the narrative change the share price or did the change in share price change the narrative ? I have no clue as far as GM in concerned  but this year, it seems more like the latter to me in many cases.

[Xerxes]

I think the narrative was always there for GM having that exposure but there were no takers for that narrative.

 

I think what changed was the broadening of the names the ‘electrification’ investment dollar is chasing. For a longest time it was Tesla and now it is spreading and spilling over names that straddle old and new economies.

 

 

Gregmal

You are not wrong on some points. It is just that I have my fair share of tech names that go up day after day, and by owning some “value” names it helps anchor me in reality and not mess around with the winners.

 

I tend not to sell nor trade.

[RadMan24]

Jeez! Always so much hostility Radman. As most here know, I was a GM shareholder for a while. A little more than 6 years. I bought in around $30 during the ignition switch scandal and was quite pleased with the work of Ms Barra for awhile. But the information does change sometimes. I hedged out my position and sold out at $35 at the beginning of the year as it became clear to me that there are better uses for the money, which there have definitely been. If, as you allude to, you're up 50-100% on GM or whatever, thats only really possible if you've been trading the name...a big no no for real value investors. If you've simply been holding(we know you didn't initiate your position in March/April, and maybe you're up 50% gross over a many year period but thats not really anything special) the returns haven't been great. Unlike Xerxes, I am fairly certain you've been here much longer than 2 years. I dont get why you lose your shit or get so offended at opinions or analysis that differs from your own...You do the same shit in other threads as some have pointed out. Its not really a controversial statement or "trolling" to point out that if you are speculating on EV stuff there are better ways to do it than GM. In fact, just yesterday there were multiple EV universe companies who's returns in one day exceeded anything you would get out of GM. Its great GM is up 100% or whatever from the lows, the same way its great SRG has tripled from the short term lows, but its disingenuous as a multi year investor to sit here and pretend its been a good investment. When trading the crashes is the only way you are making money in a name, thats typically a bad sign. I know, because I did it in GM for years.

 

You still didn't name the third company. I've owned GM since July 2012, and yes, added when the pandemic struck and shares tanked, because Mary Barra was making the right decisions, and it has obviously started to show in the financials. I question your trollness because you come here saying she doesn't make the right decisions. You have no way of backing that up, that's an outdated opinion. You mention that there are many other profitable EV companies. I ask you to name a third, and you can't do it. That's the basis of my targets at you. Same with SRG, I haven't heard a thing in a while from you on that board, and yes its come up from $5 to $17 but its well down from pre-covid levels. Is it going bankrupt? Probably not. I didn't see you on the STNE board, but that wasn't a value stock was it? It was just at trade from $18 to $70. I also didn't see you on the BYD board, I think that's because you sold it. Hmmm.

 

I'm more than game on having a fair discussion, but also more than game on calling out the b.s. 

 

 

[Gregmal]

I dont, and have never had a position in STNE. I dont follow the company...Why would I comment on it? I have traded in and out of BYD and otherwise hold small basket positions in that and other Asia based companies like Xiaomi, Tencent, Baidu and Razer....theres hardly any talk of these here...why is that my cross to carry lol? When there's interesting discussion, or reciprocation from others, I engage. My opinions on GM are hardly that controversial, and as everyone has seen, have evolved over time. Why are you so hung up on "name a 3rd company or else"! Ive said EV universe. So you could put something like BMW or VW in the same category as GM, or you can look at things like Panasonic, or you could look to other types of suppliers or beneficiaries like MGA. Whats your fixation on GM?

 

So "calling out the bs"?....please...on one end you portray this hard nosed, silver haired, by the book value investor and on the other you're talking about how short term trading makes an otherwise lousy investment attractive! We can agree to disagree thats fine, but you dont need to get so self righteous because something thinks Mary is a bozo for her handlings with institutional investors, her mediocre investments in their technology, her focus on the balance sheet only to be flirting with junk anyway, getting bent over by the unions, and her desperation Nikola deal that she seems to have lucked out on only because of a short seller...

 

Its important to remember that pretty much everything under the sun has been going wild this year. That doesnt mean this turd turned a corner...

[RadMan24]

Well, agree to disagree on the strategic direction and execution of Mary Barra. I think most will see your arguments and look at the facts at hand and come to an appropriate conclusion.

