GM: More Popular Than A Year Ago

You know the old saying that goes something like this: stocks are probably the only merchandise that gains in popularity as they get marked up in price.

I thought about that when reading Mark Hulbert's latest MarketWatch column. He notes that General Motors (GM/NYSE) is up approximately 60% this year:

Though, with the benefit of hindsight, investing in GM stock a year ago looks like a no-brainer, at the time it was thought to be anything but. The buzz among investors was more focused on if and when GM would declare bankruptcy than on whether its stock represented an attractive turnaround play. In fact, as I pointed out in a column one year ago, just three of the investment newsletters I monitor were recommending GM.

The three newsletters? They are the Prudent Speculator, the Buyback Letter, and the Turnaround Letter. Hulbert says all three have excellent long-term records.

Well, Controlled Greed.com has only been around since April 2005. Hardly long enough to have any sort of long-term record -- good or bad. But based on Hulbert's column, it looks like I'm in good company in holding GM.

And, let me tell ya, GM gets way better press now than a year ago. If you've been a GM shareholder as long as me (early 2005) you know we're not out of the woods yet. But you also know the headwinds -- at least the journalistic ones -- are nowhere near as strong as last Christmas.

Comments

[George]

It's a shame Mark Hulbert didn't mention your blog in his article. You deserve some attention for your insight on investing in GM last year and your thick skin for holding steady through all the rough patches.

[John]

George: Thanks for the praise. I appreciate it.

Hulbert would probably say, with validity, that he covers newsletters and not blogs. Maybe one day he will include stock-picking blogs like mine, since the closest thing to stock-picking blogs like mine are the stock-picking newsletters.

Also, I should point out to newer readers that my GM investment isn't up anywhere near 60%. GM was recommended on this blog at $26.75. I bought at that price, but also some stock earlier in 2005 (before Controlled Greed was launched) at roughly $37. So my personal average cost is in the low $30s.

[Jason]

I don't know how you have had the discipline to not ditch this stock, let alone buy more.

As someone that is from Detroit, I am exceptionally partial to the automotive industry.

[John]

Jason: I think value investing is as much a mindset as anything. I believe Chris Browne says as much in his The Little Book of Value Investing.

I just try to care more about where a stock will be 3 to 5 years from now -- and also try to ignore price swings during the first months or couple of years.

[Asif]

John, if it makes you feel any better, Mark does not track a large number of new newsletters either due to lack of resources. I have been sending him mine for well over a year but he still does not track mine.

I am thankful to him for helping me get started as he was patient enough to answer a series of questions I sent him before starting SINLetter.

[John]

Asif: Hulbert sounds like a great guy and his helping answer your questions only underscores that. I've heard also that there are LOTS of newsletters who want to be tracked by Hulbert and haven't been. Being tracked by Hulbert is in itself a form of recognition. Good luck and I hope he'll start tracking the SINletter in the near future.