John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: robert b furman who wrote (20365)	11/13/2017 2:26:52 PM
From: John Pitera	3 Recommendations Recommended By roguedolphin sixty2nds toccodolce Read Replies (2) of 33421

Lets's look at General Electric Corp. GE Let's start out with a weekly chart of GE from 01/22/1962 to 01/01/1975... It is clear that prices move dramatically and that buy and hold is not always the appropriate strategy.... holding GE from over various time periods has not been productive since most people do not hold on to companies in perpetuity and if one does then the risk of a the common stock going away does occur. I don't predict this for GE... Management needs to regroup and see what they can do. (Btw. Bob.I know that you have no position in TSLA... it's not your investing methodology at all. ) GE is paying out 85% of there free-cash flow towards their dividend.. which is unsustainable. They have cut the dividend for the 2nd time since the great depression. 40% of the ownership basis is small investors, who are in it for the dividend..and because it back when Jack Welch was running it he maxed out the make the Quarterly earns number and went to an extreme. by the end of his tenure. They had morphed into a finance company that made 70% off it's earnings from it's financial division.. which was not run like C, JPM, GS and MS. It was nice while it lasted. Back in 2000 and 2001 GE was the bench market the issuance of Commercial Paper.. short term notes, like a 90 or 180 day Treasury bill, but it was not back by the full faith of the US Govt and the Federal Reserve, but was backed by GE. GE had 4 times as much commercial paper being issued as a percentage of their capital base. Gross correctly pointed out that the credit markets had become irresponsible for enabling GE to gain so much leverage especially when they were the bench mark for premier blue-chip commercial paper market. short term funding tells so much regarding the condition of any corporate debt. bloomberg.com GE STOCK CHARTS I am not going to make any specific comments regarding these charts.... I shall let readers gleen many possibly many insights. Clearly the company has been under extreme duress. The 1 year stock chart The 5 year weekly chart of GE A 13 year Monthly chart of GE The 25 Year Monthly chart of GE. The Broader view of GE - General Electric from Jan 1962 to today 11/13/2017 GE will probably be thrown out of the DJIA for the 3 time.......and that will probably be time to buy it. marketwatch.com John

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