General Motors (GM) Indicator
A theory stating that the performance of automaker giant General Motors (GM) is a pre-cursor to the performance of the U.S. economy and stock market. In other words, when people are confident and making money one of the first things they would do is go out and buy a new car. Investopedia Says:
There is still some stalk behind this strategy as there is a correlation between auto sales and the overall economic standing of individuals. But this theory had more weight in the 1970s-80s when GM was by far the largest carmaker in North America. Since then GM's importance to the U.S. economy has declined due to greater competition. Related Terms:
Aspirin Count Theory
Bellwether
Indicator
Leading Lipstick Indicator
Skirt Length Theory |