Comments on Chris Marshall's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/chris-marshall/articles http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187907 187907 Wed, 18 Jun 2008 15:26:54 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187461 187461 Wed, 18 Jun 2008 01:06:07 -0400
The good thing with GE is that it has invested in new technologies and industries, though unfortunately mostly through acquisition. If these units survive their acquisitions and continue to be productive, then GE will resume its growth.

The two immediate obstacles are of course the financial and real estate divisions. If these blow up (or if these already have blown up and we are yet to hear about it, not necessarily this quarter) then a higher cost of borrowing coupled with limited access to the credit markets (that would be a new one for GE) would spell game over to the conglomerate in its current form.

Not a zero risk stock anymore.]]> http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187437 187437 Tue, 17 Jun 2008 23:03:24 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187415 187415 Tue, 17 Jun 2008 21:54:38 -0400 In general the analysis is one dimensional. According to Chris the value of a $57 Billion real estate portfolio is supposed to be infered from the sale of one building which was bought at the peak of the real estate boom. Meanwhile, there is no reason to think GE's historically conservative managers used marks that in any way reflect this boom and bust. The reality of the financial division is that conditions are tough, earnings will be strained, but there has been marked improvement since March regardless of whether a landlord in NY went bankrupt.

Yes, locomotives face high fuel costs, but meanwhile the rails are going gangbusters as they benefit from the trade-off from truckers. Again, there are ecenomic challenges, but not exactly the nose dive the SP and analysts suggest.

Yes, indistrials were weak, and this will probably continue, but we are supposed to expect especially dissapointing numbers because management is interested in selling the appliance unit?

Yes, airlines face serious challenges, but the weakness is exagerated here in the US. The average age of the worldwide fleet is getting up there (don't have the figures in front of me), but weakness in the US harly amounts to a disaster waiting to happen when you see the orders coming from UAE, Korea, China, etc. Another post also pointed out the fact that airlines are trading old gas guzzlers for new efficient models.

While I understand the motivation for the recent downgrade, they simply didn't see a compelling reason to rate GE outperform anymore (read 1-3 quarters), but for a certain type of investor GE is ideal: strong & safe dividend, poor investor/analyst sentiment, attractive valuation, and ultimately significant value may be unlocked by restructuing the portfolio over the next several years (the obvious step to begin this process is selling industrials to strategic acquirers, the next would likely be spinning off media after piecemealing certain assets).]]> http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187409 187409 Tue, 17 Jun 2008 21:29:08 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187270 187270 Tue, 17 Jun 2008 16:13:52 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-187014 187014 Tue, 17 Jun 2008 09:59:01 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186967 186967 Tue, 17 Jun 2008 08:57:08 -0400
also, note that any real estate write downs are paper losses only. when the market improves (which it will eventually!) they will have to be written back up.

we should thus focus on operating results. all the other stuff is accounting b.s. in fact, new accounting rules are part of the problem we are now facing across the board!]]> http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186966 186966 Tue, 17 Jun 2008 08:56:10 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186958 186958 Tue, 17 Jun 2008 08:50:24 -0400
Talk about written on a whim...]]> http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186920 186920 Tue, 17 Jun 2008 07:30:40 -0400
Compared to other investments, it seems pretty low risk/high reward to me.]]> http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186903 186903 Tue, 17 Jun 2008 06:25:16 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186889 186889 Tue, 17 Jun 2008 05:39:51 -0400 http://seekingalpha.com/article/80991-lehman-brothers-will-the-share-issue-fail?source=feed#comment-183917 183917 Thu, 12 Jun 2008 04:45:00 -0400 http://seekingalpha.com/article/78900-commercial-real-estate-headed-the-way-of-residential?source=feed#comment-175031 175031 Wed, 28 May 2008 06:54:55 -0400
cap rates in NY are around 5.5% currently, I expect the GM Tower cap rate is around 5.75% - 6.00% ( This is my informed guess ).

A 10% cap rate is great, but difficult to achieve, they tend to be accompanied by short time left on the leases, which means that you may be stuck with a vacant building.

I agree with John regarding the European Pension funds, they are really struggling (I'm based in the UK). If we use the 9% cap rate as a yard stick, and estimate the current cap rate as 6% (for ease), then Commercial Real Estate may be 50% over valued. Potentially this could mean $1.66 Billion of Asset write downs!

