With many once mighty American corporate icons falling like dynamos, who is next? Can mighty General Electric crash and burn?
Is General Electric Next?
- Thread starter Rockslinger
- Start date
GE was down again today to $6.66, not looking good, the dividend $1.24/share, 18.61% might not be safe.
Newsletter writer Dennis Gartman, who made a bullish call on GE yesterday along with several other industrial firms, like U.S. Steel and Alcoa. In a phone conversation, Gartman told me he sold his GE stake this morning as the stock tumbled even while the broader market rallied. "Sometimes it only takes a day to figure out I'm wrong," he said. – Aaron Task
From The Business Insider, March 4, 2009:
We figured that, by now, GE's demolished stock must be screamingly cheap (because people were telling us it was cheap when it was $25). So we looked at the numbers. To our surprise, GE's still not cheap.
Even in its shriveled state, GE is still trading at 17X trailing free cash flow. In a rip-roaring bull market, that might be reasonable (might). In today's market, it's startlingly expensive.
Newsletter writer Dennis Gartman, who made a bullish call on GE yesterday along with several other industrial firms, like U.S. Steel and Alcoa. In a phone conversation, Gartman told me he sold his GE stake this morning as the stock tumbled even while the broader market rallied. "Sometimes it only takes a day to figure out I'm wrong," he said. – Aaron Task
From The Business Insider, March 4, 2009:
We figured that, by now, GE's demolished stock must be screamingly cheap (because people were telling us it was cheap when it was $25). So we looked at the numbers. To our surprise, GE's still not cheap.
Even in its shriveled state, GE is still trading at 17X trailing free cash flow. In a rip-roaring bull market, that might be reasonable (might). In today's market, it's startlingly expensive.
The problem is their financial services business. Other divisions of GE are going fine (or at least as fine as any major manufacturer is doing).
But, GE CAPITAL is the heart of GE. If it dies, the rest of GE dies. Did you know that GE CAPITAL was originally created to invest the vast amount of surplus cash generated by selling lighbulbs?Aardvark154 said:
No, I didn't know that.Rockslinger said:
I'm not saying this would be good (for many different reasons), but if GE had to be reorganized there are a number of viable divisions of the Corporation. Its not as if the entire corporation is valueless.
GE Capital is a classic example of the life cycle of a corporation.
1) Started life as a vehicle to invest surplus cash from the lightbulb business.
2) Is not a chartered bank because it does not want regulators looking them over.
3) Does not raise cheap FDIC retail deposits.
4) Grew in size over the years to a point where it was having problems finding good quality investments to keep growing so it started to invest in garbage.
5) Garbage investments blows up and kills the vehicle.
1) Started life as a vehicle to invest surplus cash from the lightbulb business.
2) Is not a chartered bank because it does not want regulators looking them over.
3) Does not raise cheap FDIC retail deposits.
4) Grew in size over the years to a point where it was having problems finding good quality investments to keep growing so it started to invest in garbage.
5) Garbage investments blows up and kills the vehicle.
GE has another problem. Andrea Mitchell getting their paychecks. You see, her husband caused this mess we're practically all in. I'd find a way to fire her and blacklist her to never work again in her profession......a profession she abused to cause a global crisis. Probably Greenspan's decisions came from her braindead mind while they tapped each others feet, naked in a bathtub.
Gyaos Baltar
Gyaos Baltar
Jack Welch divorced his wife and married someone half his age. And guess what? He is very happy , first with the wife, and second, that he, by sheer luck, escaped the fate of his successor. If there is any doubt about luck, just think of the hits that Buffett is getting.
