Tillier: Still a Believer in General Motors

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One of the things that life in a dealing room taught me was that admitting when you are wrong is essential if you are to survive as a trader, let alone succeed. We were taught to go into every position with an understanding of where we would accept defeat and, when that time came, to exit quickly and move on.

A decent cut was regarded as a good move, regardless of what happened after. Most active traders understand this (although even after years of following that path, many still destroy their account balance with one instance of stubborn averaging). But for investors who have a longer term horizon, it can be a bit more tricky. Short-term swings caused by news events are a very bad reason to bail on a company that has good fundamental prospects.

At the start of this year, I was convinced that the renaissance in the U.S. auto industry was set to continue. General Motors (GM) had a great 2013, up 41%. Some pullback would be natural, but the economic recovery was (and is) still grinding along. This year, I believed we would see some reduction in the long process of deleveraging that consumers around the globe had been going through. Add to that the renewed focus of U.S. manufacturers on the type of small, fuel-efficient vehicles that are needed in the developing world, and the future looked rosy.

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