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Discussion Starter #1 (Edited)
Buffett’s firm had 10 million shares of the automaker on March 31, the Omaha, Nebraska-based company said today in a filing disclosing U.S. stockholdings at the end of the first quarter. On that news, GM jumped 4.1 percent to $22.30 in extended trading.

http://www.bloomberg.com/news/2012-05-15/berkshire-discloses-stake-in-gm-as-buffett-bets-on-stocks.html

Buffett is the third richest person in the world, and amassed his legendary fortune buying under valued stocks that later rise in value. He's usually more right than wrong in his stock picks. “The beauty of stocks is that they do sell at silly prices from time to time,” Buffett said at the annual meeting. “That’s how Charlie and I got rich.”

The GOP's relentless GM and Volt bashing may have helped depress GM stock, making it an attractive buy. He obviously sees good days ahead for GM.

In related news, Mitt Romney advocates the US sell it's GM stock at a loss. Who to believe, Buffett (the stock is undervalued, sell later), or Romney (sell now at a loss)?

buffett.jpg
 

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The problem with GM stock is that the government owns a lot of it and everyone knows that the government wants to unload it. You're taking a chance that after you buy it the government will sell and the price will be depressed. Buffett has a longer time horizon so he's less affected.
 

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I see Romney's position is to unload now it at a price lower than the transaction price when the Government got it. That way he can say that the taxpayers lost money in the deal. I think the Government should ride it out and sell it when it becomes neutral in price to their transaction price. Nice that Buffett's firm bought into GM.
 

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I see Romney's position is to unload now it at a price lower than the transaction price when the Government got it. That way he can say that the taxpayers lost money in the deal.
I agree completely. What a patriot.
 

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I see Romney's position is to unload now it at a price lower than the transaction price when the Government got it. That way he can say that the taxpayers lost money in the deal.
He says he deserves credit for the bailout, it was all his idea, so you'd think he'd want a better price!
 

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Don C nailed it. The Government is a very inexperienced and lousy trader. When they do dump their GM, it will all be on one huge order unless they learned from their Maiden Lane experience with mortgage paper - they destroyed the market for what they were trying to sell then - and it took months to recover back to "horrible" after they slammed that market. Till then, GM might be OK as a swing trade, but not a set-and-forget investment; actually, these days nothing is set and forget unless you don't care about getting the money back till long after you die.

Like Buffet did when he publicly dissed derivatives, but while saying that, sold calls on the S&P for decades hence to raise money and save him from a couple other mistakes he'd made. Buffet talks his book - not yours, he's not an honest broker of information on markets.
 

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I'm no stock trader and don't even pretend to play one on the internet. But if someone held a gun to my head and forced me to make a play on GM stock, I'd probably hold out, hope the government does something dumb with their stock, and pick it up on the rebound.
 

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Don C nailed it. ... Till then, GM might be OK as a swing trade, but not a set-and-forget investment; actually, these days nothing is set and forget unless you don't care about getting the money back till long after you die.
Uh...this seems backwards? If "everyone knows" all this, and you're planning to hold something until way past the time the government sells it, it would seem that logic dictates to buy GM now, so you can take advantage of a fear/illiquidity discount.

Indeed, if the trendy thing is that everyone is presuming a government screwup, they may well be overestimating the likelihood. (Not that it's unlikely, but the wrong "point spread", so to speak.)

(Also, not an investor here either. Just curious.)
 
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