Expert: Paul Henneman - 3/7/2010

Question
I see that the GM stock is very low right now ($0.75) and I have a tax return on the way and was considering investing (for the first time) in maybe 500 shares or so for the long run. What is the chances that this could become a $50 or more stock again one day? I've heard people on yahoo answers say don't buy it, but I heard Warren Buffet say to "buy when everyone else is skeptical" should I (would you?) invest $500 or so in GM stock? Thanks a lot, I really want to know.

Answer
Thank you mike for the question!
Unfortunately this is a very difficult one to answer.  GM is in trouble right now, their earnings, market share, and almost all metrics looked at by investors have plunged to historic lows.
If you think that GM can turn it around, and get back the market share and earnings from the past, then yes it would be a good buy. However, if you think that the auto industry is changing as many believe, and that GM is not able to keep up with those changes, then there may even be a question as to GM's ability to survive long term.  GM is currently in bankruptcy, and has received large sums from the US government just to continue operating. Will they successfully come out of bankruptcy? That remains to be seen.
I would consider this a potentially good investment, but very risky. This is always the case with stocks, but even more with something like this: Never invest what you can't afford to lose!
My financial research company currently does not cover GM, due to the bankruptcy status.

I hope this helps at least a little, please do not hesitate to follow up with me if I can offer anything additional,

Sincerely
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com