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I used to associate GM with being conservative like GE, PG&E/Utilities, IBM, US Steel, Mattel/Hasbro, etc. I assumed it would be a company that would be eternal; a company that would last forever but ever since it went bankrupt I don't feel like putting money down to pay for stock if its just going to go out of business again. Is this GM going to be as reliable as the old one used to be in the days prior to 1975?
For what it's worth, there's a very old saying. "As goes GM, so goes the economy." I'm not sure if it would be appropriate for today's economy, but thought it appropriate for this thread.
If you are buying and holding it would probably be cheaper overtime than an index fund
Perhaps not in order to diversify for safety's sake you will not be buying just GM and all the other individual company purchases should be considered as part of the buy in cost.
Can GM go bankrupt again? Absolutely they can be either too early or late in introducing driver-less cars, in having more electric or alternate fuel cars. They may have large trucks as their base when the Saudi's turn off the oil taps or the kingdom falls to internal political strife. On the other hand the Saudi's may decide to pour it all now thinking the future will not be theirs and GM is stuck pushing electric carts when the people want high powered sports cars to go with historically cheap fuel.. All it will take is one or two misses when another manufacturer chose right and a bunch of politicians in the future will be trying to decide is GM too big to let the market decide and fail
I used to associate GM with being conservative like GE, PG&E/Utilities, IBM, US Steel, Mattel/Hasbro, etc. I assumed it would be a company that would be eternal; a company that would last forever but ever since it went bankrupt I don't feel like putting money down to pay for stock if its just going to go out of business again. Is this GM going to be as reliable as the old one used to be in the days prior to 1975?
To be honest there are question marks for MOST of your list.
GM - cyclical. Car makers are doing well now, but will GM be competitive after a downturn? At least they (theoretically) don't have the millstone of pension obligations anymore. But a few more safety-related deaths and accidents can take them down. In general, car making is too competitive - good for consumers, bad for shareholders. Berkshire's new money guys (Todd and Ted) invested in GM a while back but cut back by 25% recently. That may be because they think the stock is getting fully valued, not necessarily reflect on company's prospects.
GE - is a loser and will be. Jack Welch's "GE culture" screwed it up and it never recovered, IMNSHO.
PG&E/utilities - safe for now, but have run up quite a bit. Good for dividends, not so much for capital gains.
IBM - who knows. Buffett loves it, so you should. If he sells, you sell. Don't analyze.
US Steel - commodity business. Getting killed by China and India. Nucor may be better but 50/50 doomed/safe.
Mattel/Hasbro - now that is curious. Toy making is a very tough business as well - tough competition and consumer discretionary, like buying cars but with less budget impact. The stocks have bifurcated - Hasbro up, Mattel so far down that I think it is a good value as of now. I could be completely wrong but I am betting it's a cigar butt with a few puffs left still.
EDIT: so after all this rambling, the answer to your question is NO. GM (as the company) is not as safe as it was in 1975. And GM (as the stock) is priced pretty high.
The auto business is a very hard and complex business. Too much competition. Too much regulations. Labor/Unions. Overhead is brutal. It goes on and on. GM has had a bad year with recalls, penalties/lawsuits. Personally I would not invest in GM at this time. I would rather invest in one of the auto parts companies. Ford is better off than GM but that's not saying much.
-Cheers.
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