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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (32315)	10/5/2008 10:38:00 PM
From: gcrispin	Respond to of 78748

After listening to the GE CC last week, I don't think that the financial assets should be spun off. If you haven't listened to it, then you will most likely find it worthwhile. ge.com Of particular interest is the Q&A and the answer to the ML analyst who asked if they are going to have to tap their bank lines. The answer to that question was straight forward. GE has 15 billion in cash and 20 billion in marketable securities. The have 120 billion in committed collections that mature in the next 12 months. They have no exposures to the write offs from the banks. They still will earn 2 billion on the financial side in the third quarter. They don't anticipate tapping any bank lines. (Of course, they did raise capital.) Their problems are having to mark to market 350 to 500 million in securities and future anticipated problems with their private label credit cards. So the financial division, on a relative basis, is outperforming the sector. Of course, the Oct. 10 earnings release will tell more. But I understand your reasoning. I am not familiar enough to comment on the companies you mentioned. But this excerpt from Barrons "Streetwise" column sums up my previous posted reasoning on GE. "One man who seems uncommonly immune to negative reinforcement is, of course, Warren Buffett, who never hesitates to buy things that look cheap and sure doesn't sell things because they go down in price. His recent injections of capital into Goldman Sachs (ticker: GS) and General Electric (GE) -- and the just-released doorstop of a biography of him -- are amply explored elsewhere in this issue (see Buffet's Great; This Book Isn't). What's striking from a market-sentiment perspective, however, is the general skepticism that has greeted the same kind of "Buffett-is-buying" news that used to spur investor euphoria. Mike O'Rourke, strategist with institutional broker BTIG, says, "For 20 years, market participants clamored to follow Buffett into any transaction, and now that he is finally putting money to work, the common response is that companies are giving him too much." The 10%-yielding preferred shares and rights to buy more stock on attractive terms were commonly characterized as "sweetheart" deals that conveyed scant endorsement of the companies themselves -- as in the Breakingviews.com feature in the New York Times headlined, "Buffett's Moves Aren't Stock Tips." Bloggers chimed in with foreboding, if accurate, reminders that Mr. J.P. Morgan Jr., the Buffettesque figure of his day, bought big stocks including GE in the panic of 1929 -- before the crash. Sure, paying 10% on Buffett's billions can't tickle the CFOs of Goldman and GE, but who in this world thinks Buffett would even roll out of bed for a mere 10% return from just any company, even with a sweet equity kicker? And with the Vanguard GNMA mutual fund -- and GE common shares -- yielding more than 5% now, how much less would you figure Buffett would open his checkbook for? Oh, and with the decline in GE's stock below the $22.25 strike price of Buffett's warrants, you and I now share his "right" to buy it there and collect that 5% yield.

To: Spekulatius who wrote (32315)	10/7/2008 12:58:00 AM
From: Spekulatius	Respond to of 78748

GE, FMX, ETP , IBKR, Fax I sold the remainder of GE and my starter in IBKR (actually made a small profit on that one). Purchased back FMX (Mexican brewery and convenience store chain) and ETP (sold higher before). I purchased FAX (foreign government securities, yielding almost 10%), discount to Nav >20%. Fooled around daytrading BWP and WMB at a decent profit. My buying power in my IRA is tapped out for now but I still have quite some cash in my taxable account. Lot's of interesting debt (preferred) around for almost mid teens interest rates. I'll look a bit more into those.