Brahm

Adding to My GE Position

GE is an excellent company, especially for innovation. However, GE is so large in size that no innovation or improvement here or there is going to make too much difference to its outcome or growth. The second point to remember is that GE is difficult to value, since even during Jack Welch's stewardship it was more image and salesmanship that carried it to the value of about $50 rather than the earnings pace. Third, after all is said and done I had heard/known a while back that about 40% of GE used to be the financial sector. Good financial companies are generally priced at a P/E of about 12, instead of 17 or more. Four, GE has some pretty backward divisions (e.g. appliances) which are just passe in comparison to other independent appliance manufacturing companies. I would not value appliances at P/E 17 or more.

In conclusion, even though I think GE is an excellent company, I will not invest in it just yet. I will watch the market and other developments with regard to GE and its activities. I will consider deploying some money into a GE investment, when I consider there are developments with respect to the company which will make significant difference to its growth potential, or when GE makes an innovation which has terrific potential for ioutlook. on its income.