I don't believe that they will fall this far, but if recession really kicks in, don't discount the possibility either. Financials are still a one way short bet at this current time, regardless of what the FED and Treasury say.

Chris Marshall

PS: Regarding GE, Did you know that one credit card co in India has a default rate of 16%, so don't bank on emerging markets coming to the rescue of the international banks, they appear to be as self obsessed and stupid, as the rest of us.]]> http://seekingalpha.com/article/78900-commercial-real-estate-headed-the-way-of-residential?source=feed#comment-174728 174728 Tue, 27 May 2008 17:27:38 -0400 http://seekingalpha.com/article/78900-commercial-real-estate-headed-the-way-of-residential?source=feed#comment-174635 174635 Tue, 27 May 2008 13:42:14 -0400 http://seekingalpha.com/article/78837-why-the-us-markets-will-continue-to-struggle?source=feed#comment-174627 174627 Tue, 27 May 2008 13:34:41 -0400
Just to confirm I have no interests to disclose, but I would be short on Financials, Retail (except for Walmart), Property, Automobiles, Airlines and Housebuilding. I am neutral on Commodities and Energy, and long on Materials, and Industrials ( which export over 50% of product - and do not have 45% as Financials (GE)).

Chris Marshall]]> http://seekingalpha.com/article/78837-why-the-us-markets-will-continue-to-struggle?source=feed#comment-174606 174606 Tue, 27 May 2008 13:08:32 -0400 http://seekingalpha.com/article/78900-commercial-real-estate-headed-the-way-of-residential?source=feed#comment-174594 174594 Tue, 27 May 2008 12:52:21 -0400 http://seekingalpha.com/article/78837-why-the-us-markets-will-continue-to-struggle?source=feed#comment-174542 174542 Tue, 27 May 2008 11:46:39 -0400 The world may have passed peak oil. If so, no amount of optimism is going to save the market. Since hundreds of millions of people in Asia can fill their tanks with subsidized gasoline at 45 cents/gal. I don't think the demand for oil is going to wane anytime soon.]]> http://seekingalpha.com/article/78900-commercial-real-estate-headed-the-way-of-residential?source=feed#comment-174456 174456 Tue, 27 May 2008 10:14:57 -0400 http://seekingalpha.com/article/78837-why-the-us-markets-will-continue-to-struggle?source=feed#comment-174388 174388 Tue, 27 May 2008 08:54:18 -0400 Shipping is up big and still climbing.
Agriculture stocks are soaring with no pull back in site.
Railroads are still profitable.
Coal and nat. gas stocks are also reaching higher.
P/E figures are actually lower, indicating profitable companys are oversold and undervalued.
Dividend yields are very juciey in companys with solid profits.
I love free market capitalism. My glass is half full!]]> http://seekingalpha.com/article/78900-commercial-real-estate-headed-the-way-of-residential?source=feed#comment-174387 174387 Tue, 27 May 2008 08:53:44 -0400 http://seekingalpha.com/article/78837-why-the-us-markets-will-continue-to-struggle?source=feed#comment-174345 174345 Tue, 27 May 2008 08:04:40 -0400 http://seekingalpha.com/article/71501-is-general-electric-overvalued?source=feed#comment-153940 153940 Mon, 21 Apr 2008 08:51:25 -0400 http://seekingalpha.com/article/72438-why-i-m-cynical-about-thornburg-mortgage?source=feed#comment-151676 151676 Wed, 16 Apr 2008 12:01:46 -0400 http://seekingalpha.com/article/72438-why-i-m-cynical-about-thornburg-mortgage?source=feed#comment-151577 151577 Wed, 16 Apr 2008 09:51:35 -0400 http://seekingalpha.com/article/72438-why-i-m-cynical-about-thornburg-mortgage?source=feed#comment-151556 151556 Wed, 16 Apr 2008 08:51:57 -0400 as things stand, the company will be dead when the bonds mature. smart guys will have collected nice amounts, mgmt has kept jobs for another few years and you will have lost not only money but valuable time. go figure]]> http://seekingalpha.com/article/72438-why-i-m-cynical-about-thornburg-mortgage?source=feed#comment-151519 151519 Wed, 16 Apr 2008 08:10:13 -0400