GE: We Bring Bad News To Life!

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kadibex1
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GE: We Bring Bad News To Life!

Post by kadibex1 » Tue Oct 30, 2018 11:45 am

Look at the price and news about their dividend. Kodak, then Enron and now GE. Just another reminder of why we're index investors.

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neflyer
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Re: GE: We Bring Bad News To Life!

Post by neflyer » Tue Oct 30, 2018 12:32 pm

GE's fall is stunning, and I'm glad I haven't owned them in a long time, but I wouldn't yet call them a Kodak or Enron. Kodak's core business was rendered all but completely obsolete, and Enron was largely an accounting fiction.

GE Capital was arguably an Enron-level fiction with the benefit of hindsight, so the charge sticks there, but GE also has very real lines of business in aviation, power, and healthcare. There is no technology on the horizon that will replace jet engines or MRI machines, and we're still building conventional power plants all over the world. There may not be a GE as we knew it in 5 years but I would be extremely surprised if any of these product lines drop in the next 10 years the way film did from 2001-2011.

Is there any price at which you'd want in?

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Re: GE: We Bring Bad News To Life!

Post by kayakprof » Tue Oct 30, 2018 12:51 pm

They just hired a new CEO to fix things. He's been very successful at other companies. I heard his potential compensation package as one of the biggest performance based packages in history. So he is very incentivized to perform. It'll be interesting to watch for the next few years.

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Re: GE: We Bring Bad News To Life!

Post by kadibex1 » Tue Oct 30, 2018 2:51 pm

neflyer wrote:
Tue Oct 30, 2018 12:32 pm
GE's fall is stunning, and I'm glad I haven't owned them in a long time, but I wouldn't yet call them a Kodak or Enron. Kodak's core business was rendered all but completely obsolete, and Enron was largely an accounting fiction.

GE Capital was arguably an Enron-level fiction with the benefit of hindsight, so the charge sticks there, but GE also has very real lines of business in aviation, power, and healthcare. There is no technology on the horizon that will replace jet engines or MRI machines, and we're still building conventional power plants all over the world. There may not be a GE as we knew it in 5 years but I would be extremely surprised if any of these product lines drop in the next 10 years the way film did from 2001-2011.

Is there any price at which you'd want in?
I'd buy in at $7 per share.

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Re: GE: We Bring Bad News To Life!

Post by neflyer » Tue Oct 30, 2018 3:51 pm

kadibex1 wrote:
Tue Oct 30, 2018 2:51 pm
I'd buy in at $7 per share.
You may very well get your chance!

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Re: GE: We Bring Bad News To Life!

Post by asset_chaos » Tue Oct 30, 2018 5:31 pm

I wouldn't classify Enron with Kodak, GE, or, say, Sears. Enron was, I believe, a relatively young company that went bust from fraud. Kodak, GE, and Sears are 100+ year old companies that were successful for a century but that finally accumulated a sufficiently long enough string of poor business decisions and maladaptations to changing markets to become shells of their former selves and shrink in market cap. They are recent examples of why there aren't many century old businesses. Sooner or later there are a few missteps, and the business is overtaken by rivals.
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Re: GE: We Bring Bad News To Life!

Post by Grt2bOutdoors » Tue Oct 30, 2018 7:38 pm

neflyer wrote:
Tue Oct 30, 2018 3:51 pm
kadibex1 wrote:
Tue Oct 30, 2018 2:51 pm
I'd buy in at $7 per share.
You may very well get your chance!
$2.50 a share.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: GE: We Bring Bad News To Life!

Post by White Coat Investor » Tue Oct 30, 2018 7:41 pm

neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Is there any price at which you'd want in?
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?

If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: GE: We Bring Bad News To Life!

Post by Grt2bOutdoors » Tue Oct 30, 2018 7:48 pm

White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Is there any price at which you'd want in?
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?

If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
The first rule in investing - never pass up free money. Large cap, mid cap, small cap from time to time the baby is thrown out with the bath water, if you can filter out the noise it can be very profitable. I know folks don’t like to hear it, but Buffett has been very successful and mainly with large and very large companies.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: GE: We Bring Bad News To Life!

