Ford Motor Company (F), General Motors Company (GM): Is the American Auto Renaissance Over?

As for Einhorn, he argued the bull case for GM back at the October 2012 Value Investing Congress. Einhorn’s argument centered around a reborn GM, with lower costs and manageable pension expenses.

Assuming that they didn’t sell in the last few weeks, Buffett holds 25 million shares of GM; Einhorn holds just a bit more than 21 million.

Should investors sell?

Consumer Reports certainly isn’t the gospel — its rankings don’t dictate sales trends. But shareholders should carefully consider the possibility that the domestic car companies could be going back to their old ways.

There’s also the issue of currency, which should favor Japanese companies over American ones if the yen continues to trade lower against the dollar.

Yet, on the other hand, big names like Einhorn and Buffett still back GM. Further, the average car on the road is over a decade old, indicating that all car companies should see stable demand if for no other reason than required replacement.

American car companies may not have been the flashiest investment over the last few years, but they’ve posted solid returns. Ford shares have more than tripled since the March 2009 lows, while GM shares are up over 40% since July. Will this continue into the future? Only time may tell.

The article Is the American Auto Renaissance Over? originally appeared on and is written by Salvatore “Sam” Mattera.

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