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Old Wizard

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  • General Electric: Definitely Not A Sell [View article]
    Specifically where would those benefits accrue. As I understand Alstom's business it is all over the world in countries that are stable and unstable. There are probably some economies of scale, but how does that occur in 2015 and 2016?
    May 2, 2015. 11:33 AM | 1 Like Like |Link to Comment
  • Nucor: Looking Past The Headwinds [View article]
    Nucor is a company that the rest of US corporations should emulate. Every employee is in profit sharing, the company subsidizes employee' children's education beyond high school, has not laid off an employee in 35 years, puts every employees' names on their annual report. Further they run with a small board and low administrative overhead, promote from within and have an investment policy that deals both with the short term and long term. I have owned their stock for over 40 years and the existing dividend is greater than my original stock purchase value.
    May 1, 2015. 10:07 AM | 3 Likes Like |Link to Comment
  • General Electric: Pain Purifies [View article]
    No, but GE has sold their appliance business. As far as I 'm concerned the management just can't manage a business that is either very competitive or changing rapidly. Generally a consequence of a personnel policy that promoted individuals to general management who for the most part didn't understand the business they were managing, but understood how to optimize financials to meet short term goals.
    May 1, 2015. 09:55 AM | 1 Like Like |Link to Comment
  • General Electric: Definitely Not A Sell [View article]
    But they have. They made the statement that the Alstom acquisition would be accretive in 2016. What they haven't said is what is the cost per share of the acquisition and integration costs in 2015. As far as I can see, the management is counting on cost take out to realize an accretion from this acquisition. My experience with ownership of a French company is that cost takeout is expensive due to existing labor laws. I think the cost takeout and integration costs could easily be underestimated. We'll see.
    May 1, 2015. 09:48 AM | Likes Like |Link to Comment
  • General Electric: Definitely Not A Sell [View article]
    The fact that oral statements by the management don't match written statements in the annual report is not reassuring. That's why it would be greatly revealing to see an " official" management sanctioned estimate of earnings per share as a function of time for 2015, 2016, 2017. Up to now, my impression is that management has announced so many moving parts that it is almost impossible to hold their feet to the fire. By the way, I have to point out that midst all of these financial engineering announcements there is not even an inkling of a new product announcement.
    Apr 30, 2015. 10:21 AM | 2 Likes Like |Link to Comment
  • General Electric: Definitely Not A Sell [View article]
    How do you get the earnings in 2016. I have not seen any quantitative analysis of the impact of an Alstom acquisition. The best info is a management assertion that it will be accretive in 2016 to thine of six cents a share. Even with less shares outstanding this might be 8 cents a share. I am not sure that this is merely a hoped for result not an analytic estimate, Let me remind everyone that there is an assumed growth in those remaining components in GE. That growth also is an estimate that must be realized in the face of a strong dollar and the existing oil situation. Also dividend freeze is announced for two years. Lots of moving parts to get to a 10% rise in the stock.
    Apr 29, 2015. 10:20 AM | 1 Like Like |Link to Comment
  • General Electric: Pain Purifies [View article]
    The latest cloud over GE and Mr. Immelt is the Algerian 1.8b contract received while Mrs. Clinton was secretary of state. It seems that GE made a substantial contribution to the Clinton Trust around the same time. Mr. Immelt has been asked to release emails from and to Mrs. Clinton concerning these transactions. He has refused. At least one stockholder is now following up. The issue has been the subject of an O'Reilly editorial. Personally, GE' s actions don't pass the smell test and reinforce the notion that Mr. Immelt spends a lot of time fostering crony capitalism rather than new products. In this case, however, he may have gone too far.
    Apr 26, 2015. 08:17 AM | 3 Likes Like |Link to Comment
  • General Electric: Pain Purifies [View article]
    Thank you Glen for doing what ought to be fourth grade math. As I have commented several times in the past and in other SA articles, I would like to see earnings per share estimates for 2015, 2016, and 2017. It is obvious that both profit and outstanding shares will go down as a result of management actions. Earnings per share will undergo significant changes as each macro action occurs. Payout ratios will also vary with each action. How this plays out as a function of time is confusing me, but the fact that management has frozen the dividend for two years gives us a hint that at best the numerator and denominator of earnings per share will change to keep the result relatively constant as a goal. We shall see.
    Apr 24, 2015. 08:47 AM | 1 Like Like |Link to Comment
  • General Electric: Pain Purifies [View article]
    You may wait a long time before you see 30. So far, I don't see any analysis that warrants an increase in the stock price. The Alstom acquisition will not be accretive in 2015, the dividend is frozen for two years, the timing of divestitures and stock buy backs as a function of time is still fuzzy and the earnings per share as a function of time is not quantified for at least 2015 and 2016. The only thing that can drive up the stock price is hype about how good it is going to be.