Post by Helo80 » Tue Oct 30, 2018 7:51 pm

White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?
High risk, high rewards
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
That would require actual effort and for me to use my brain. :) I can buy GE (or any stock or MF) from my phone over a commercial break.

I know what you're saying, but if you have a feeling GE will rebound under this guy, now is your chance. AAPL's all time low was in the $7 range.

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Re: GE: We Bring Bad News To Life!

Post by BoglePaul » Tue Oct 30, 2018 7:57 pm

Helo80 wrote:
Tue Oct 30, 2018 7:51 pm
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?
High risk, high rewards
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
That would require actual effort and for me to use my brain. :) I can buy GE (or any stock or MF) from my phone over a commercial break.

I know what you're saying, but if you have a feeling GE will rebound under this guy, now is your chance. AAPL's all time low was in the $7 range.
Jack Welch is not coming back.
Last edited by BoglePaul on Fri Nov 02, 2018 8:37 am, edited 1 time in total.

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Re: GE: We Bring Bad News To Life!

Post by nisiprius » Tue Oct 30, 2018 8:02 pm

kayakprof wrote:
Tue Oct 30, 2018 12:51 pm
They just hired a new CEO to fix things. He's been very successful at other companies. I heard his potential compensation package as one of the biggest performance based packages in history. So he is very incentivized to perform. It'll be interesting to watch for the next few years.
Yeah, right. I've heard that one before.

Once at a Fortune 500 company I happened to be working for. About a year before I was let go, and two years before the company declared bankruptcy.

Of course anything is possible.

By the way, what were those other companies? I gather you are talking about H. Lawrence Culp, Jr. His Wikipedia bio only mentions one company before GE, Danaher Corporation.
Last edited by nisiprius on Tue Oct 30, 2018 8:10 pm, edited 1 time in total.
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Re: GE: We Bring Bad News To Life!

Post by LadyGeek » Tue Oct 30, 2018 8:03 pm

This thread is now in the Investing - Theory, News & General forum (news).
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Re: GE: We Bring Bad News To Life!

Post by AlohaJoe » Tue Oct 30, 2018 8:11 pm

neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Kodak's core business was rendered all but completely obsolete
Fujifilm's core business was also rendered completely obsolete. They figured out how to survive.

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Re: GE: We Bring Bad News To Life!

Post by Grt2bOutdoors » Tue Oct 30, 2018 8:19 pm

BoglePaul wrote:
Tue Oct 30, 2018 7:57 pm
Helo80 wrote:
Tue Oct 30, 2018 7:51 pm
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?
High risk, high rewards
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
That would require actual effort and for me to use my brain. :) I can buy GE (or any stock or MF) from my phone over a commercial break.

I know what you're saying, but if you have a feeling GE will rebound under this guy, now is your chance. AAPL's all time low was in the $7 range.
Jack Welsh is not coming back.
Good!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: GE: We Bring Bad News To Life!

Post by munemaker » Tue Oct 30, 2018 8:44 pm

I don't understand why people keep bringing up GE.

Forget GE. It's a stinker. Buy index funds and you will be much better off.

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Re: GE: We Bring Bad News To Life!

Post by kadibex1 » Tue Oct 30, 2018 9:05 pm

asset_chaos wrote:
Tue Oct 30, 2018 5:31 pm
I wouldn't classify Enron with Kodak, GE, or, say, Sears. Enron was, I believe, a relatively young company that went bust from fraud. Kodak, GE, and Sears are 100+ year old companies that were successful for a century but that finally accumulated a sufficiently long enough string of poor business decisions and maladaptations to changing markets to become shells of their former selves and shrink in market cap. They are recent examples of why there aren't many century old businesses. Sooner or later there are a few missteps, and the business is overtaken by rivals.
I was simply using them all as an example of the risk of owning individual stocks.

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Re: GE: We Bring Bad News To Life!

