Dow 30 Graphic & Info

[motordavid]

Interesting Graphic and stats showing how the "Dow 30" has performed since mid 2001. I realize one can play with any time period to make a point...I was just surprised how many (18 of 30), companies had eroded and/or dived in the snap shot period. I'm gonna tape this next to me 'puter as a reminder that the Dow Avg is not the mkt...S&P, Wiltshire, et al.

I must admit I have 4 of the "ups" and 3 of the "downs" in this list.
Good Investing and GL.
md

StockPick'[email protected]

[vinuneuro]

Very interesting. I mildly started investing on my own (through my parents) in highschool and am getting more into it through reading. My mom is very active in watching all this.

[Kewl X5]

S&P 500 has done decent in recent years.....check it out.....
http://bigcharts.marketwatch.com/qui...SP500&sid=3377

[Chris F.]

I know, I know, never ask friends for investment advice....but do you guys think GM is going to go into bankruptcy? Its a heck of a deal right now if they don't...

[motordavid]

CF: Maybe, but maybe not, lol!

Honestly, I read NYTimes, WSJ, Barron's & IBD on Sat. and I can't tell you...and, if you line up 20 analysts, you'll get a variety of hemming and hawing.

Short/med term, imo: no way BK. Will the stock stagger north? Maybe worth a dip in with Stops in place.

No Xpert here, but I do rely on some substantial study, finger wetting in the wind and good old luck & intuition to keep my lil'nest egg in place, beat inflation slightly on an annual basis, protect principal and withdraw within our "retired budget". It is an entirely diff game without large wads of earned income flowing in over the transom.

GL,md

[AutoXer]

You did better than I did. I have one of the winners and five of the losers. I am mostly in hi-tech, so with the Nasdaq falling out of favor, I expected it.

I was wondering about GM myself. I don't see how the government is going to let GM fall. Remember Chrysler about 20 years ago when they were on the verge of bankruptcy and how the government bent over backwards to bail them out. I think the same thing will happen with GM.

[motordavid]

Originally Posted by AutoXer

You did better than I did. I have one of the winners and five of the losers. I am mostly in hi-tech, so with the Nasdaq falling out of favor, I expected it.

I was wondering about GM myself. I don't see how the government is going to let GM fall. Remember Chrysler about 20 years ago when they were on the verge of bankruptcy and how the government bent over backwards to bail them out. I think the same thing will happen with GM.

Well, my 7 Dow30 stocks only represent about 20% of my port. I have a few "tech" or tech oriented stocks, a few big cap co.s and lots of under the radar stuff, small to largeish, that get little attention or euphoric press but chug along nicely. And, lotsa cash, cash equivs., some TIPS, TaxFrMunis and other stuff. And, a couple of decent debt-free houses and some real estate. Not crying the blues, not bragging, either and I don't ever miss lunch or look back, woulda shoulda...

The GM debacle could be a MichelleLengthTread here, imo, (no dis to Michelle, ), but, until and unless theOl'Gen can convince rank & file to give up some of their current and future benies, and corp can toss some suits and overhead, and they make some more cars that anyone but pablum retirees care about, it will be a tough row to hoe, new 2009 Camaros or not. FoMoCo is hurting, too. Chrysler is mildy and momentarily euphoric, but the car biz, in large Mfg'ing Vols, is not a fun biz to be in, imo.

Back at the Ranch, trying my best not to read like a fatherly lecture, my continuing advice and drum beating on this topic over the months, is for you lucky 20,30,40 Sumpins to pack as much away as you possibly can into your company's "plan", 401K, IRA, Roth, et al. Time is on your side, but only if you pack it away in combination with avoiding that Keeping Up with the ChaoticCreditCharred Joneses syndrome that seems to permeate most of what we do and "want".

I'm not trying to promote Kias over M6s, etc., and most here on this board are, from slight details gleaned to opins gathered from my reading or direct knowledge, doing very, very well.

Alas, Nothing beats packing dough away in almost any kind of reasonable instrument(s), over time, to secure your financial well being in the future. No One I've ever known, "wins the lotto". So, if one wants some financial security in 10 or 30 yrs, squirrel it away, starting today!

