Hello Captain Jack, Time flies. Now updating this discussion ... Message 15397391
February 22nd, 2001
"Hi Cap Jack, You could be right with $42/shr. For me, it depends on where the low is expected for the AIG, C, ABB, UTXs of this world. I am not decided on the target for these other leaders. But feel if Al attains recovery via liquidity flood, the market will demand a higher current yield on all capital, including equity capital (say the traditional old economy 5% for dividends). GE does not need to meet that yield by letting its price drop, but instead can increase its payout drastically, like all good mutual funds.
"Target price: 20% premium over the sum of its two major parts (finance, manufacturing) when valued at AIG/C and ABB/UTX's future reduced values, and then take 15% off for all the writedowns that will occur when the other Jack steps off the podium, and 10% for the Put premium that got us putted the shares."
... logic still holds, but ABB may have bottomed siliconinvestor.com ;0)
AIG, C and UTX are still way high, and thus same for GE.
Chugs, Jay |