Post by kadibex1 » Tue Oct 30, 2018 9:10 pm

Grt2bOutdoors wrote:
Tue Oct 30, 2018 7:38 pm
neflyer wrote:
Tue Oct 30, 2018 3:51 pm
kadibex1 wrote:
Tue Oct 30, 2018 2:51 pm
I'd buy in at $7 per share.
You may very well get your chance!
$2.50 a share.
Hmmm...I will compromise and buy at $5.

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Re: GE: We Bring Bad News To Life!

Post by averagedude » Tue Oct 30, 2018 9:23 pm

There is a GE plant where i live and i know a few people who retired from there who have huge holding in this stock. Most of them are in the hold and hope mode, hoping one day they will break even. Luckily they are doing fine since they have SSI and rather large pensions from this company. It is yet another example why no one should have more than 10% of their investments in the company they work for.

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Re: GE: We Bring Bad News To Life!

Post by White Coat Investor » Tue Oct 30, 2018 9:32 pm

Grt2bOutdoors wrote:
Tue Oct 30, 2018 7:48 pm
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Is there any price at which you'd want in?
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?

If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
The first rule in investing - never pass up free money. Large cap, mid cap, small cap from time to time the baby is thrown out with the bath water, if you can filter out the noise it can be very profitable. I know folks don’t like to hear it, but Buffett has been very successful and mainly with large and very large companies.
Compare Buffett's return against an index fund over the last 10-15 years. I think you may change your mind. And he's "the best." You're no Buffett and you're trying to do something even he can't do? Good luck. I suggest you take his advice!
1993- By periodically investing in an index fund … the know-nothing investor can actually outperform most investment professionals
2016- Both large and small investors should stick with low-cost index funds.
Yes, there are $100 bills laying around from time to time and you should pick them up, but you'll find very few of them among companies found in the S&P 500 compared to non-publicly traded assets.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: GE: We Bring Bad News To Life!

Post by dodecahedron » Tue Oct 30, 2018 9:35 pm

White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Is there any price at which you'd want in?
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?
In general, and for similar reasons, there is no price at which I buy any individual stock.

And that goes even moreso for GE, because I live in a location where GE is a major employer, and there are many employees and retirees with significant GE-specific human capital and/or GE stock holdings, so real estate values in my town, my property tax bills, and the level of available public services are all unfortunately quite unpleasantly correlated with GE stock prices.

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Re: GE: We Bring Bad News To Life!

Post by whodidntante » Tue Oct 30, 2018 9:50 pm

averagedude wrote:
Tue Oct 30, 2018 9:23 pm
There is a GE plant where i live and i know a few people who retired from there who have huge holding in this stock. Most of them are in the hold and hope mode, hoping one day they will break even.
Unfortunately that is often how people respond when a concentrated holding gets cut off at the knees. Although the primary mistake was having a concentrated portfolio.

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Re: GE: We Bring Bad News To Life!

Post by fortfun » Tue Oct 30, 2018 9:56 pm

AlohaJoe wrote:
Tue Oct 30, 2018 8:11 pm
neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Kodak's core business was rendered all but completely obsolete
Fujifilm's core business was also rendered completely obsolete. They figured out how to survive.
Isn't Kodak in the business of crypto currency now. Guess they figured out how to survive ;)
https://www.coindesk.com/the-kodak-kash ... n-failure/

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Re: GE: We Bring Bad News To Life!

Post by MN-Investor » Tue Oct 30, 2018 9:59 pm

GE is the only stock which I've held for just a single day.

I've dabbled a bit in individual stocks in my IRA, and I bought 500 shares of GE for $23/share on 9/17/2008. The very next day it was up to $25.41, so I sold it. Then, to my surprise, I ended up with a $155 in dividends from it. So, for a one day investment of $11,506, I ended up ahead by $1,347. And no, I haven't been tempted to try to repeat that performance. Once was enough.
The key to success - Save early, save often, invest well.

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Re: GE: We Bring Bad News To Life!

