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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (9476)	11/26/1997 10:44:00 AM
From: studdog	Read Replies (1) \| Respond to of 18056

What do you folks think abaout GE? To me, it represents all the secular trends going on, especially the "flight to quality" despite gross overvaluation with respect to expected return and growth. GE is knocking at the door of its yearly high. If it surpasses that high I would consider that a very bullish indicator for the overall large cap market, and would look for a significant advance, setting up an even worse fall when it becomes clear that bond returns will beat free cash generation. If it fails and falls some, then at least my faith in the market is restored a little. Just for fun I calculated the return over three years in terms of cold hard cash generated by GE per share and a bond return. Putting $73 into a share of GE would yield about $12 in actual cash generation over the next 3 years, assuming analysts estimates of 13% eps growth is right and adding in the dividend with a slight increase every year. Of course most of that cash stays with the company but I own the company right? To my satisfaction, that is almost exactly the same amount a 5 year treasury would generate in the same time frame. I believe I would buy the treasury, Karl