Hi everyone,

I don’t know if any of you have been watching GM, but the stock certainly defies any logic as shown by the pricing of its options and its actual stock price.  Several of my clients have talked to me about buying it, as it is so cheap.

I see it the other way, it is very expensive.  Shareholder lose all their investment in a bankruptcy in most cases, so why isn’t GM trading a 10 cents or so?  I actually think that common investors think it is a bargain and that it will come back, even in a bankruptcy.  I saw the same mentality during the United Airlines Chapter 11 proceedings.  I think this stock is worthless, many of the insiders sold during the past months all of their holdings.  That is a sign as well, beside the government taking over, and who would ever want to own stock in a company run by bureaucrats?

I think it is tough to make money with GM right now, as I think it is not possible to short the stock anymore, I guess you could buy puts or sell calls.  Sounds too risky for its potential reward to me.

Feel free to comment.

Cheers,

Patrick