Post by tim1999 » Tue Oct 30, 2018 10:02 pm

I recall in the early 2000s my parents wanted to buy a small piece of land from a neighbor to get better access to part of their property, and the owner was this arrogant early-retiree GE middle management type who kept rebuffing their attempts to make an offer with "I HAVE 50,000 SHARES OF GE STOCK, I DON'T NEED YOUR MONEY NOW OR EVER, GET LOST!" Literally he said that every time they talked to him.

I wonder if he held on to it.

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Re: GE: We Bring Bad News To Life!

Post by dodecahedron » Tue Oct 30, 2018 10:25 pm

averagedude wrote:
Tue Oct 30, 2018 9:23 pm
There is a GE plant where i live and i know a few people who retired from there who have huge holding in this stock. Most of them are in the hold and hope mode, hoping one day they will break even. Luckily they are doing fine since they have SSI and rather large pensions from this company. It is yet another example why no one should have more than 10% of their investments in the company they work for.
If they have large pensions, they do not qualify for SSI. SSI is the official abbreviation for Supplemental Security Income, which are quite stringently means-tested. Presumably you mean Social Security benefits, which are not means-tested. Here is a comparison of the two programs, which are frequently confused.

That said, I do worry about the many GE retirees in my neck of the woods. GE retirees already suffered a major disappointment a few years ago: the company reneged and cancelled what were once very generous retiree health insurance benefits.

The scale of GE defined benefit pension liabilities and the GAO report suggesting that the federal Pension Pension Guarantee Corporation is facing ¨an uncertain financial future¨ would give me pause if I were counting on a significant defined benefit pension from GE.

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Re: GE: We Bring Bad News To Life!

Post by iamlucky13 » Tue Oct 30, 2018 11:28 pm

White Coat Investor wrote:
Tue Oct 30, 2018 9:32 pm
Grt2bOutdoors wrote:
Tue Oct 30, 2018 7:48 pm

The first rule in investing - never pass up free money. Large cap, mid cap, small cap from time to time the baby is thrown out with the bath water, if you can filter out the noise it can be very profitable. I know folks don’t like to hear it, but Buffett has been very successful and mainly with large and very large companies.
Yes, there are $100 bills laying around from time to time and you should pick them up, but you'll find very few of them among companies found in the S&P 500 compared to non-publicly traded assets.
I wouldn't even entertain the analogy to that degree, because there aren't merely few $100 bills laying around to simply be picked up in the stock market. There are none.

Whatever bill you see laying on the ground, you don't actually know what it's value is, and you're not allowed to pick up without first laying down another bill.

If it looks like a $100 bill, but nobody else around you is picking it up, you should probably challenge your reasons for thinking it's a $100 bill before laying down another bill for it. I'm pretty sure Buffet does so - making extra sure it's a $100 bill, or something close, and being careful how much he'll lay down for the opportunity to find out.

The real first rule of investing parallel in a way to never pass up free money, but still very different: buy low, sell high.

And the zeroeth rule is still to diversify.

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Re: GE: We Bring Bad News To Life!

Post by libralibra » Tue Oct 30, 2018 11:35 pm

tim1999 wrote:
Tue Oct 30, 2018 10:02 pm
I recall in the early 2000s my parents wanted to buy a small piece of land from a neighbor to get better access to part of their property, and the owner was this arrogant early-retiree GE middle management type who kept rebuffing their attempts to make an offer with "I HAVE 50,000 SHARES OF GE STOCK, I DON'T NEED YOUR MONEY NOW OR EVER, GET LOST!" Literally he said that every time they talked to him.

I wonder if he held on to it.
Literally, every time? Why would they keep asking?

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Re: GE: We Bring Bad News To Life!

