Great Call on General Motors! What's Next?

If The Young and the Restless is your style, then watching the saga play out between the U.S. government and General Motors (NYSE:GM), Chrysler, and Ford (NYSE:F) was right up your alley. From the original brash visit of private-jet-riding bigwig executives, to the humbled return of contrite corporate paupers, this story had it all -- big money, hubris, sorrow, tears, and bloodshed. Ok, so there weren't tears -- that we saw -- or bloodshed, but hey, without Victor Newman or Jack Abbott I had to throw something spicy in there.

In the end, General Motors and Chrysler ended up with billions from the government's TARP plan, with the promise that there could be billions more if needed (and it looks like more may be needed). But in the midst of all of this hoopla there were big stock returns to be made, and CAPS member SpockBroker made them. After notching six straight bearish calls on GM -- all of which were correct -- SpockBroker gave a thumbs-up to GM in late November, just in time to catch a 90% jump in the stock. In all, SpockBroker has racked up 182 points on GM and has outdone all 4,800 other CAPS members who have weighed in on the stock.

Although SpockBroker has taken his lumps on CAPS and is currently ranked in the lower half of all CAPS members, he has managed to be correct on 57% of his calls and has some other great picks besides GM. Here's a look at a few of the other prescient picks and their recent performance:

Source: Motley Fool CAPS. Points is by how many percentage points the call is beating (trailing) the S&P 500 index.

So what is this investor looking at these days? Here are a few recent calls on CAPS:

Source: Motley Fool CAPS.

While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer at ArcelorMittal.

Steeling for the downturn
Because ArcelorMittal is the world's largest steel producer, it shouldn't be all that surprising that its stock got pummeled as the economy wheezed its way into the new year. After peaking at over $100 per share in the summer -- when people still believed that the emerging world would be safe from slowdown -- the stock has slid over 75%. At a time when drops of that magnitude -- which are usually reserved for companies that have committed fraud or have no real business -- seem commonplace, investors are left to wonder whether stocks such as ArcelorMittal are now screaming deals or whether irrational exuberance is still being beaten out of the market.

ArcelorMittal founder and CEO Lakshmi Mittal showed up in The Economist's special issue "The World in 2009" and made it very clear that he thinks faster-growing economies such as China and India will continue their rapid growth and even pick up some slack of the slowing developed world. For the CEO of the global steel producer, to say anything else might be like Sonny the Cuckoo Bird saying that there's no longer a reason to be cuckoo for Cocoa Puffs, but he may have a point (Mittal, not Sonny). While emerging-market growth has slowed, it's still expected to continue at a pretty rapid pace. Economies such as China, which are more flexible than ever, may find themselves nimble enough to deal with the rich world's woes.

Should Mittal (the man) be correct, then we should see Mittal (the company) do well going forward, as it feeds the developing world's need for steel in everything from cars to urban infrastructure.

Tuffsledding, one of CAPS' top-performing members, added government stimulus to the equation when hopping on the ArcelorMittal bandwagon back in mid-December, writing:

Steel will recover as governments put stimulus money into infrastructure construction. The current price discounts all the bad news and ignores the long-term potential.

But here's the important question: What's your take on ArcelorMittal? Will it continue to be weighed down by brutal financial markets or will it break out of its funk? Get in the action by clicking over to CAPS. CAPS is absolutely free and already has over 125,000 stock pickers chipping in to find the best stocks out there.

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