Bloomberg.com: U.S. General Motors

Bloomberg.com: U.S.

Last night on Kudlow and Company, the most overly optimistic business show on the air, the guest were there to hammer GM. In 1982, I noticed a similar situation. The market sentiment was very negative and reporters found market analyst who were willing to declare GM dead. I purchased shares in Chrysler and more than doubled my money in a few weeks. Back in those days I was not very sophisticated and took my profits too quickly. I should have held on for 50 times my money.

Conditions are ripe for a "surprise". The surprise could be a decline in oil prices but an even bigger surprise would be a peak in short-term interest rates. Everyone on the street seems to believe that the fed will raise short rates to 3.75 or even 4.0%.

Such an increase in rates would likely cause huge inflows of cash back to the US as the dollar continued to strengthen. The market bounce could turn into a full blown Bull over-night.

GM is not dead. GM is gearing up for a major change in the auto's produced. The hydrogen "skateboard" is on the way. Those who buy GM today will see excellent returns over the next 5 years. The up-turn may not be real quick but chances are good that the dividend will hold. The dividend is about 1.5 times the rate on taxable bonds! The dividend is taxed only at 15%!

The Big Bull Boom Bubble is on the way. Google and Yahoo are likely to announce outstanding earnings. Positive news about the stock market is coming soon.