Home Value Investing Kyle Bass Bullish On GM, But Still Thinks Japan A Disaster

Kyle Bass Bullish On GM, But Still Thinks Japan A Disaster

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Hayman Capital’s Kyle Bass believes Wall Street’s recent selloff has shown cracks in the Japanese economy.

Kyle Bass: Japanese bonds look ‘terrible’


where are we on japan? in abe nom knicks you saw the hike 3% hike. we’re seeing goods prices move more than 3%. when you have inflation of 1.4 to 1.7 through monetary policy and then you have a tax hike, i think the next inflation prints you see out of japan, the cpi numbers, are to be north of 2, to 2.5, which if you own a ten-year bond that pays you 58 basis points in nominal yield, and you see a 2% inflation print, what are you going to do? the interesting thing in this sell-off in the marketplace in tech and biotech in the u.s. and now the market, and this huge sell-off in japanese equities, the japanese bond market hasn’t gone anywhere. yields haven’t collapsed which is fascinating. their bonds are actually acting pretty terrible given the environment of their equity market. so we’ll see what happens. again the question is, will they lose control of rates or they escape via the currency and we believe the currency will move before the bonds do and we’ll see when the bonds move.

Kyle Bass: Investment case for General Motors

Kyle Bass, Hayman Capital Management managing partner, makes his investment case for General Motors Company (NYSE:GM) despite the litigation the automaker is facing. “GM is taking the right steps to invest properly in the crisis,” says Bass.


it’s our biggest position. and i think that the investment case is unbelievable with gm. they have almost $30 billion of cash on balance sheet, $20 billion of unrestricted cash. when you look at their enterprise value, net of pension liabilities cash and everything i’m talking about, their enterprise value today only about $37 billion. we think they’re going to do $15.5 billion in ebitda this year. it’s trading at almost two times ebitda. it pays a 3.7% dividend deal, when the rest of the s&p pays about a 2, somewhere around there. learn its market cap and ebitda in two years. incredibly low valvation. still the spector of extraordinary litigation regardless of whether they may be protected by bankruptcy, she has to ken feinberg to do something that would involve giving out a lot of money. yes. they’ve set aside between $600 million and a $1.3 billion. think about it in context. they will do right by their customer, invest in the brand, do right by the people wronged by engineering mishaps, whatever they can do. you don’t believe consumers at home will be impacted in their decisions about buying a gm car. i think it would be naive to believe no one would be impacted by their decision to buy a gm vehicle. gm is taking the right steps to invest properly in the crisis and move themselves forward into the new gm and we’re talking about the new gm here where it is a much — i think it’s better operated, better capitalized in a better position for the next ten years than it was in the last ten. and i think they’re addressing these issues and six months from now the issues will be behind them. they’ll have done right by customers, their employees, and historically the automakers trade 4.5, 5 times ebitda. today trading just over 2 and everything looks better and not worse. everything looks better in

Pro defends General Motors: Two sides to every story

CNBC’s David Faber speaks with Kyle Bass, Hayman Capital Management managing partner, about his stake in General Motors Company (NYSE:GM) and why he is still bullish on the beleaguered automaker. The public policy aspect is so difficult to contextualize and understand, Bass says.


let me start with your ownership of the stock. you came on actually i think it was on the phone in early december when you first took a position. after seeing this evidence, and what has been mounting here in terms of the case against gm, why not just say, you know what, i’ll revisit it another time and sell your stake? you know, this is a really difficult issue. we’re talking about deaths and in all auto companies there are roughly 30,000 car accidents a year. there are many deaths caused by car wrecks each year and they’re not moan know causal. there are many variables and inputs that go into people passing away. as you know we lost one of our dear friends and colleagues at hayman about a year ago. it’s an issue that i believe i can empathize with. but when you look at the evidence and watch the congressional hearing and you try to parse through all of the publicly available data there’s interesting narratives that aren’t being told in both the press and in the halls of congress that i think are worth while. they’re worth understanding. for instance when you look at the 13 deaths we’re talking about 13 deaths out of 2.6 million vehicles. there are, you know, 250 million cars on the road today and of those 13 deaths that happened, 12 of them either weren’t wearinger that seat belt or under the influence of alcohol. so again, we don’t know what caused each of these deaths and each of them i think has a multi variable equation that goes into what happened. but i think it’s really important to understand the narrative being told in the press versus kind of the factual narrative that yes, all deaths are tragedies, and human beings seem to think that is tragedies can be prevented or even greater tragedies, but in this case, i don’t think that the narrative is beelg being told. there’s no upside for the press to tell the narrative to drooip drive with your seat belt on and be sober. others would say just because people may have been driving under the influence or not wearing their seat belt doesn’t mean they should get in a car where the air bags and power steering doesn’t work? exactly. the public policy issue is a larger one. you have to think about a statement if a consumer product company or automaker were to deem a human lif infinitely valuable then they couldn’t sell a car. so there is a public policy aspect of this that’s so difficult to context actualize and understand but when you look at nhtsa, nhtsa i would say our auto business, is regulated better than any in the world. ten years ago there were 40,000 accidents per year. now there are 30,000. so — or deaths per year. nhtsa has effectively regulated this business. if you listen to the congressional hearings of gm, the congress people were saying, you should have realized gm that there were 135 complaints over ten years. again, in itself in a vacuum that sounds like a lot. nhtsa gets 45,000 complaints a year. a little less than 4,000 a month. over a ten year time frame they get half a million complaints. it’s very, very difficult. i believe they do — i believe nhtsa does a very good job in trying to understand what causes car accidents and in this case, if there were bad actors, if there were engineers or people in the executive suite of gm that knew and hid this issue. they will be dealt with.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Sheeraz Raza

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.