    Apr 23, 2015. 08:46 AM | 2 Likes Like |Link to Comment
  • GE's Restructuring Pleases Investors And Avoids Other Risks [View article]
    New developments. GE, Immelt, involved with Hillary Clinton in contract in Algeria. Contribution by GE to Clinton foundation after receipt of contract. GE refuses to release emails from Clinton when she was Secretary of State. Certainly doesn't pass the smell test. This is another example of the crony capitalism mr. Immelt had immersed himself with this administration. More concentration on bringing new product to market and less of this would be refreshing.
    Apr 23, 2015. 08:32 AM | 1 Like Like |Link to Comment
  • GE's Restructuring Pleases Investors And Avoids Other Risks [View article]
    I guess as a holder of a large stake in GE, I qualify as an investor. I confess that I don't have enough information to be pleased or not pleased. I have commented extensively about being able to quantify GE's macro financial engineering moves which include divestiture of assets, purchase of Alstom and organic growth of retained components as they relate to earnings per share as a function of time. For example, what do they mean relative to earnings per share in 2015, 2016 and 2017. All I have heard is how the company will be better off. I would like to compel management to quantify their projections of earnings per share. Their statements to date are at best fragmented and confusing. Also it would be useful if a SA article that would attempt to show the projected earnings story as a function of time would appear instead of articles which assert good or bad times based on macro factors that defy quantification.
    Apr 22, 2015. 11:27 AM | 3 Likes Like |Link to Comment
  • GE's Complete Leadership Failure [View article]
    There was a time during the Welch era, where a high pot was could only make one false step and he or she would be cast aside. This policy was then considered to be too harsh by HR and Welch was acquiring a negative image. HR prevailed upon him to institute the second chance policy. Those high pots who attained the GM level and then stumbled were put in limbo or a holding pattern in order to possibly give them a second chance. They generally were placed in GE Capital.
    Many got to manage an acquisition for the second chance.
    Apr 18, 2015. 09:36 AM | Likes Like |Link to Comment
  • GE's Complete Leadership Failure [View article]
    The biggest deficiency that was introduced during the welch era was a demphasis on engineering and manufacturing in favor of financial engineering. Promising young scientists and engineering read the tea leaves and rushed to get masters degrees in business administration. Welch pushed the idea that a manager is a manager and high pots were to be identified early rotated around and made General Managers by the time they were forty. Consequently, many of these folks got to run components that they had not grown up in and learned that financial engineering was the road to personal gain. The legacy of this policy was general continued by Mr. Immelt, since he was a partial beneficiary of the policy. Emphasis on the once envied General Electric engineering ABC course, the manufacturing similar course was systemically deemphasized and the financial training course was in ascendency.
    The systemic change in emphasis dogs the company to this day. Engineering is what converts promising R&D to new product. Knowledge of the business a GM is running is what gives rise to the vision necessary to keep a business viable, oversee new product introduction, given the engineering capability exists. The idea that one continually can buy it when necessary generally doesn't work in any fast paced business or where technology is moving fast.
    Concentration on engines and large generators turns out to be okay because in these components, GE has retained the most engineering competence and the pace of change is slower. Don't know whether the growth in these components will match expectation, but given current management, I doubt we will see the introduction of new products anywhere near what Occurred in the pre Welch Ge.
    Apr 16, 2015. 11:36 AM | 1 Like Like |Link to Comment
  • Why Truckers Are Slow To Embrace CNG Fuel Systems [View article]
    Hello john, in my long list of jobs, I spent over a year traveling the country understanding the common carrier truck business. I visited pretty much all the major long and short haul companies and many of the smaller companies. During this time the industry spent a fair amount testing the the deflectors mounted on the cabs roof to ascertain whether there would be a fuel saving. At the end of a fair amount of experimentation, they implemented the deflectors for about a third of a mile per gallon fuel savings.
    To my surprise, I found the industry was very forward thinking and the old line management was being quickly replaced by college educated managers. In fact I went to Harvard for a dedicated course in which attendance were family members
    for the most part. That was years ago. I believe that the savings that CNG fuel provides will be shared by both carrier and shipper, given that the engine/ drive train provides the necessary capability. Until recently that was an issue.
    By the way, the best operating ratio I found was 85%. That was a company in in Texas. By the way they could actually have done better, if pushed. A company that is
    well run should have an operating ratio that is closer to 90% than 95%.

    Meanwhile, companies like waste management ,FedEx, UPS, ATT etc. are moving toward CNG. For my part buses, fleet vehicles and other such vehicles that return to a central place can 't move fast enough.
    Apr 14, 2015. 11:09 AM | 3 Likes Like |Link to Comment
  • General Electric: The Good, The Bad And The Ugly [View article]
    Is there something magical about share buy backs. It seems obvious that the massive share buy back is to compensate for the loss of earnings per share due to the sell off of GE capital's earnings. In the final analysis won't stock price in the future be tied to earnings per share? Reducing the denominator while the numerator is decreasing is the name of the game. Can't understand where the stock appreciation will come from unless the remaining components are managed competently and grown.
    Apr 14, 2015. 10:20 AM | Likes Like |Link to Comment