How GM Borrowed a Boom From The Future
When events cause distant future cash flows to be pulled closer to the present, it does not permanently boost a stock’s value. Revenue that otherwise would have been booked over two or three years may have been front-loaded into this year. In the case of GM, a recent profit margin boom was borrowed from the future. When a borrowed-from future arrives, shareholders may be shocked by how rapidly earnings at an auto manufacturing business can fall.