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There's an article in this weeks Barrons magazine, that states GM has serious cash flow problems stemming from its underfunded pension plan. The article predicts GM will have to cut its dividend. Of course if GM does, the share price will plummet to the low twentys or teens. I wonder what others that may have read this article think. Is there any reason to stay invested with GM? I've owned shares of GM since 91, and I must confess this investment has been a dog.
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There's an article in this weeks Barrons magazine, that states GM has serious cash flow problems stemming from its underfunded pension plan. The article predicts GM will have to cut its dividend. Of course if GM does, the share price will plummet to the low twentys or teens.

I find low twenties or teens based on this alone to be a very unlikely scenario, but that's just my opinion. After all, the underfunding of the pension plan has gotten a lot of press attention - and should therefore already be reflected in the stock price.
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d149: I've owned shares of GM since 91, and I must confess this investment has been a dog.


I find this stock to be predictably cyclical. I have owned it off and on for several years now, and have made a lot of money from it. I don't believe in long term buy and hold. Sell it next time it goes up, and buy it when it goes back down. I don't know when it will go back up, but I know that it will. I sell when I've made $20.00 per share. Then, when it drops again, I buy again. The times I've bought it was always in the high twenties, and I always sell in the high fifties. This way dividends are gravy. I have a Roth IRA, and therefore, no capitol gains tax.


Cib (wacky Fool)
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<I don't believe in long term buy and hold. Sell it next time it goes up, and buy it when it goes back down.i>

You're right. I should have sold it before the Hughes arbitration deal, when the share price was up in the nineties.
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>this investment has been a dog. <

I'm a little confused by this statement...but it may just be my outlook.

1: Has GM been paying a dividend since 91? (If so, you've been getting a constant dividende return)

2: Looking at a 1 decade chart, the price is still up 50% from ten years ago even after the bubble of "irrational exuberence" burst in 00 / 01.

Please expand on why you think this cyclical stock is a dog.


thanks
alex
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ps : I am a buy & hold kinda guy, with a preference for quality over momentum.
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Please expand on why you think this cyclical stock is a dog.

Because for me at its current price, it is worth about eleven percent less then my cost basis. As a long term investment this stinks. Especially If you throw in a dividend cut. I realize your milage may vary with timing, but for me, GM has been a dog.
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You do NOT buy GM stock as an investment. It's a speculation on a short-term uptick in the stock price. The same applies for any other heavy-industrial cyclical. If you want a good long-term investment, educate yourself on the Warren Buffett strategy.
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