CNBC is talking about GM being back to 1929 levels in terms of market cap.They had a graphic on the screen saying the cap was $4.07 billion in 1929 and is $3.8 billion today (subject to the price hopping around today). The report also said that GM topped out at $52 billion in 2000.
I don't know but something there does not seem right to me. From 1929 to 2000 it only went up 13 fold? The high point for the Dow in 1929 was 381. The low point for the Dow in 2000 was 9796. So while the Dow went up 25.7 fold, GM went up only 13 fold? If we use the 2000 high point of 11,722 then the Dow was up 30.7 fold. In that light how was "what's good for GM good for America?"
I really don't know, does anyone know if the market cap info is right? I also have no idea if the car pictured is a GM or something else.
20 comments:
You got the numbers from CNBC, right?
So it has to be wrong! :-D
i literally laughed out loud
The car is a ~1948 Chrysler Town and Country Convertible.
no way to say it w/o being made fun of but i chose that pic because i think woodies are neat cars.
i quickly saw that and thought the same thing. i barely caught it though...did they suggest time value of money at all?
CNBC are looking at equity market cap, but probably ignoring debt. If so, then the total capitalized value is much higher than 1929, but most of increase came through increasing debt rather than equity. If you want to buy all of GM today, you can't just pay the $3.8b, you'd also have to assume the debts they owe or pay them off.
CNBC probably also ignores the amount of dividends paid out by GM over the years.
S&P 800 is only 2 days away
Ok, that last hour was truly frightening.
The double shorts are just going crazy.
DUG, for example, seems to be outracing the added option brakets for November anyway. I couldn't get through to Fidelity to ask what was going on and the Schwab website was incredibly slow.
And this was a day when our Jewish friends were at home...
I am a little worried about tomorrow... do Hank/Ben have any rabbits left????
R in NY
You're right, this IS frightening. A lot of years of saving have been wiped out on paper over the past couple weeks even with taking a much more defensive stance.
Bummed out but sticking with my DCA'ing.
DE :(
Well, I thought we might go to 800..but then I thought 911 might be
a good end to this bear. Yikes!!
Roger, I found this informational
video for your dogs to watch. :-)
http://www.youtube.com/watch?v=2a97C8hK5q0&NR=1
This is difficult.
I am now roughly 50% invested. I have been slowly and painfully increasing my investments this week.
I am not sure I will be putting any more money to work soon, but I do not want to sell either.
Last year was the time to sell. This does not look like a good time to sell.
seg
i emailed Phil LeBeau to ask him about the CNBC stats he was quoting, and he emailed me back that Global Financial Data provided the stat on GM's market cap back then.
he also noted that inflation adjusted, GM's market cap today would need to be $48B to equal the depression era value.
seg,
I hear you my friend. I went from 85-90% cash to about 20% cash in the last couple of weeks. I'm wiring in some more dry powder for next week. It's really difficult, but that's why I know it's right.
But to put it in perspective, this is not cutting into my emergency fund, my house is almost paid off and I have no other debt and a lot of time (god willing) to wait it out. I can't assume everyone else is in the precise same situation as me. Hopefully most are doing even better :)
I have been sitting on the sidelines over the last month, during this 20% crash over the past 10 days or so, in about 90% cash. I believe we have another 10% to go, which would make a 50% correction in this not so normal bear. This without a doubt is the most painful correction I have ever seen and felt since I have been in the market (1985). I believe the next 10% will be a little slower down than the past 20%. Just my opinion based on nothing more than an opinion based on the most recent past.
BWJR
BTW, I think the car in the photo is a GM model: a 1946 or 1947 Cadillac.
I own a 1947 Cadillac hardtop (less impressive than the convertible pictured).
The car in the picture is definitely a Chrysler. GM never made a woody (I'm pretty sure and I lived through the period).
Whosonfirst
There's definitely, definitely, definitely no logic
to human behaviour.
Bjork
GM needs to move production to Mexico. It sounds lame but I think it will help. a lot of US companies have used this to build back up.
http://stocktruth.com/chart.php?symbol=GM
Stock Truth might think they are going to level off, but I dont.
I would keep trucking right across the country line!
BUY GOLD
Roger,
Do you start buying here or do you wait to go above the 200 dma?
I have been investing ira and 401k money this week.
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