 

The fixation of GM is its dominant position in trucks, including heavy duty, upside opportunities like commercial and medium duty trucks, dominant position in large SUVs, strong position in China, which is rebounding, particularly Buick, and of course the strategic direction involving Cruise and EVs in general, like reintroducing Hummer and offering a new lease on life for the Cadillac brand. The cash flow and earnings power of this business is truly excellent.

 

Here's one statement I take issue with "mediocre investments in technology." GM invested heavily in its digital infrastructure and created the Hummer without ever having to build a prototype. You scuff at the GM Cruise deal, which was bought for $1 billion, and has a valuation well north of $15 billion. I just don't understand your arguments. Is that a fair critique?

 

You also have GM finance and a balance sheet that isn't remotely close to junk status. Is there a recent Moody's downgrade I'm unaware of? The Nikola deal is entirely in GM's favor. Has it closed yet? And the unions went on strike, which is a risk on any auto maker, but I don't think GM caved in do you? How many of the plants did the union save? 1?

 

But I don't just own GM, the theory on BYD was spelled out in the appropriate thread, and not often spoken on here is Axalta. FCAU is another position, few folks are willing to take that ride to the bank.

 

[JRM]

Cruise is valued based on a Softbank style valuation, literally.

[Xerxes]

Also has outside investors Honda and T Rowe Price, though most people remember Masayoshi Son. 

 

[RadMan24]

Cruise is valued based on a Softbank style valuation, literally.

 

I used $15 billion based on Honda's investment first investment into it. $19 billion is latest via Softbank and others. It might be lower, but compare any Cruise video of self driving with Tesla's FSD and I think the $15 billion is reasonable - ball parking it. But again, it's not a fully developed technology.

[Jurgis]

https://www.wsj.com/articles/gm-wants-to-not-only-sell-cars-but-insure-them-too-11605708000

 

Screw GM and screw the data-tracking insurance companies. Over my dead body.

If car/insurance cos gonna require me to provide them my driving data I'm just gonna buy FSD Tesla.  8)  :P

[fareastwarriors]

Mary Barra on freaknomics

 

https://freakonomics.com/podcast/mary-barra/

 

 

Not the best interview/episode IMO

[RadMan24]

https://www.cnbc.com/2021/01/12/gm-shares-hit-record-high-on-electric-van-and-flying-car-potential-plans.html

 

https://www.engadget.com/gm-ces-2021-keynote-supercut-174714179.html

[BG2008]

Jesus Christ,

 

GM has been a left for dead value stock for a decade.  Now that they are taking on risk and going into EV which everyone is doing, they are all a sudden a high flyer?  Narratives matter so much in stock investing. 

[RadMan24]

EV Bolt sales doubled Q4 year over year, up 26% year over year. Trucks up. https://www.businessinsider.com/chevy-bolt-ev-strong-sales-along-with-trucks-and-suvs-2021-1

 

New Bolt EUV to get super cruise. https://www.theverge.com/2021/1/12/22226098/gm-chevy-bolt-electric-car-tease-super-cruise-release-date

 

 

 

[JRM]

Jesus Christ,

 

GM has been a left for dead value stock for a decade.  Now that they are taking on risk and going into EV which everyone is doing, they are all a sudden a high flyer?  Narratives matter so much in stock investing.

 

They beat Tesla to the flying car narrative.

[Gregmal]

Jesus Christ,

 

GM has been a left for dead value stock for a decade.  Now that they are taking on risk and going into EV which everyone is doing, they are all a sudden a high flyer?  Narratives matter so much in stock investing.

 

They beat Tesla to the flying car narrative.

 

LOL this probably is not insignificant in terms of making the stock investable for the rerating.

 

On a related note, the Mercedes EQS is stunningly gorgeous.

[RVP]

A few months ago I asked whether value investing has a marketing problem:

 

https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/does-value-investing-have-a-marketing-problem

 

Finally some folks starting to wise up.

 

This development by GM is an example of what I meant by "planting seeds of exciting promise to come in the minds of potential investors."

 

Honestly, much of the latest multiple expansion in growth is just perception driven. Growth does not hold a monopoly on perception, value can exploit it too - they've just been terrible at it so far.