Mrudula Shah

GE Is David Hartzell's Highest Conviction Holding - Here's Why

David,

It's quite possible that Dow may hit 14,000; however, I believe it will certainly go over 12,000. Tell me if I am wrong by next Summer!!


On Nov 24 09:21 PM David Hartzell wrote:

> My e-trade,
> 14,000? I don't know if the Dow will hit that level any time soon.
> I think most people would be thrilled to see the Dow hit-and-hold
> 11,000 by this time next year.
> Thanks! for your comments,
> Dave Hartzell

GE Is David Hartzell's Highest Conviction Holding - Here's Why

Satyr,

I agree with you on Jack Welch. Apparently, you are able to see beyond the ordinary lines, unlike most on this exchange of views. He was just an egomaniac salesman, having vision that hardly matched that of Immelt. I would give an analogy: A used car salesman v/s a good surgeon!! Wall Streeters and the likes liked him because he kept fooling them without these idiots really getting it!!


On Nov 23 09:56 PM satyr wrote:

> So much has been said here that I will not bother giving an opinion
> on GE. The truth usually lies somewhere in the middle. But, nobody
> cares what I think, anyway.
>
> I do have to say, though, that Jack Welch was not as great as many
> people believe. For years, he was the darling of B-schools and considered
> the most brilliant CEO of his time. If you do a little foresnic research,
> what you find is that he hid a lot of problems that were later inherited
> by others. His ego was huge, and that often got in the way of making
> good decisions to undo previous bad decisions. It may be here not
> there in terms of making a current investment in GE, but if the topic
> interest you, do a little research and you find that I am right.

GE Is David Hartzell's Highest Conviction Holding - Here's Why

Sorry, for TYPO. Please read correctly, "the so-called "toxic assets" are going to be proven not so toxic..." thanks.


On Nov 23 12:26 PM Mrudula Shah wrote:

> But GE is shrinking GECC role now. And, Mr. Harzell forgot to mention
> that GE's investments in the HealthImagination(?) and green power
> (including smart grid) will be the furure drivers of profitability
> of its operations, especially in a globalized world. U.S.A. is not
> dead, is mightier than any other nation in the world and still capable
> of leading the world to the new future.
>
> What you stated for GECC's role in GE was true in the past. Stocks,
> especially at this time, are not moving based on what the companies
> did in the past or what condition they were in the past, but on what
> condition they are in now and are doing and are appropriately projected
> to do in the future.
>
> Regarding so-called "toxic assets" problem some are trying to advance,
> it's just "noise". The facts will come out pretty soon, I believe,
> presenting the situation much more optimistic for at least GE than
> being projected by the doubters. With interest rates low, and staying
> low at least till mid 2010, the equities and commercial real estate
> market have become most attarctive at the current depressed levels
> for investment to big money holders. They are quietly putting their
> money in these assets, but piece by piece and in a subtle manner
> to maximize their gain. Thus, the so-called "toxic assets" are not
> going to be proven not so toxic and the federal govt is going to
> get excellent returns on their loans, reducing its account deficit
> tremendously. Bernanke and Geithner are not fools to drag the country
> down and sell to Chinese. And, believe me, they both are much more
> patriotic than given credit for and are doing what is best for the
> country. At this time, a smart investor should separate noise (especially
> from short sellers) from a voice giving a true picture.

GE Is David Hartzell's Highest Conviction Holding - Here's Why

But GE is shrinking GECC role now. And, Mr. Harzell forgot to mention that GE's investments in the HealthImagination(?) and green power (including smart grid) will be the furure drivers of profitability of its operations, especially in a globalized world. U.S.A. is not dead, is mightier than any other nation in the world and still capable of leading the world to the new future.

What you stated for GECC's role in GE was true in the past. Stocks, especially at this time, are not moving based on what the companies did in the past or what condition they were in the past, but on what condition they are in now and are doing and are appropriately projected to do in the future.

