Tulls19

Buffett Buys GE, Goldman: Should You Follow?

I own GE stock and am contemplating selling at a huge loss out of anger and doubt about what this company is really worth and here is why.

1. GE's annual report tells us that the company is strategically positioned around the world. OK so they are positive that they are strategically positioned around the world and yet earlier this year Imelt or Omlet as I like to call him couldn't even get their earnings right in pre-release statements and sent the share price down 16% in ONE day.

2. NBC has failed to keep up with Fox news in the ratings. To figure out why I took a look at their news coverage and what do you know. The chearleading for Obama going on on that network will alienate all but the far left for years to come. If you don't believe me try listening to Keith Oberman for 5 minutes with an open mind to the center and right's points of view. I wrote to them to complain and had the privileged of receiving a form letter and I started seeing more of Oberman than ever before. So sadly I have have and unrealized loss of 6K on GE stock and I watch Foxnews because not even when it is in my own economic self interest can I bring myself to tolerate even 5 minutes of Obermans smugness.

3. GE bought back Billions of dollars worth of shares in the high 30's and has now issued 12 Billion dollars worth of common and up to 6 Billion worth of preferred at the low 20's mark. So basically the company has squandered billions worth of capital that would have served the shareholders more had it been dispersed in dividends and now Buffet is being paid to take the risk while the common shareholders have been diluted. Keep in mind that the dividends paid on these new issues will be weighing on earnings for the duration of there existence as will the $4 to $1 debt ratio the company has to finance and pay interest on.

4. With the debt that the company is carrying and the credit market frozen you would think that the liquidity received from recent offerings would be a boon and would be kept for the time being to insure that AAA credit rating on GE capital and yet Omlets press release mentions only the potential acquisitions that GE could make with this money. Yes we have seen how competent thay have been at capital allocation so far.

In the end I have no one to blame for my investment but myself but I would urge anyone thinking about investing in GE to think about whether GE is really looking out for its shareholders given my experience with them so far.