Question for you Stock Gurus

[ptiz]

Good morning fellow Fastlaners,

I'm looking to raise a little capital for my business venture (which you can see in one of my other threads) and I was thinking of putting some money in the stock market. Normally, I wouldn't do that as it seems too risky, but I have been looking at GM and I want to hear input from someone with a more through understanding of how it works prior to me plunking down some money on the stock.

This is where I am confused. GM's stock price is listed at $0.75 right now. They are not publicly traded right now so is that the price it was at when they got pulled out of the market?

I know that GM is going to be filing for their IPO soon, and if the stock is really at $0.75 I want to get in QUICK. Can I even buy their stock? How does this work? :huh2:

My math is this, buy 4000 shares of GM stock for $3000, and watch as the price goes back up, I can't imagine it going much lower than where it is now, and Ford has doubled in the last year from 6.61 to 12.25.

What do you think? Am I missing anything? How do I go about it?

 

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[Jonleehacker]

you're missing something really big.

If it isn't currently trading, or even if it was, they could do anything to the stock before re-listing the IPO.

For example, they could do a 10-1 reverse split and then revalue downwards.

In general your proposed trade is very high risk, in the worst possible way.

Consider that in stock trading you are competing with 1000's of very smart (ruthless) people who do this for a living day in and day out.

They don't eat if they don't take money out of the market on a regular basis. The mere idea that you're going to find a wildly profitable trade in a popular company is not very realistic.

If you try and make trades based on the easy money approach that you have, you are essentially making a donation to the pros in the market.

There are verifiable "edges" in the market where you can make money, but not from trades like this, mostly from the disconnect where emotion takes over and drives prices beyond a rational evaluation. Look at charts of 9/11 or BP (more recently) for examples.

 

[Bozigian]

I believe the all time low of GM stocl (Now Liquation Motors Company or something like that) was $0.06 or $0.08 I checked this back in Sept 2010

 

[Rickson9]

Good morning fellow Fastlaners,

I'm looking to raise a little capital for my business venture (which you can see in one of my other threads) and I was thinking of putting some money in the stock market. Normally, I wouldn't do that as it seems too risky, but I have been looking at GM and I want to hear input from someone with a more through understanding of how it works prior to me plunking down some money on the stock.

I can only speak for myself, but if an individual feels that the stock market is too risky they are likely correct - it is too risky for them.

The only individuals who feel that [insert name of asset class here] is risky are those who are unfamiliar with that asset class. This lack of knowledge in and of itself makes investing in that asset class risky.

If an individual invests in an asset that is risky, they will lose their money.

This is where I am confused. GM's stock price is listed at $0.75 right now. They are not publicly traded right now so is that the price it was at when they got pulled out of the market?

I know that GM is going to be filing for their IPO soon, and if the stock is really at $0.75 I want to get in QUICK. Can I even buy their stock? How does this work? :huh2:

GM has not issued any information around how many shares would be sold or when. The IPO will be underwritten by JP Morgan Chase and Morgan Stanley and GM will release a prospectus ahead of it's November IPO. As long has you have a brokerage/trading account you will be able to purchase shares.

To get the IPO price of $0.75 will be unlikely unless you are a GM employee, dealer or huge client of JP Morgan Chase and Morgan Stanley.

My math is this, buy 4000 shares of GM stock for $3000, and watch as the price goes back up, I can't imagine it going much lower than where it is now, and Ford has doubled in the last year from 6.61 to 12.25.

What do you think? Am I missing anything?

No offense, but the big thing that you're missing is that you are out of your depth when it comes to investing in stock and as such, have a high chance of losing your grubstake.

Best regards.

 

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