Post by nisiprius » Wed Oct 31, 2018 6:19 am

whodidntante wrote:
Tue Oct 30, 2018 9:50 pm
averagedude wrote:
Tue Oct 30, 2018 9:23 pm
There is a GE plant where i live and i know a few people who retired from there who have huge holding in this stock. Most of them are in the hold and hope mode, hoping one day they will break even.
Unfortunately that is often how people respond when a concentrated holding gets cut off at the knees. Although the primary mistake was having a concentrated portfolio.
The Fortune 500 company I once worked for in the late 1980s didn't institute a 401(k) plan literally until the year I joined. Until then, their "retirement plan" had consisted entirely of giving people grants of company stock, $2,000/year IIRC. I was coming from a nonprofit that contributed about $6,000 a year to my TIAA-CREF plan, above and beyond salary (and my own voluntary contributions), and during my job interview, trying to interpret relative compensation, I blurted out "$2,000 a year? That isn't very much," and the HR person said "I guess that depends on whether you think the stock is worth something." It turned out that the stock had been at about $40/share just a few years earlier. It had slumped to $20/share. While I worked there it kept falling, $14/share, $8/share, and when I was let go it was down to $3/share. The company went bankrupt, reorganized, and promptly failed again. (Employees had their stock exchanged for stock in the new company, I don't know how that worked out, but not well).

It was "interesting" to watch peoples' reactions as they literally watched their retirement savings vanish before their eyes. Remember, company stock had been the only retirement plan, so many long-time employees were 100% company stock and had really substantial amounts. I honestly do not remember anybody saying they were selling. It is just too painful to realize losses that big, very difficult to accept that half a loaf, or a third, or a fifth, is better than none.

A friend in a different high-tech company watched something similar unfold and mentioned the evolution of "the story." It was a high-tech optics company that made step-and-repeat machines for chip production that was losing to foreign competitors. He commented that no matter how low the stock went, there was always a story about why it couldn't go lower. "The Pentagon needs our chips, they won't let us fail" was one. "It can't go any lower, its at book value now" was another. It kept going lower, eventually reaching zero.
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Re: GE: We Bring Bad News To Life!

Post by Rob5TCP » Wed Oct 31, 2018 7:34 am

A small "victory"
A client and friend had a substantial % of her retirement assets in GE (DRIP plus major contributions every month
for decades). When I mentioned about Vanguard/Bogleheads a year ago; she told me about her plan.
Her Father told her eons to go to find good companies and periodically invest in them each month.
GE was 35% of her portfolio at the peak. When she told me it was 20% (at 19 a share). I finally convinced her
to sell 1/2 her shares (she wanted the other half; just in case). She sold at about $17.50 and has watched it
drop since.

Fortunately some of her other stocks did well and that helps (Apple/Facebook among others). She is gradually
moving to index funds (very gradually) and reducing her exposure to equities (2-3 years from retirement and
80% in equities).

Because she had bought so many shares when GE was "cheap"; her overall loss is bad but not horrific.

Small steps in the right direction.
If GE goes much lower; I may buy a few hundred shares for "fun".

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Re: GE: We Bring Bad News To Life!

Post by Valuethinker » Wed Oct 31, 2018 8:33 am

1. don't own too much of your company's stock - a hard limit of 10% of total portfolio

2. don't dabble in single stock investing. Even giants can be laid low

3. don't assume because you know about the company and its products, that this will give you a good steer re share price. GE jet engines dominate the world, but it's the financial side that has sunk them.

4. be suspicious of acquisition-led growth. Can substitute for real growth in a business and in management time and focus.

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Re: GE: We Bring Bad News To Life!

Post by nedsaid » Wed Oct 31, 2018 11:45 am

My guess about GE going wrong is that they lost too many really great people. When you have a program where the bottom 10% of employees get fired every year, this has to have a devastating effect upon morale. Not arguing for lifetime employment or for keeping incompetent employees but my guess is that this program started by Jack Welch went too far. GE might have unknowingly hollowed itself out.

GE at one time was an incubator for executives, the executive training from GE was very good. They developed a lot of talent there. Not sure what happened here. Don't hear so much about six sigma anymore.

I also thing GE fell into the "diworseification" trap and bought businesses it didn't know enough about. For example, why did GE get into Oil Services? Management I think got bored and made decisions for the sake of making decisions. Management needed to focus on actually running the businesses instead of being obsessed with the stock price.

