GregT

GE Finally Joins Victims of Financial Crisis

While I like the Buffet investment in GE. I wonder if this is the end of the road for GE disappointments. They have been disappointing investors all year. And the communication has been TERRIBLE. Here is the scene. The stock starts going down, GE says things couldn't be better and there are no problems. A week or so later, GE issues reduced guidance, holds their div for the first time in 30 years while claiming that things are still great and they will keep their AAA rating. Of and they have absolutely no commercial paper problems. Then a few days later they annouce the Buffet deal and a stock dilution.

In my book, this is a company that is just short of dishonest and doing the spin doctor thing. Time for a new CEO.

Is Warren Buffett Missing Something?

Wrigley is the perfect inflation protection. Their cost don't go up nearly as much as other types of "candy" like the core products that Hershey and Mars offer. Think about the costs of a pack of gum versus a candy bar for example. Yet, gum "competes" with more inflation prone candy at the check out counter. Thus, Wrigley has been able to increase prices much more than was necessary to cover their own cost increases because Hershey and Mars had to raise prices. Thus, Wrigley is actually a beneficiary of commodity inflation.

I had owned Wrigley and yes I'm happy that we got a nice premium for it in this deal. But quite honestly, I would have rather kept my shares for another 20 years. There are very few companies with the kind of business they have.