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Non-Tech : General Electric (GE) -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (1698)	2/14/2001 9:12:28 AM
From: KevRupert	Respond to of 3256

A lot of hostility from some of the shorts -- re GE! It appears some of them believe GE will be bankrupt in the short-term. Funny how they don't base it upon any facts... :) GE obtains 40% of its profits from GE Capital, which should prosper in a declining rate environment. I believe GE has 1) an average (based upon their comments -- if we take the shorts' comments at face value) management team, 2) a high-weight in index funds, and most large cap mutual funds, 3) a significant buyback plan, and 4) a dividend -- albeit historically low -- that is above the S&P average. One thing the shorts don't have to worry about is a takeover!

To: Arthur Tang who wrote (1698)	2/14/2001 5:13:03 PM
From: Captain Jack	Respond to of 3256

Art-- some companies are easier to swallow than others. CPQ learned that the hard way with digital. A great move o paper but the size caused work ethics to be diluted especially since no one had the balls or brains to unload a bunch of people. Granted its not a fun job,, but is the reason for mergers.. No other company has the ability or experience to digest those added as does GE. This just looks like a project to get Immelt acclaimated before Welch leaves...

To: Arthur Tang who wrote (1698)	2/15/2001 7:03:15 AM
From: Arthur Tang	Respond to of 3256

Many of us are not management types; so I think I should have explained "put in the controls". While GE is strong in management training, knowledge collaboration, and book keeping reports within the hour to consistently improve retained earnings; it lacks controls in that, performance in subsidiaries are not equal. To swallow HON, GE has to formulate direction for each subsidiary(to project revenue growth in market share, vertical integration or diversification) and put in the financial planning. To standardize performance(earnings growth) by putting in the controls. Controls are the allowable spending in each book keeping account(percentage allowance relative to revenue). Strong controllers can do a world of good, if they can adjust daily. Looking for hidden value is easy once the controls are put in. ie., rent in some industry should be less then 2% of revenue. If the subsidiary spends 1% of revenue on rent, the hidden value is 1% more earnings each year. Never look at the cost of acquisition until you look at hidden values(there maybe gold in them hills)