Re: R.I.P. General Motors (1931-2006)

Apr 30, 2006 4 Replies
M

Gee it went up in since yesterday when you said it was only 5% LOL


mike hunt


>
>>If one follows the market they would know GMs share prices are going up, >>not
>>down. I bought shares of GM in 1960 at 40 1/8. When the share price
>>reached 90 1/2 it split two for one. When the share price reached 92 1/4 >>it
>>split again two for one. The current total values of those 40,000 shares >>is
>>around four times what I paid, not counting the excellent dividends GM >>paid
>>for 45 years.
>>
>>
>>mike hunt
>
> That is interesting since GM shares are trading for less now than
> they were in 1962. Even including dividends the rate of return since
> then has been less than 6%, barely better than inflation.
>
>
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>>.
>>>> stock in Honda, Inc. or GM--which company's stock would you choose to >>>> buy?
>>>
>>> I do have some GM. I have no Honda. I also have a couple of oil stocks. >>>
>>
>
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J

What went up yesterday?

(...)

Jeff

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G

Uh, I think that was Jeff. I just made a rough approximation. I said less than 6%. He said 5%. He may be closer than I am but we came to these figures independently using different sources and methods so I think we are pretty close. LOL yourself, it's not us who have been holding on to a crummy stock for forty years. Have fun riding it down.

Here is what Jeff said: Actually, the shares closed at 22.88, which means that your intitial investment at 40.125 is now worth 91.52 (4 x 22.88). Which means that you got an annual return of around 5% (the dividends) for a total return of around 1000% (it takes about 14 years for a something that returns 5% to double in value). Meanwhile, the SP 500 index had a return of about

1700% plus dividends (the value of the S&P index does not include dividends). I assumed of 5%, which is probably generous, considering that the yeild is now 4.3% and one of the highest dividend yields of any large-cap stock.

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J

I get about 6%, because the value of the stock including the dividend doubles every 12 years or so (went up from 2.18 to 22.88 in about 44 years) based on the info you led to me on finance.yahoo.com. My earlier estimate was based on the approximate divident yield and increase in stock price.

(The law of 72 says that if you compound interest or returns, then the value of something doubles in a period of time equal to 72 divided it rate of return, so something returning 6% doubles in 12 years, something returning

12% doubles in 6 years.)

Jeff

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M

We can be glad you are not teaching somebodys kids in a school somepalce, I guess. ;)

mike hunt

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