A Fresh Look at GM

Published on
August 7th, 2018
12 minutes

A Fresh Look at GM

Trade Ideas ·
Featuring David Trainer

Published on: August 7th, 2018 • Duration: 12 minutes

David Trainer, CEO of New Constructs, lays out a bullish trade on GM. He discusses his analysis on the automaker and reveals his key metrics for measuring company performance in this interview with Justine Underhill. Filmed on August 2, 2018.


  • ns
    niall s.
    7 August 2018 @ 10:15
    We have now had two trade ideas on GM one a bull case from David and one a bear case from a Mr Wolfe, not so long ago . Personally I would prefer to hear about companies from either a bull or bear perspective but not both at the same time as it a bit confusing to say the least .
    • YB
      Yuriy B.
      7 August 2018 @ 12:01
      Niall, this is precisely the brilliance of Real Vision. You get to hear intelligent people offer their candid views on the world. Sometimes the views of two of these people conflict and we must each use our own judgement to side with one of them or simply to throw the topic in our "too hard" bucket and not bet on it either way. I for one am grateful to hear divergent views. Thank you RV - please keep it coming!
    • ns
      niall s.
      7 August 2018 @ 15:06
      Yuriy , I certainly hope you are right and it is indeed "brilliance" and not the lack of attention I was suspecting
    • SH
      Steve H.
      7 August 2018 @ 17:23
      Niall, Yuriy is dead right. The beauty of RV is that it brings together a bunch of (on the whole) credible people who will often have very different opinions, not just on individual assets and asset classes but even on seminal issues such as inflation or disinflation, DXY up or down, etc., etc. As for it being confusing......yep, that's why we get paid when we get it right.
    • TN
      Thomas N.
      8 August 2018 @ 00:49
      differing opinions is the core of investing. i love hearing opposing views, as it challenges us to think more critically
    • PD
      Pat D.
      13 August 2018 @ 05:11
      Someone has to take the other side ........... on any trade!
  • ra
    rahul a.
    9 August 2018 @ 20:36
    @1:53 How is GM return on investment capital going up ? graph says otherwise
  • AH
    Andrew H.
    9 August 2018 @ 18:41
    I am trying to be bullish on GM. Getting there, but would love to hear his take on pension issues. Cash flows could be diverted to pension and could cause LT issues under the right adverse circumstances. Something I am missing here?
  • ML
    Murali L.
    8 August 2018 @ 06:11
    David Trainer has been making a bull case on GM for over two years to no avail. In fact, plenty of value gurus have held it for over 6-7 yrs and given up. As Gordon Gecko says, “it’s a dog with a different fleece, still a dog.”
  • AT
    Atul T.
    7 August 2018 @ 21:07
    Except he is Completely wrong on TSLA today!
  • DV
    David V.
    7 August 2018 @ 18:32
    Great interview...except at the end when Justine asked David to break down the trade in 30 seconds, and David went on for a minute and 15 seconds. Justine needs to get a buzzer /J
  • SH
    Steve H.
    7 August 2018 @ 17:32
    Well-argued piece. Other comments have raised some red flags (e.g., China, pensions, production numbers). All I would add is to commend Mr. Trainer's courage if he's shorting TSLA as part of a pairs trade with GM. TSLA's a cult plain and simple, and timing when to short a cult in full flow (up 5% on the day as I write this) is only for the brave. Somewhere recently in the RV Empire Milton 'said' that he's keeping his money well away from TSLA, long or short. The guy's no dummy.
  • GF
    George F.
    7 August 2018 @ 12:10
    Pension Obligations? Back in the day, GM was considered a perpetual losing bet because of the pension and healthcare obligations GM had. FWIW, Tesla has no retirees and I don't think there is any pension scheme.
    • BP
      Bryce P.
      7 August 2018 @ 17:22
      “Pension scheme”????? You really mean deferred compensation.
  • NI
    Nate I.
    7 August 2018 @ 17:21
    The used car glut and the growing consumer loan defaults just don't leave me very excited about the auto makers. Then there is GM Financial. I don't like any business, auto or otherwise, with a product finance arm. The pressure always comes down from the top to make loans and boost sales. That inevitably leads to a debt debacle in the finance arm. Lending needs to happen at arms length. And let's face it, people aren't exactly excited about the GM product lineup. I don't know if GM is really cheap enough to say that all these things are baked in to the price and therefore it can only get better. Maybe.
  • V!
    Volatimothy !.
    7 August 2018 @ 12:53
    GM stopped publishing monthly production numbers earlier this year supposedly because they aren’t accurate enough. They will release them quarterly. Even David agrees you can only fool people a short amount of time.
    • V!
      Volatimothy !.
      7 August 2018 @ 13:00
      I read it in Grant’s. One more thing, they won’t release China numbers. Their biggest market.
  • AB
    Adnane B.
    7 August 2018 @ 11:24
    Seems to me that the bull case for GM is driven by valuation comparison between GM and TSLA. GM and TSLA aren't in the same market, GM sell fossil fuel / combustion engine cars, whereas TSLA is a pure electric car player. The GM long trade shouldn't be a counter TSLA short trade. Anyway, for GM to break higher I believe they have to seriously address the electrical vehicle market and start taking some market share in this new promising industry.