[bhd812]

When GM hit $1.27 the other day i said to myself maybe i should not invest $1400 in another set of headphones but instead throw some money out to GM. i mean even if worst comes to worst i will be loosing $1400 but if good comes to great then who knows what the shares will be then. I am looking to sell in a year or two either way, so i am patient.

if i buy the headphones i won't really use them (and it's not like i already have 15 others sets of cans sitting around getting dust) and i know i will never get my $1400 back,...but with GM it may just happen.

I really don't see GM pulling Chapter 7, come on they are way to big and have lot's to sell off if worse came to worse. maybe Chapter 11 if the **** hits the fan, maybe but thats a close maybe. still GM has the Camaro coming out which should give a boost in sales and of course if and when they do the Volt it will be the life saver for the company..

hmm.. headphones or stocks?

anyone have ideas on such a un-head-fi subject?

 

[Lamenthe]

If you plan on investing for the very long term, GM might be the best decision. If the investment pays off you can always buy the Hd800's later

. Although at this point I'd be wary of investing in any American car company.

On the other hand, you're looking at a $1400 headphone that is likely retain most of its resell value (if it's as good as everyone says it is). So it's one of those risk vs no risk decisions or rather patience vs impatience.

I'd go with the headphones, but I'm an impatient man.

 

[Clutz]

On one hand, I am inclined to suggest investing the $1400 in GM- I mean, at $1.27 it seems like a bargain- what can it do, except go up?

The problem with that logic is, you'd think everybody would be applying it. If the stock price in GM really is significantly undervalued, then buying it would be the smart thing to do. From my perspective, the big question is - why aren't other people doing it? I would say at this point a lot of people lack a lot of confidence in GM, which is why the stock price is so low. Now the stock price could be artificially deflated because of the effects of hedge funds and mutual funds having to sell their assets in order to cover the withdrawl costs of their customers, but even in that case, despite the recession, there have got to be big companies with capital lying around. The banking systems of most of the world are in bad shape right now, but- for example, Canadian banks have plenty of good cash and equity- and Canadian banks are big! I mean, ScotiaBank (the third largest Canadian bank, made a profit of $847 million this last quarter. The wikipage on ScotiaBank shows they have $40 billion in market capitalization, $28 billion in revenue for 2008, $4.3 billion in net income, and a total assets of over $500 billion. If this really was a good deal, I think that some Canadian banks would be buying up shares. Back when US dollar started to tank, there were rumors that a few Canadian banks were considering coming together and forming a joint holding company to buy up American banks which were traditionally a lot bigger- but because of parity in the dollar and other facts, could actually have considered buying up a big US bank (I believe they were thinking about buying heavily into Citi Bank). So, while Canadian banks are typically much more conservative in their investments than US banks, they will take risks. But it doesn't appear as that they are doing it, at least in this case.


So, I don't know. Sure, over the short term markets can be irrational, but over the long term markets are rational. So the big question to answer is: is the current market valuation of GM irrational? If no one anywhere in the world had serious amounts of capital to play with, then I'd say - sure, maybe it seems like a good idea- but Canadian banks have lots of money. So, I'd be wary. But then again if $1400 at $1.27 / share turned into $12.70, you'd make $10,000... So, je ne sais pas.

Or, if you really wanted to- you could buy the HD800s and ship them to me.

 

[FrederikS|TPU]

^^Where can it go but up? they could go bankrupt within a year :/

 

[Nocturnal310]

The share price is already 2.02

checked out their graph..and did some reading on events.

good for speculation if u have time... keep a Margin of Safety just in case.

not an expert by any angle..but have a background in Accounting & Finance and studied the market

all IMO.

 

[robm321]

Clearly investing in GM would be your best bet. New headphones will only lose value. Even buying a discontinued headphone would be better than getting the HD800. If the GM shares go up (and they will) you could buy the HD800 plus a high end amp and still have plenty of money left over.

Long term thinking will get you much farther than the impulsive "gotta have it now" kind of thinking.

 

[Nocturnal310]

Long term i dont even think Petroleum based Automobile companies will survive.


travelling by smoke emitting, high depreciation products feels so outdated.

 

[AlanY]

There is no way GM will avoid bankruptcy. (I'm not saying GM will disappear, but they will need to undergo a bankruptcy reorganization.) At that point your shares will become worthless.

You're more likely to have more money at the end of the day with the HD800.

If you want to play a high-stakes game, consider investing in GE. It's unclear at this point whether GE Finance is a smaller version of the AIG blackhole, or whether their considerable cashflow in other areas of their business is enough to pull them through.

 

[robm321]

Quote:

Originally Posted by Nocturnal310 /img/forum/go_quote.gif Long term i dont even think Petroleum based Automobile companies will survive. travelling by smoke emitting, high depreciation products feels so outdated.

All major auto manufacturers will be a part of the transition including GM. It's not like all the top care manufacturers are going to go out of business because there will be a transition. And travelling by smoke emitting, high depreciation products is far from outdated... only a very small percentage of cars around the world are not using gas.

 

[Tyll Hertsens]

Personally, I'd go with Ford if I were putting money into the market.

Buy the headphones, Billy. Mo' bedda fo yo head.

 

[Cankin]

HD800

Based on your investing horizon(1-2 yrs), even if you diverse your risk by buying mutual funds, you may not realize any gains over your principle(take a look at performance of various funds for 1-2 years period.)

GICs? I don't think you'd care about $100 return in one year right?

so if you don't mind losing $1,400 all together, go to casino if you're not getting headphone.

 

[krmathis]

Buy the HD800.
Cause GM seem to be in deep trouble, and its really unsure if they will live through it. At least with the HD800 you don't risk loosing all your money.

 

[rogue]

I certainly wouldn't give any money to GM at this point. They are hemorrhaging cash like crazy, so who knows whether they'll even survive beyond this year. The Camaro is coming out at the wrong time, with the down economy and all, and who honestly would drop $40k on a Volt (basically a hopped-up Prius, mind you) when gas prices are still hovering around $2/gal?

Go for the HD800's. Sure, they'll depreciate over time with use, but at least you'll get a lot more enjoyment out of that money rather than handing it over to a soon-to-be broke car company

 

[majid]

I never understood why GM is not a penny stock. GM's liabilities to its pensioners exceed any conceivable value for the company, and did so even before the economic crisis. Shareholders will get a haircut, it's as simple as that.

When you are investing in GM, you are not betting that they will ever come back, you are betting that the government will not let them slide into bankruptcy for political face-saving purposes. A lot of formerly unthinkable things like bank nationalization are now openly discussed.

 

[skiflyer]

If you're really ok with it going to 0, then buy the stock, because 0 is the worst case and the potential upside is large.

That said, I wouldn't be buying GM right now, but I can also think of worse stocks.