Is now the time to Buy GM Stock?

GM's troubles run deep, and its reflected in the way GM's stock price has tumbled from over $60 dollars a share to under $1 dollar a share today (OTCBB:GMGMQ) That's more than a 98% drop!! In this context of this wide range, its easy to see why trying to bottom pick GM at this level could make some sense. However, this type of decline echoes the sentiment that GM's fate could very well be insolvency - in which point those shares are worth zero, zilch, nada!

Find Low priced companies not facing bankruptcy

As GM files for bankruptcy this week and the US government assumes control over a large portion of the company, the fate of GM's stock price for individual investors is still going to be weighed down with the massive amounts of debt that GM has piled on over the last decade. Bond rating companies know that GM cannot continue to make payments on this debt if their future prospects continue the way they are, hence they have been downgrading and downgrading their debt until it sits at the junk level. Getting a loan from the governement isn't a good sign, it just means that GM is no longer able to borrow money from anybody else! If GM can't buy debt at almost any price, why would you want to be buying GM's stock??

GM's stock fundamentals are seriously hindered in the coming years not just by its massive debt load, but also by its unequal (to the asian manufacturers) labor costs. In addition to this, GM made a huge bet on high fuel prices continuing by transitioning much of its research and development into fuel cell and battery technologies. If oil goes back to $100 a barrel, GM will definitely have a foot up on the competition. However, with Oil prices where they are today, GM is basically wasting its resources on technology that may never be profitable in a world of reasonable Oil prices.

While I can definitely side with the argument of going Green, in an economic environment such as we have today, there is neither the incentive or the resources to chase after unprofitable dreams. As GM's stock price shows, their unfortunate choice of investment in a time where there is little leeway to make big mistakes will ulitimately cost them, and the shareholder, big time.

Since you can't actually buy GM stock right now, thankfully there are still many opportunities to buy stocks with much cheerier prospects than GM in this market. With the meltdowns in the housing, banking, and automaking sector taking hold on the market, many stocks have been dragged down that otherwise would be chugging right along in this market. In fact, even with the economic conditions changing, they've still continued to be profitable and find new ways to make money in these markets. Buying these kind of stocks is what investors should be doing right now to ensure profits in their portfolios.

The stock picking services that I've started using in the last year have been great at showing me which stocks are going to go up, not next year but by as soon as next week! I've been able to make steady and consistent profits trading stocks that they've recommended me, and I can happily say that I will never go back to the dartboard form of investing again.

The service I've been using to find great stocks in this market is Jason Kelly's Stock Assault Software. Kelly has been running this great service for private investors, and has detailed performance records, since 2005. His software is well known for being able to pick winners - even in losing markets! Over 82% of his stock picks have hit their targets enabling myself and his other subscribers to make amazing profits time and time again! One stock that I can say is not on his buying list however, is GM.

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