Quick: Name a major American company with an uncertain future and a lot of recent troubles. There's a good chance you thought of General Motors (NYSE:GM), which is hardly the picture of health. After spending plenty of time in the high teens, its stock currently trades in the $20s; back in 2000, it hit $70 per share. You can learn more about its troubles in these articles:

So why did the stock recently jump 8% in a single day? Because Merrill Lynch (NYSE:MER) upgraded its rating on the stock -- all the way from a sell to a buy, with a price target of $37.

The apparent reason for the new optimism about the company is that its employees seem to be responding well to early retirement and buyout offers, which could help the company trim its costs. That's good news indeed for the company, but the final numbers aren't in yet, so those buying now are doing so more on hope than on conclusive evidence.

Check out what Warren Buffett and Charlie Munger had to say about General Motors at the 2005 Berkshire Hathaway (NYSE:BRK-A) annual meeting, as noted by Jason Zweig in Fortune:

Buffett: [GM boss] Rick Wagoner and [Ford chairman] Bill Ford have both been handed, by past managers, extremely difficult hands to play. They're not the consequences of their own doing, but they have inherited a legacy cost structure, with contracts put in place decades ago, that make it very difficult for them to be competitive in today's world . [At GM, you've got] a $90 billion pension fund, $20 billion set aside for health-care liabilities, and the whole equity value of the company is $14 billion. That's not sustainable. ... Something will have to give.

Munger: Warren gave a very optimistic prognosis. Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out the window at the 42nd floor and you're still doing fine as you pass the 27th floor, that doesn't mean you don't have a serious problem. I would want to address the problem right now. They'd better face it.

[Buffett does wish the company well, though. He did his part by buying a Cadillac recently.]

No matter what the big brokers say, there are surely other investments we can make with our hard-earned money that offer better risk-reward trade-offs than GM. Right now, for example, Dell (NASDAQ:DELL) is trading in a price range it hasn't seen for more than three years. Its recent P/E was around 17, and its average P/E hasn't been that low since 1998.

So should you listen to your broker? If you use a full-service brokerage like Merrill Lynch, Citigroup's Smith Barney division, or Morgan Stanley (NYSE:MS), or any brokerage for that matter, think twice or even thrice before accepting their buy, sell, and hold recommendations. Remember that brokerage research (as opposed to independent research) has the potential for many conflicts of interest, since these brokerages often do investment banking for many of the companies they cover. It's better to just digest their research and ideally add it to your own before making up your mind.

Note that even discount brokerages such as Scottrade, TD Ameritrade (NASDAQ:AMTD), and Charles Schwab (NASDAQ:SCHW) offer research these days. You don't need an expensive brokerage in order to get it. If you want to learn more about picking a good brokerage, drop by our Broker Center, which features a handy comparison table and some special deals. (Did you know that many brokerages now offer trading commissions below $12 per trade, and some even below $5?)

Charles Schwab is a Motley Fool Stock Advisor selection, while Dell is both a Stock Advisor and Motley Fool Inside Value pick. Take the newsletter service that best fits your investing style for a 30-day free spin.

Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway and Dell. The Fool has an ironclad disclosure policy.