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Strategies & Market Trends : Value Investing
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To: bruwin who wrote (24468)7/27/2006 7:59:05 PM
From: CrazyPete  Read Replies (1) of 78750
 
> Yes, it may be making a positive return from issuing bonds, but
> this is at great Expense on its Income Statement.

ipso facto: bozo

Try to take a step outside this discussion for a moment. Consider the following two scenarios:

1. NO ONE understands my simple argument. Yes, yes, I know that GE Capital is cash flow positive. But if GE could just cut out this business unit, GE could add BILLIONS to its bottom line due to lower interest expenses. Of course I understand that profit = revenue - expenses; but I'll ignore the revenue part of the equation for now. There is no glaring inconsistency in this argument, as far as I can see. GE's management must be a bunch of yahoos -- no, criminals -- to overlook this: they seem to describe GE Capital as a successful business unit, and they've actually been trying to grow it! Oy vey!!

2. I might not understand GE's financials.

Which seems more plausible from your point of view?
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