Opportunities During Tough Times

27 May 2009

Yesterday, GM’s deadline for coming to an agreement with its bondholders came and went.  Bankruptcy is now a virtual certainty for the 100 year old car maker.

While tough times have hit companies like GM, opportunity is presented to others.  GM is a member of the Dow Jones Industrial Average – a group of the 30 most influential stocks listed in the United States.  With its impending bankruptcy, who will take GM’s spot on the Dow?

This is a big deal given the number of index funds that are required to hold Dow listed companies in their portfolios.  Whichever company gets added to the distinguished list will undoubtedly see a small pop in their valuation.

Some contenders include Google, Cisco, and Oracle from the technology world.  FedEx or UPS from the logistics services space, or maybe another prominent retailer like Target.

Expect the change soon after a formal bankruptcy announcement is made.

One Response to “Opportunities During Tough Times”

  1. Anil Dilawri

    And the winners are….Cisco and Travelers – http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKJur2r3zEnc

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