Quote:
Originally Posted by Claeren
4 major companies are on the verge of going under:
General Electric
GM
Chrysler
Ford
IF even 1 of those fail how is that not going to induce major panic selling!?
If 1 falls the market drops 10%, if 2 fall it drops 25% (and likely more, as a lot of connected companies start to fail and it becomes clear American market hegemony is dying).
This (as I have said many times) is faaaaar from over people. .
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I hear ya Claeren, but at the same time, we're reaching levels where companies are priced far below their net equity (asset - libabil) which seems to mean that you are getting the profits of the business for free, in addition to getting a good deal for an asset. I see it sort of like a pinball machine which is worth $1000 and is bringing you in $20 a month. If right now, its only making $5 a month but in the future, its going to bring you in $20 a month, would you buy the pinball machine for $800?
I think its real tough to try and predict the absolute lows and the absolute highs. I mean, GM, Chrystler and Ford have been dying for years now, the news here isn't anything new; the only thing that will suffer are paper losses IMO and probably to the suppliers or any industry integrated with automobiles. To me, that should deter someone from buying the good fundamental companies at a fair or value price.