Municipal Bond Forum
On General Motors Reports Improved Earnings:
Q
I assume that the article intends to make people feel good about buying GM bonds, but I find it misleading. You left out unfavorable facts that have appeared in the press and are well documented.
A
James A. Klotz responds:
It is unnecessary for us to make investors feel good about their GM bonds, since they are aware of the prices at which they are currently trading. Our clients have enjoyed substantial profits since we started recommending these securities, which occurred at the same time the gloom and doomers had the company heading for bankruptcy in 2005.
Yes, GM is struggling. If it had no problems, the company’s bonds wouldn’t be yielding in excess of 9.00%. Anyone can identify problems. Our job is to determine if there is opportunity amid the adversity.
For months, we saw opportunity where others did not. You’ll notice that today, support for GM is growing. We’re pleased to be at the front of the line.
Start here.
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