Fidelity Investments, the largest mutual fund company, has announced it will reopen its Contrafund and Low-Priced Stock funds, to gain new investments to pick up on buying opportunities on significantly discounted stocks available right now and to also offset redemption. Contrafund, and the Low-Priced funds were closed in 2006 and 2003, respectively. Contrafund peaked with assets of $65 billion in 2005, and now to date its fair value has declined by 42.96% as a direct result of the financial crisis, Fidelity’s Low-Priced Stock fund is also down significantly, nearly 46% to date. Both funds are diversified in international short and long term equities. The funds will re-open Dec 16, 2008.

The Contrafund is currently invested in good strong growth companies including Google, Apple, Procter and Gamble, Warren Buffet’s Berkshire Hathaway, HP, and more great companies run by great management. As of the end of November 08, the Contrafund had a beta of 0.98, just below the standard market systematic risk, and a standard deviation of 16.21. Now, this could be a great time to invest in this fund as most people don’t have enough money to go out and purchase the individual stocks. Many of these stocks such as Google, which is trading below exercise prices for employee stock options (closed at $276 today), are deeply discounted right now. The question is will these rebound to pre-credit crisis peak levels? I think they very well could substantially increase for a modest profit in about 3 years from now, but likely not to pre-credit crisis levels. Read the full story

The Boston based mutual fund manager Fidelity Investments has just announced 1,700 more job cuts, bringing the total to 3,000 jobs lost of its 44,000 total work force, or 7% aggregately. The new job cuts will take place threw January to March 2009. Fidelity also cut 800 jobs earlier this year. The new move is part of a cost cutting plan after serious losses as a result of the financial crisis. Click here to view commentary from Fidelity about the financial crisis.

GM is burning cash every month and needs some serious cash to fund operations. That is why it could have really used the $10 million loan from the Fed it was seeking that never materialized. That money GM could have also used to acquire Chrysler. GM still remains as the most likely choice for a Chrysler merger, which would significantly benefit GM because Chrysler actually has a lot of cash on hand. Despite the loan being turned down, GM is now likely trying to be classified as a Bank Holding company so that it can purchase commercial paper from the Federal Reserve’s $700 billion bailout fund.

As world economic volatility and the credit crisis remain active, GM is tightening various restrictions including new financial restrictions from its “captive arm” that is suppose to help dealers financially to sell vehicles. Because of the credit crisis, GMAC (wholly owned subsidiary of Chrysler & GM, 51% and 49%, stake respectively) lost $2.5 billion in Q3 of which $194 million was from auto financing. As GM tries to get cash, it has introduced new GMAC terms that will likely have very negative consequences for dealers and lead to closures. Under the new terms, GMAC will only approve loans from people with a credit score of >700 and it will fund less of the principal meaning buyers will have to put up higher down payments. In addition, GMAC is demanding dealers begin immediate repayment car loans, even on 2007 vehicles that are still on the lot. The biggest concern here is as GM vehicles become more expensive (and people are not spending their cash), sales for dealers will dramatically drop, and dealers could become insolvent because of the new loan repayment terms.

Adding further global economic fears, there are yet more job losses. Toymaker giant Mattel has announced it is reducing its management and professional staff by 8%, or by 1,000 people. Mattel’s sales have increased by 6% to $1.95 billion in Q3, though the toy maker is facing increases costs including recent Read the full story