With the last of negative sentiment surrounding General Motors along with their impending bankruptcy, many people are wondering whether a good play is always buy General Motors Stock at this point. Unfortunately, they couldn't be further from the truth!
While many contrarian investors would tell you they are right now is the perfect time to buy Stock in General Motors researchers it being knocked down vastly by fuel prices, the common economy, and the National government, their view is quite short-sighted. True contrarian investing coats finding otherwise strong Stocks that have been dragged down by short lived solution issues. With the overall, what we're seeing populace with its Stock value is a culmination of decades of mismanagement and also by cost issues just finally going to the forefront.
The main good reason that the Obama administration is failing to support General Motors and consequently WILL GM Stock, is because they know the issues that GM faces will not meet the criteria solved by even tens of enormous amounts more of bailout savings. Its a sad truth that General Motors just can not compete long-term with the kind of Honda and Toyota to quality or cost with very little some serious structural shake-ups. The Obama administration doesn't want to see General Buses fail or see its Stock reach zero, but reality dictates how a government (eg. the taxpayer) shouldn't continually get hold of a corporation's inefficiency.
Does this spell the long run for General Motors? Most likely not, but what it does mean is that GM will keep to the a painful restructuring process that may or may not lead to bankruptcy filings. When this does happen, then most certainly General Motors Stock is certainly going to nearly zero. About the, even without a extraordinary Chapter 11 filing, General Motors keeps heavily in debt and will meet to paying off its debtholders millions of years before its shareholders. Either one of them scenarios are going to keep a cap everywhere over the General Motors Stock price for a long, long time to carry place.
Read more on the decades-long buildup which is currently affecting GM's Stock Price
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