OK..."Dad" will shut up, now. (Not sure how I got on that freaking rant?! )

NEway, for those with Ballz, GM might be a good bottom feeder play, long with careful watching or maybe some Calls and for those with other Ballz, GOOG might be a brassy short, but your mileage may vary...
GL,md

ShutUp&Deal@FreeAdviceIsWorth?. edu

[statdoc]

Originally Posted by motordavid

you lucky 20,30,40 Sumpins to pack as much away as you possibly can into your company's "plan", 401K, IRA, Roth, et al. Time is on your side,

I am no financial wiz, but I know that you are right. I heard a financial advice radio show last week talking about this. The guy said that if you put away $2000/year x 7 years, in your twenties, then stopped, you would have more at retirement than if you started in your thirties and socked it away every year until retirement. Talking about the concept of compounding interest!

The problem doctors have for that issue is that we have no money in our twenties. We are still in training, running up monster debt, averaging $200k, until we are 30-32.

One of the few really good things about owning your own business is the ability to do more aggressive retirement funds. I have an Simplified Employee Pension (SEP). IRS max on that is >$42k/year. Got to make up for not saving earlier.

[motordavid]

Interesting opinion from today's WSJ on GM's financial woes and potential BK...

Kerkorian Underestimates GM's Woes
Liabilities Are Adding Up,
Assets Can't Fill the Gap;
Dividend Cut Won't Cut It
January 14, 2006; Page B14
Kirk Kerkorian believes a dividend cut will nurse General Motors back to health. The billionaire investor, who owns 8% of the car company, is underestimating the scale of the problem. The hole in the auto maker's balance sheet may be around $47 billion -- enough to wipe out shareholders, savage its debt and further squeeze workers' benefits.

Start with GM's assets. The vehicle operations are losing money -- $6 billion in the first nine months of 2005. But the world's biggest car marker is worth something, provided the bleeding can be stanched. Assume GM could eventually get operating margins up to 3%. After taxes and on a price-to-earnings multiple of 10, the business would be worth $32 billion. That's nearly triple its current market value.

Then there's GMAC, its finance business, in which it's trying to sell a majority stake. Investors expect it to fetch a multiple of 1.1 times book value, or $25 billion.

Finally, there's GM's cash, at $14 billion in the third quarter. But operating losses and restructuring expenses could consume $8 billion of that this year, leaving only $6 billion. Total it all up and there are perhaps $63 billion of assets.

That sounds nice until one looks at GM's liabilities. If all it had was $32 billion of debt on its balance sheet, it might be OK. But it has three other liabilities: pensions, health care and obligations to workers at Delphi, a former subsidiary in bankruptcy-court protection.

The company just reported a $6 billion surplus in its U.S. pension plans. Netting that off against the $9 billion deficit in its foreign plans might suggest an overall deficit of $3 billion. But that's optimistic. The Pension Benefit Guaranty Corporation estimates it would cost $31 billion to fully fund the pensions. That may be pessimistic. But even taking half that figure would boost the total pension deficit to $18.5 billion.


A lot of voters: GM workers assemble Pontiac Solstice vehicles in Delaware.


Similarly, GM itself admits to only $27 billion in unfunded health-care liabilities. But, again, it's too optimistic. GM expects health-care inflation, currently at 10%, will drop to 5% by 2010. Use a more realistic figure like 8% and GM would be left with a total obligation of $47 billion, even after giving it some credit for its latest cost-crunching deal with its union. Then there's the liability to Delphi workers, which GM says could be as high as $12 billion.

Add it all up and the liabilities come to $110 billion -- $47 billion more than the assets.

How to fill the hole? Unless the value of the assets can be miraculously boosted, the liabilities are going to have to be cut -- in bankruptcy. Shareholders would be wiped out. The bonds and workers' benefits, which rank equally, would be savaged. To balance the numbers, they would each have to take a 43% haircut.

That's more than the 31% hit the bond market is anticipating. It would also be hard to persuade workers to accept benefit cuts of this scale. Politicians may well be tempted to intervene. After all, counting GM's retirees and dependents, a million votes are at stake.

Vice Chairman Robert Lutz this week called talk of bankruptcy "a crock." And in Washington, talk of aid is still taboo. But the numbers tell a different story.