Also GE Capital got to be too large and GE became in effect a gigantic bank. The financial crisis hit them pretty hard. Warren Buffett bailed them out.

It would be interesting to hear from current and former GE employees to see if my suspicions are correct or not.
A fool and his money are good for business.

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Re: GE: We Bring Bad News To Life!

Post by asset_chaos » Wed Oct 31, 2018 6:49 pm

Maybe it's "Curse Of The New HQ", https://www.businessinsider.com.au/poor ... rk-times-1, where spending up big on a new HQ presages the decline of a business. Didn't GE move it's HQ from upstate NY to Boston a couple of years ago?
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Re: GE: We Bring Bad News To Life!

Post by Grt2bOutdoors » Wed Oct 31, 2018 7:30 pm

White Coat Investor wrote:
Tue Oct 30, 2018 9:32 pm
Grt2bOutdoors wrote:
Tue Oct 30, 2018 7:48 pm
White Coat Investor wrote:
Tue Oct 30, 2018 7:41 pm
neflyer wrote:
Tue Oct 30, 2018 12:32 pm
Is there any price at which you'd want in?
There is no price at which I buy any individual stock for reasons illustrated well by recent events at GE and previously at Kodak and Enron. Why take uncompensated risk at great effort when for nearly zero effort you can capture the market returns?

If you're going to put effort into investing, why not use it for less efficient markets like real estate or small businesses rather than US large cap stocks, perhaps the most efficient capital market on the planet? I never really understood that.
The first rule in investing - never pass up free money. Large cap, mid cap, small cap from time to time the baby is thrown out with the bath water, if you can filter out the noise it can be very profitable. I know folks don’t like to hear it, but Buffett has been very successful and mainly with large and very large companies.
Compare Buffett's return against an index fund over the last 10-15 years. I think you may change your mind. And he's "the best." You're no Buffett and you're trying to do something even he can't do? Good luck. I suggest you take his advice!
1993- By periodically investing in an index fund … the know-nothing investor can actually outperform most investment professionals
2016- Both large and small investors should stick with low-cost index funds.
Yes, there are $100 bills laying around from time to time and you should pick them up, but you'll find very few of them among companies found in the S&P 500 compared to non-publicly traded assets.
Ah, but that is where you are mistaken, I would not touch GE with a 2 mile pole. I never liked them when Neutron Jack was loading it up with financial weapons of self-destruction, never liked Immelt and it seems I was right about him - flying empty jets on the shareholders dime and then buying the Alstom albatross. :oops: I do own some individual equities, have for a very long period of time and for the amount of capital invested have done as good if not better than the index on most of them, but just like an index, I've owned a few mediocre stocks too. Indexes guarantee you your fair share of the average market returns less expenses - I hold those too and recommend them all of the time. You recommended investing in what you deem less efficient asset classes - small cap or real estate. Well, folks got burned big time with real estate, real estate can go through boom and bust periods too and not every investor in real estate comes out smelling like a rose, some come out like Pepe le Pew. Small caps are not always a winner either but are great for those who like rollercoasters, they can offer a thrilling ride along the way. My point is, when there are glaring opportunities (i don't think GE is) one should go for it - and that applies in life too.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

RickBoglehead
Posts: 1178
Joined: Wed Feb 14, 2018 9:10 am

Re: GE: We Bring Bad News To Life!

Post by RickBoglehead » Wed Oct 31, 2018 7:39 pm

BoglePaul wrote:
Tue Oct 30, 2018 7:57 pm

Jack Welsh is not coming back.
Neither is Jack Welch.

BeerTooth
Posts: 229
Joined: Wed Nov 24, 2010 3:07 pm

Re: GE: We Bring Bad News To Life!

Post by BeerTooth » Thu Nov 01, 2018 11:10 am

These anecdotes about concentrated risk in your employer's stock reminds me of the stories I heard from Lucent Technologies in Allentown in the early 2000's. A lot of people close to retirement on paper rode that stock all the way down.

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