Why Warren Buffett Is Buying GM Now
By Mel Daris:General Motors (GM) is roaring back from its recent bankruptcy. In SEC filings, Berkshire Hathaway (BRK.A) disclosed that it owns 10 million shares of General Motors. I think chances of GM stock going up are clearly better given that the "Oracle of Omaha" recently purchased 10 million shares. In addition, GM is introducing a handful of new models that are competitively priced compared to Japanese and Korean models. Due to the government bail-outs and subsidies, GM is able to position them well and I expect consumers will buy them. Finally, GM has little exposure to Europe, compared to its cousin Ford (F) and I guesstimate even smaller exposure to the south European countries that are experiencing the harshest economic realities.I think that Warren Buffett and his investment conglomerate are hungry for returns as in recent years Berkshire Hathaway has been underperforming the S&P 500. Berkshire stock is up 6%Complete Story »
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