Warren Buffett Loves Controversy: Why His GM Bet Makes Sense

Warren Buffett seems to have a taste for controversy these days. His latest major investment is in General Motors, the American automotive giant roiled in a recall scandal for the ages. The latest concern is just how big of a fine GM will receive from the Department of Justice. Some experts are saying it will be between one and two billion dollars. But guess what? It doesn't matter. GM has $28 billion worth of cash on its balance sheet, and generates $6 billion of free cash flow a year. Its financial position has never been this good. Tack on the fact that GM is taking market back from Ford and is operating on a much leaner platform, and this stock is a buy. The downside is limited, the risks have largely played out, and the upside is tremendous. Buy GM before the conclusion of the recall inquiry. Because once that's behind them, there's no looking back.