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Guess Meaning of Mohnish's New License Plate


Parsad
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That is hilarious. 

 

Nice to see a shout out re: the warrants.  I bought into the warrants again (switched to common a while back) last week and plan on adding after reducing some other positions.

 

Parsad, you should ask him what he thinks of the ELR.  It's a beautiful car, and I wonder if it's as fun to drive as it looks. 

 

Maybe someday I will buy a Alfa 4C and put FCANYSE as my license plate.

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Yeah ive been looking around at them but man what a mess of a company and i can scarecrly conceive of a more competitive business.

 

The interesting thing to me is that there has a been a leitmotif in the US markets that appears for the very best large/mega cap investments available.  And this recurring theme is that the best time to invest in these companies that don't necessarily have the best practices (and, frankly, are messes) is when the shit hits the fan and they are forced to change.  Because that's when they start cutting away at the not so nice stuff and revealing the great franchises underneath.

 

So I actually reduced my GM stake substantially after the run up last year (and the talking up of the company by Kyle Bass et al) because I felt that Fiat was a much better run company and because I wasn't so sure about how GM might fare in case we hit some economic air pockets.  I also generally avoid companies that pretty much have hit peak market share in the markets that generate most of their profits.

 

But now I'm very, very interested again because I think GM will be forced to change in a very good way. And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

 

She reminds me a lot of Moynihan exactly because of the PR issues.  Ultimately, though, it's about having someone who can chip away at the bad culture and just get the battleship on the right track, which is exactly what Moynihan has been doing (balance sheet mistakes notwithstanding).  Neither Moynihan nor Barra are superstars, but they're both "company men" who have the right idea of what the company should become.

 

It is weird -- it's like Marchionne: Barra as Dimon: Moynihan. 

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

 

Thanks for those links Plan! It does sound like she is behind the ball on this big time, and selling cars is not like getting people to deposit money in a bank. She needs to be good on the PR front whereas Moynihan didn't need to be good at PR to turn BAC around, he needed to get them out of their legal issues. I don't know if I'd be buying a car from a company with endless recalls.

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

 

Thanks for those links Plan! It does sound like she is behind the ball on this big time, and selling cars is not like getting people to deposit money in a bank. She needs to be good on the PR front whereas Moynihan didn't need to be good at PR to turn BAC around, he needed to get them out of their legal issues. I don't know if I'd be buying a car from a company with endless recalls.

 

Give her some time.  Let's see how she proceeds after all of the recalls have been vomited out.  We're judging her too quickly.

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

 

Thanks for those links Plan! It does sound like she is behind the ball on this big time, and selling cars is not like getting people to deposit money in a bank. She needs to be good on the PR front whereas Moynihan didn't need to be good at PR to turn BAC around, he needed to get them out of their legal issues. I don't know if I'd be buying a car from a company with endless recalls.

 

Give her some time.  Let's see how she proceeds after all of the recalls have been vomited out.  We're judging her too quickly.

 

Fair enough.

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

 

Thanks for those links Plan! It does sound like she is behind the ball on this big time, and selling cars is not like getting people to deposit money in a bank. She needs to be good on the PR front whereas Moynihan didn't need to be good at PR to turn BAC around, he needed to get them out of their legal issues. I don't know if I'd be buying a car from a company with endless recalls.

 

Give her some time.  Let's see how she proceeds after all of the recalls have been vomited out.  We're judging her too quickly.

 

Fair enough.

 

Isn't she the product of the culture we are talking about changing?

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toyota has been recalling like crazy in the last few years also. somehow people still see it as a quality automobile. i'm not sure if the kill count is as high though.  but it seems you can sell faulty cars and have people still like you. there is still hope if they get the pr and marketing right.

 

choosing a bank is a lot less emotional(at least for me).

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And I think that Barra probably is the right person to make sure that this change occurs.  She's like the Moynihan of GM -- at least, that's the hope.

 

Not a ringing endorsement some in this board would say (not me as you know).

 

I actually think Mary Barra is behind the ball. She better start doing a better job.

 

 

Thanks for those links Plan! It does sound like she is behind the ball on this big time, and selling cars is not like getting people to deposit money in a bank. She needs to be good on the PR front whereas Moynihan didn't need to be good at PR to turn BAC around, he needed to get them out of their legal issues. I don't know if I'd be buying a car from a company with endless recalls.

 

Give her some time.  Let's see how she proceeds after all of the recalls have been vomited out.  We're judging her too quickly.

 

Fair enough.

 

Isn't she the product of the culture we are talking about changing?

 

She's certainly a GM lifer, but that doesn't mean she has absorbed and represents the old culture that needs to be changed.  Instead, I think she is in the perfect position -- as a lifer -- to really understand how to make the changes necessary.

 

There is no way that Ed Whitacre, who was not an auto industry exec at all, would have approved of Barra if he thought she was simply a product of the old GM culture.

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Could someone please enlighten me on how the Warrants at today's quote are superior to the common stock ?

 

There is very little premium to the warrants, so they basically let you "borrow" money for an intermediate term (about 5 years on the B warrants) for a little more than the dividend yield. It is very cheap leverage for a decent time-frame with no collateral requirements (no risk of margin call or anything). If you think the analysts are right about 2015 earnings, GM is only trading at 7x that. It is easy to see how this can be a huge winner if you are borrowing at around 4% and buying something at 7x earnings. Of course, if you intend to have low market exposure, it would probably make sense to hold less cash and more GM common than to hold more cash and GM warrants. No need to pay any borrowing cost at all in that scenario. But for those that want a large GM position and the ability to put cash to work elsewhere, GM warrants is a very cheap way to do that.

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Could someone please enlighten me on how the Warrants at today's quote are superior to the common stock ?

 

 

 

 

Class B warrants, cost: $15.77, Strike : $18.33 , Common has price: 33.31. You are paying only slightly above market price

 

cost of warrant + strike price = total outlay

15.77                + 18.33          = 34.1

 

It totally depends on your outlook for the stock. You are paying very less leverage cost at today's market price to hold the right to buy GM stock in 2019

 

Ideally i would love to get Mohnish's average price ( roughly $11 based on his filings, i could be wrong ).

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