llc_kaiba

General Electric: Not Quite a Value Trap, More Like a Value Pit

I agree to what you're sayin' bocaj21...


On Dec 29 09:51 AM bocaj21 wrote:

> Alan's comment is well researched and a good analysis. But he then
> extrapolates illogical conclusions from his data. For one thing,
> he implicitly makes non-analogous comparisons between the balance
> sheets of GE and GM. True, GE shareholders will likely have a tough
> go this coming year, but to intimate that GE could fall into "the
> pit" in 2009 like GM did in 2008, is analyticallly nonsense, given
> that it intimates not only a short-term rocky road, but possible
> demise of a respected global company (in no way like AIG). GE certainly
> will survive the current world economic crisis, though a leaner company
> with less emphasis on GE Capital will result. In the long run that
> is good news for equity holders.
>
> What the current economic crisis has produced is a lack of patience
> and a bias that everything will fail. That actually is the important
> good news -- it means that though bad times continue for the foreseealbe
> future, such negativity is the sure sign of better times are ahead
> for those with patience and knowledge that things are never as bad
> )or as good) as they seem.

The Sears Mistake

Ed Lampert is doing the right thing...you just wait and see. The SHLD is still selling below its underlying value and he's making no mistake by buying those shares back. WEB, on the other hand, is not buying back BRK shares because the market price is still above the tag price he's willing to pay and, besides, he's seeing other great businesses with very attractive tag prices...

Let Buffet Do the Buying for You

Looking at NRG and IR as a whole and knowing WEB's investment approach, these two companies as far as its underlying values are concerned...are selling at a hefty discount.. WEB is getting more on what he paid for...IR's underlying value is increasing over the years and so is NRG...If you're buying these two lower than what WEB paid for then you have a wider margin of safety and higher probability of making a huge gain as long as you're keeping it long term...