Would you invest in one of the Automakers right now?

[IN-dem]

Would it be wise to buy stock right now? GM & Ford are cheap. I am thinking of buying stock and keeping it for a while. Is this wise? I have never invested before any help would be appreciated.

[Genevieve]

1. I have GM stock --

unfortunately.

I really don't know what to tell you. I'm very nervous
watching my portfolio
shrink.

[Mumble]

2. When they go bankrupt...

you will lose all of your investment. Think about it!

[Sherman A1]

3. I wouldn't

buy any stock right now, but it's your money and I am sure you can get some folks to that will tell you it's a great time to buy.

[TheFarseer]

4. here's my take

GM is an absolute clusterf*ck. Stay away from GM. Ford is a possibility. Ford has it's sh*t together more than GM. At $1/share which it will soon be at, it doesn't even have to move much to make you some good money. That said, it is almost as good as going to Vegas and putting all your money on red. You might also consider Nissan which is only $6 or Honda at $20 which are more stable and actually making money. That said, I would stay away from auto manufacturers til the new year at least and probably the stock market in general. Hope that helps!

[DJ13]

8. I wouldnt buy Ford now either

If GM goes bankrupt they will take suppliers down with them that Ford depends on to stay in business.

It will be a domino, and no US car company will be safe.

That includes the US divisions of Toyota and Honda as well.

[liberal N proud]

5. Considering they are going to be allowed to go belly up? NO WAY

Not even if it was penny stock.

[Sebastian Doyle]

6. If they showed any inclinations to move into the 21st century

then now would be the time to buy. If they get a "bailout" without actually changing anything, then it's only going to be a "stay of execution". Or more accurately, "stay of SELF-execution", since they don't really deserve to survive if they insist on keeping 19th century technology as the standard, which is exactly what the internal combustion petroleum burning engine is.

[DJ13]

7. If I was rich enough to loan them that $25 billion, yes

But then I wouldnt be buying stock, I'd be buying corporate bonds that pay interest.

I wouldnt touch their stock until its a sure thing they will still be in business when Obama takes office so I could be sure they would obtain the loans they need.

[IN-dem]

9. Thanks for all the advice-answers

I thought maybe they were going to get a bailout. I guess I need to do more research.

[Morpheal]

10. BARACK OBAMA NEEDS TO MEET UNION EXECUTIVES BEFORE DECIDING BIG 3

A lot of the business of making cars and trucks has been sold off, outsourced across the years.
A large portion of the vehicle is actually made by others, and bought in to assembly.

You have to keep that in mind.

If the big three are in that much trouble, their outsource tier 1 and tier 2 suppliers are in dire straits too.
So if you give 25 billion to the big three, you then have to consider what you will do for their slaves.
You know, the companies that the big three used to reduce the power of the union, so that autoworker
pensions, benefits, wages, and job security would be a thing of the past to many working on today's cars.

Is that for the good ? Is that what is right ?

I think it is time for Barack Obama to meet with the chiefs of the major unions.

It is time for Barack Obama to speak with the head of the autoworkers union first, before they do anything more.

Get that story right and some of the rest of it will follow.

The tragedy that mismanagement, bad government, anti unionism, and absolutely brutal greed have already
wraught in America and beyond its borders, does need to be considered, but you have to hear both sides.
You cannot simply hear the multi millionaire big three bosses squak about disaster. You have to hear the story
of the unionists, from the union executives. Oh man, do they have a story to tell to Barack Obama and to the
Senate and congressional leaders. It's time to listen, before spending even one more dime.

Robert Morpheal

[gravity]

11. You can lose all of your money

GM and F can go to zero fairly easily, if there is a bankruptcy or restructuring. You are gambling not investing.

Right now there are so many high quality stocks that are cheap and don't have the risk of going bankrupt. In this market, you will make more money investing in strong companies than praying that a weak one will turn around.

[Celebration]

12. No

Nor would I buy their bonds. They are cheap for a reason.

[GoesTo11]

13. Their stock will depend more on politics than anything else

Right now the prices are basically assuming bankruptcy, which would mean the stock goes to 0, but have priced in a small chance of surviving through a bailout. If the companies survived and made it through the economic crisis, they'd be worth a lot more than 2B that GM is now - if you had a company with sales of 200B (about GM's sales) and could make a 1% profit margin (quite low for an industry with value-added content as opposed to straight commodities), you'd be worth 20B. But in the normal course of business, the probability of getting back to profitability before bankruptcy would be nil. With government action - bailouts, something with healthcare and rewriting old UAW contracts (which get a lot better for GM after 2010 anyway), there's a chance of surviving, even if they will be smaller and still not very profitable coming out of it.

If you buy the stock, you're placing more of a bet on what the government will do than on management's ability. Management will continue to be mediocre, although they might stop doing boneheaded things like Hummers.

[MadinMo]

14. We were discussing this at work yesterday. With Ford so close to $1

it seemed like buying 100 shares might be a reasonable risk. I almost posted this question here then. Glad to hear everyone's take. I think I'll wait a bit. Thanks.