Tuesday, February 07, 2006

GM, GM, why have you forsaken me?

They've cut their dividend in half. The dividend was the main reason I bought that stock in the first place. Of course, the point of cutting the dividend would be to use that money to get their act together and their stock price out of the toilet, so I hope they use it well!

5 comments:

Anonymous said...

how you can buy GM stock is beyond me. they make lousy products.

Anonymous said...

good lesson- high dividends don't necessarily mean a solid investment. and investing in growth stocks, purely based on growth projections or past history is a bad idea. you need to do some homework on the long term sustainability of that growth, and understand if there's a real driver behind it.

Madame X said...

I don't really remember my entire thought process on why this seemed like a good idea at the time. I don't think I thought it would be a growth stock but I thought it would hold its value and keep paying a good dividend. I would love to go back and look at the numbers from July 04 and see what red flag I missed, and why it didn't bother me that it was already on a downward trend.

Anonymous said...

don't beat yourself up too much. if it's any consolation- there are lots of people out there that did the same as you did. i hold gm bonds which pay off at the end of this year- i'm holding my breath....it's a good lesson for all of us. there's no substitute for homework when it comes to investing. the signs on gm were clearly out there for us.

Anonymous said...

The question you should consider is why you are still holding the stock. It doesn't matter what you paid for it, or what you were thinking when you first bought it. You just need to ask "is this the best place I could have this money invested right now?" and act accordingly. It is hard to imagine that GM is your best option.