Yesterday, in my article "Trading GM," I stated: " Value Line puts out a detailed report on this company. On March 4, analyst Jason Smith issued a "3" Rating for slightly above-average performance out to 2008-2010, and the stock was $36.76. What's happened since March 4 except that the broad equity market pulled back as I had forecasted? Nothing -- fundamentally -- has happened to cause you to throw away your GM stock except that Wall Street and their complicit media friends are hammering the stock as best they can."

Well, in point of fact, something "fundamentally" did happen at GM this week to cause the stock to pull back from the $36 level to the $28 level. Management guided investors down with a new 2005 profit outlook of $1 to $2 a share from $4 or more. Furthermore, GM forecast a loss for 1Q05.

I should have pointed that out to readers.

A vastly lower 1Q05 earnings estimate had already been priced into the market. The very good Value Line analyst had just published (March 4) an estimate for GM of $0.15 for the 1Q05 and $3.75 for the year. So the recent GM guidance was enough of a shock to cause many investors to sell. I admit it.

So, let's project a flat 1H05 (first two quarters) for GM earnings, plus $0.50 for the 3Q05 and $1.50 for 4Q05, to go with a $2.00 full year 2005 earnings estimate. If we add that $2.00 to a three-year past average of $4.93 and a Value Line 2006 projected $5.25, we come up with a five-year average earnings of $4.41.

Take today's GM price of $28.66, and the stock is priced at a very low 6.5 times normalized (smoothed) earnings. But Value Line estimates that the Average Annual PE Multiple is 8.0, which appears reasonable.

It would appear that investors correctly see that GM is (1) under top line revenue pressure from a weak economy, (2) facing an uphill battle with rising interest costs on a very significant debt burden, and (3) has an enormous under-funded pension liability issue to deal with. Hence, the current share price is probably a reasonable one.

As to the future for GM, I'd like to make a couple observations of life.

First off, have you ever seen the phenomenon of TV coverage of an unruly mob scene where the TV crew moves their cameras to a more preferred location, and the mob moves to the glare of the lights? I think we are all aware of the power of the media.

Then a week or two ago, I reported on a CNN interview with the previous century's most eminent broadcast journalist Walter Cronkite, who when asked how could today's journalism could improve, said (and I paraphrase): "Don't try to entertain; stick to facts."

Well yesterday (March 23), I noted in Canada's leading financial newspaper Report On Business that an investor reporter I have met in the past, and have a high regard for, crossed the line. The article headline (B12) reads: "GM woes shake up bond market as debt heads toward junk status."

In that article, Allan Robinson states: " GM's total consolidated debt outstanding was $301-billion on Dec. 31, 2004, compared with $173-billion for Ford Motor Co. By comparison, Standard &Poor's estimates that Canada's total outstanding federal debt is $363-billion."

To position the TV cameras to best attract a bloodthirsty mob, the headline was put under a four-column (8.25 inch by 5 inch) graphic illustrating the GM and Ford logos and the Canadian flag, followed by the bond yield charts and Moody's credit ratings.

Inside the graphic is the statement: "General Motors, which has almost as much outstanding debt as Canada, may soon drop below investment-grade status, relegating one of the world's largest bond issuers to "junk" status."

What an incredibly cheap bit of theatrics, comparing the debt of GM to Canada's.

Nowhere in this major article did I find a bit of investment analysis or balanced reporting. If I had, I might have been told that GM's cash flow per share is greater than it's price per share, which no other Dow 30 component can claim.

I might have read that GM's obligation to repay debts in the next five years is $196.7 billion (as of 12/2004), but that there is a 99.9 percent likelihood the company's revenues in that period will be about $1.7 trillion. Again, how many Dow 30 components can make such a comparable claim?

With respect to the later point, let's compare GM's predicament to the average ROB reader's personal circumstances. Let's just say that the average reader has gross annual earnings of $100,000 or $500,000 over the next five years (assuming a worst case flat line). Do you think you could personally handle a principal debt repayment requirement of $58,000 in the next five years (or less than $1,000 per month)? You betcha.

Well, that would be comparable to GM's situation today.

The question is, do I think GM has challenges? Of course they do. But if you ask if the challenges facing GM today are worse than what GM management has faced at times over the past 20 years, then my answer is a resounding "no!"

If investors have no confidence in GM, then they have no confidence in the U.S. economy to recover and grow. They would have no confidence in the S&P, too, because if they look at a very long-term chart of the S&P 500 overlaid with the GM common stock price track, they'll find probably a 95 pct correlation.

The media today is telling investors that America can no longer compete at manufacturing autos or commercial aircraft or a host of other high value-add products, which just happen to be the best paying jobs, and the strength of the U.S. economy. This is utter crapola.

The media today has been compromised by Humungous Bank & Broker into believing that trading x's and o's on computer screens a la Enron is real wealth creating. This too is utter crapola.

So my question for today is, whom are you going to trust? Is it going to be the media or your common sense?

And just food for thought as I close off this article, I happen to be listening to an "investment reporter" on ROBTV tell the audience that TD Bank is hiring 150 investment advisors to sell credit cards. Think about it " and I mean the script read to us by the newsreader (he's no reporter!) and not the public interest in holding more credit cards, which is another story altogether.

The fact is that the best financial media in this country, which is ROB and ROBTV, have fallen into the trap of perpetuating myths, and for that I hold them accountable as perpetrators in the demise of our capital market system.

You see they have reduced the market to marketing " and in my eyes that's just not acceptable.

At least, when I make a mistake, I own up to it. Regrettably, the Humungous Bank & Broker-sponsored media can't afford to do the same.

One final point; I do not consider GM to be worthy of a core position in one's portfolio. With normalized Return On Equity of less than 10 pct, it fails to meet my requirements, which happen to be 20 pct. I would actively trade GM stock, though because it is a Dow 30 component, and one that is subject to gross errors by traders, often for some of the reasons I have given here.