Don't believe analysts

At least some of them! Here is a nice example: on July 22,2008, JP Morgan auto analyst advised to buy General Motors Bonds. (See the Reuters article ) At this time, the 7.2 bond expiring in 2011 was trading at $72, a bargain according to this analyst. Well, less than 5 months later, it's now trading at $27.5, 63% lower!!


Source:Bloomberg

What was the analyst thinking? GM has not been profitable since 2000, that's eight years!


Source:Fortune

In 2006, Carol Loomis, Fortune columnist, was already explaining why GM was heading for a wreck. What has changed since then?

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