Blog > US Stocks and Markets > General Motors (GM) and the creative class
 | Email This Article Email This Article  | 

General Motors (GM) and the creative class

Posted August 20, 2008

"Invest in the companies with creative people and atmospheres and you will make money.  It is as simple as that. Just look at Google (GOOG:NASDAQ), or 3M (MMM:NYSE), or even Harley Davidson (HOG:NYSE) and its new manufacturing “cell” technique." — Andrew Snyder

by Andrew Snyder

Baltimore and Ketchikan, Alaska (TFN) – When you spend your summers in a temperate rainforest like the one in Southeast Alaska, you had better take a good library of books.

Rainy-day reading gets a whole new meaning up here. The eighteen inches of rain that’s making headlines in Florida is another typical summertime week up here. It gives me the chance to read some great books.

Right now, I’m finishing up an interesting piece by Richard Florida called The Rise of the Creative Class. It reminds me more of one of my old MBA textbooks than a literary masterpiece, but it helps to shed some new perspective on old business practices.

Create your own riches

During the last decade, the way we invest has dramatically changed. Thanks to the internet and its ability to instantly spread information and news, the stock market has virtually become an equal playing field. The traditional method of finding fundamentally undervalued stocks is outdated. 

Sure, the old style of investing will make you money here and there, but chances are something else is working behind the scenes, something like a new manufacturing technique… or a new and innovative product… or a new way of selling an innovative product. All of these profit-making notions are the inventions of creative people.

Invest in the companies with creative people and atmospheres and you will make money.  It is as simple as that. 

Just look at Google (GOOG:NASDAQ), or 3M (MMM:NYSE), or even Harley Davidson (HOG:NYSE) and its new manufacturing “cell” technique. All of these companies nurtured a creative work environment – in fact, 3M made it mandatory – that led to huge, industry-changing innovations. Better yet, creativity made their investors serious sums of money.

One of the nation’s largest companies is struggling mightily with the notion of creativity. General Motors (GM:NYSE) has been shoved aside in the automotive industry. Toyota (TM:NYSE), a company where even low-level assembly line workers are asked to be creative, is beating the pants off the so-called great American company. Now, GM is in a horrific position:  Be creative or go bankrupt.

The never-ending question

So, will GM be able to fight the headwinds and make it back to profitability? Is it a good investment? If it can find the right creative people (tap the creative class you could say), the sky is the limit.

For evidence, just look at the car company’s continuous fight to perfect the next big alternative-fuel innovation. Detroit is spending hundreds of millions of dollars to uncover the best energy-stingy car both for the environment and the market. 

I must say, GM is getting downright creative, especially considering its latest creation is based on a battery that has yet to be developed. Thinking this far out of the box is uncharted territory for most huge American companies. 

I go against most financial pundits when betting on General Motors, but I know the company will find its way back to the top. It realizes the intangible value of a creative company and a creative atmosphere. 

There are countless other companies in a similar position to GM. All of them will make investors money. 

When researching a potential investment, be sure to go beyond basic fundamental and technical analysis. Those are great research foundations. But the investors that can realize the intrinsic creative potential of a company will make the real money. 

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. You can pick your favorite reader. Or if you prefer, you can have the feed delivered to your email.

Related Articles


Posted by Andrew Snyder · Filed Under US Stocks and Markets 

Comments

close Reblog this comment
Powered by Disqus · Learn more
blog comments powered by Disqus