Category: stocks

General Motors [GM] announced today that they will be cutting about 30,000 US jobs and trimming about $7 billion overall to try to get profitable. [See story] A couple of thoughts from an outsider. I am no expert… but I can pretend to be one on my own site!

– This seems like a bandaid. The big problem in GM is pensions… massive pensions  that hold the company back. Unless they can figure out a way to restructure the pension plans they cannot compete with companies like Honda and Toyota who have lower overhead.

– A brain transfer needs to happen. Here in Romeo we are surrounded by the brains of GM. Engineers who know are deep in knowlesge of the cars, history, design strategies, on and on. But they are also aging baby boomers. In the next 5-6 years, if GM doesn’t get real serious about transferring the knowledge, they are in big trouble when the brains start to retire and hand it over to a group of people under them that are ill-equipped.

– Michigan needs Toyota. [See story] The bottom line is that we have a highly trained workforce and a highly efficient delivery system here in Michigan. Michigan needs to do whatever it can to lure Toyota to build a plant here in Michigan that is union free and profitable.In doing so, this will put more pressure on the Big 3 to get their employee costs under control.

– GM would be protected. There is no reason to think that the government would allow GM to go under. More likely, the Big 3 will end up just like the airline industry… most of them losing money, in and out of bancruptcy, but kept afloat by the government because of the jobs provided and the goods delivered.

I am a fan of Jim Cramer’s Mad Money. And apparently a lot of people are. After his 60 Minutes introduction to the world this weekend… there were millions of people watching him last night.

Well, the story goes that Jim changed his mind on a stock, a stock I own. In his commentary he told people… "AMD has overtaken Intel as the best in breed for semiconductors. Buy AMD." Apparently, a lot of people listened. Today Intel fell 29 cents a share while AMD went up 50 cents a share.

Need another example? He ended his show with a hot tip. He suggested people buy a small no name company called, Capstone Turbine. The company had just inked a deal with Wal*Mart to put in their new super earth friendly power generator that Wal*Mart may or may not put in every store… his advice… BUY BUY BUY!

Well, Capstone typically sells about 1-3 millions shares per day at between $1.50-$3.00. Well, let’s say I invested $5000 in Capstone this morning when the markets opened and sold it shortly before the close… your investment would have been worth $6786.78… a gain of 26% in a single day. That’s the power of media right there.

You think there will be more Mad Money fans after that? Sadly, probably not. People aren’t that bright when it comes to their money.

Today will make 4-5 days of solid returns in the tech industry on Wall Street. With the 4th Quarter rolling along solidly, gas and oil prices headed south, and the holidays fast approaching… I think we’re only beginning to see a big rally in tech stocks. Intel is now at $24.80, up $2 in a week. If chip stocks are up… that means there are a lot of PC’s being manufactured.