Well, if you're a regular reader of Controlled Greed, you know the cover story in this week's Barron's captures my attention. Being long General Motors (GM/NYSE) since launching this blog in April 2005 has been a largely lonely undertaking -- not to mention an unprofitable one at this writing.
Barron's cover story, Buy GM, guarantees nothing, of course. But at least the Barron's editors aren't a contrary indicator.
Vito Racanelli's article includes some sentiments that will sound familiar to any of my longer term readers. Such as:
GM's problems stem almost entirely from North America, where its costs are still high and too many of its plants build gas-guzzling sport-utilities. But the labor deal essentially will level the playing field within 19 months. And GM is shifting its production mix toward smaller, more fuel-efficient cars while globalizing its stable of "platforms" -- the basic structures on which vehicles are built -- to increase its flexibility and react more quickly to changing consumer preferences.
Overseas, where many economies are still robust, the American car maker is faring well. In the first quarter, GM had an adjusted pretax loss of $611 million in North America, but pretax profits of about $1 billion in the rest of the world. Its sales are rising sharply in China, Russia and Latin America. Even a flat showing in North America would boost the stock.
I recommended GM in April 2005 at $26.75 (my personal average cost is in the low $30s, because I bought my first chunk of stock in February of that year -- before Controlled Greed launched -- at $37). The stock has recently been under $20. If I didn't already own GM, I'd put 4% to 5% of my portfolio in it.
But do your own due diligence and make up your own mind. And I also recommend paying attention to something from the Barron's piece: things may get worse before they get better, yet a year or so from now you'll be glad you hopped on board.
Just remember -- there are no guarantees.
Barron's cover story, Buy GM, guarantees nothing, of course. But at least the Barron's editors aren't a contrary indicator.
Vito Racanelli's article includes some sentiments that will sound familiar to any of my longer term readers. Such as:
GM's problems stem almost entirely from North America, where its costs are still high and too many of its plants build gas-guzzling sport-utilities. But the labor deal essentially will level the playing field within 19 months. And GM is shifting its production mix toward smaller, more fuel-efficient cars while globalizing its stable of "platforms" -- the basic structures on which vehicles are built -- to increase its flexibility and react more quickly to changing consumer preferences.
Overseas, where many economies are still robust, the American car maker is faring well. In the first quarter, GM had an adjusted pretax loss of $611 million in North America, but pretax profits of about $1 billion in the rest of the world. Its sales are rising sharply in China, Russia and Latin America. Even a flat showing in North America would boost the stock.
I recommended GM in April 2005 at $26.75 (my personal average cost is in the low $30s, because I bought my first chunk of stock in February of that year -- before Controlled Greed launched -- at $37). The stock has recently been under $20. If I didn't already own GM, I'd put 4% to 5% of my portfolio in it.
But do your own due diligence and make up your own mind. And I also recommend paying attention to something from the Barron's piece: things may get worse before they get better, yet a year or so from now you'll be glad you hopped on board.
Just remember -- there are no guarantees.
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