Regarding so-called "toxic assets" problem some are trying to advance, it's just "noise". The facts will come out pretty soon, I believe, presenting the situation much more optimistic for at least GE than being projected by the doubters. With interest rates low, and staying low at least till mid 2010, the equities and commercial real estate market have become most attarctive at the current depressed levels for investment to big money holders. They are quietly putting their money in these assets, but piece by piece and in a subtle manner to maximize their gain. Thus, the so-called "toxic assets" are not going to be proven not so toxic and the federal govt is going to get excellent returns on their loans, reducing its account deficit tremendously. Bernanke and Geithner are not fools to drag the country down and sell to Chinese. And, believe me, they both are much more patriotic than given credit for and are doing what is best for the country. At this time, a smart investor should separate noise (especially from short sellers) from a voice giving a true picture.


On Nov 23 11:25 AM jarco wrote:

> Having previously worked for GE and as a modest pension receiver
> followed the company in great detail, I tend to agree with most commentators.
>
>
> GE Capital provided most of the profits and has all but disappeared
> as a contributor and more importantly is still a huge liability.
> Their exposure to a multitude of debt holders including the aircraft/airline
> industry is not only extensive but likely unrecoverable.
>
> GE's linkage to the US economy should worry everyone. The US dollar
> is in serious trouble. Our government is becoming more dysfunctional;
> unable to grasp the root of many problems and unwilling to tackle
> those it sees and likely doesn't understand.
>
> I recommend Tom Freidman's very recent interview with Charlie Rose
> as an educational tool. GE as an investment. Run don't walk away
> from Jeff & Co.

A Tale of Two Markets: Overvalued Stocks and the Declining Dollar

Your view of fundamentals is apparently based on flawed assumptions, especially w.r.t. BAC's assets.. In my view, BAC will come out to be much healthier than analysts with flawed assumptions now think. Let me ask you one thing: Is Paulson less smart than you guys are? Why has he bet billions (and one of the top investments) of his fund?


On Nov 23 07:45 AM TxTim wrote:

> No I just think they are not buying on fundamentals which is basically
> the case for most of the market. If you like casino betting, go to
> Las Vegas. You can at least get free food, a comped room and see
> a lot of eye candy.

GE Is David Hartzell's Highest Conviction Holding - Here's Why

None of the commentators above have personally invested in, studied GE affairs, and actually worked for GE as the author has. Yet, they claim to know better!! Strange. I think they are trying to mislead readers in the game of "shorting"..

A Tale of Two Markets: Overvalued Stocks and the Declining Dollar

Surfgeezer,

To me, you exhibit some common sense, unlike...


On Nov 22 09:35 PM surfgeezer wrote:

> I have to disagree with a great deal of you blog. Yes there are some
> stocks overvalued and your examples are correct, but for every 1
> of those their are 2 with better financials. I would say the run-up
> is more about the panic that set in undervaluing stocks.
> A declining dollar is not good for stocks or bad for stocks. Yes
> they may seem "cheap" in another currency, but if the currency a
> stock is valued in declines the stock declines to those holders who
> live on the other side of the exchange.
> I am glad you put in the entire quote from Mr Bernake. He is absolutely
> correct in we are the deepest pool and that they have a dual mandate.
> That mandate is stability, not artificial strength and I personally
> believe an artificially strong dollar has been our countries greatest
> weakness.
> I do not get your assertion that they are "forcing" people to invest
> in the stock market. The returns from the market have usually been
> higher than CD's or Treasuries. There is always a risk/reward relationship
> in every investment.
> I agree the risk may be being undervalued in muni's or state bonds,
> but again the run up is more a reaction from the panic dumping.<br/>In
> close IMHO the lite volume/ end of year profit taking may cause a
> downturn in prices, that I believe will come back quickly in the
> first quarter of '10. The rest of the world is recovering quickly.
>
> Disclosure: My personal portfolio has no gold and is in high dividend
> foreign stocks in Brazil (EWZ,BRF,CPL), Australia (EWA),Canada(BMO,EBGUF)
> and high dividend US (JNJ,NHI,MMLP) and some emerging market bond
> funds and short term American bonds (not funds) so people know I
> am not pumping anything and merely voicing my strategy.

A Tale of Two Markets: Overvalued Stocks and the Declining Dollar

I will believe if BAC goes down to-morrow and by the end of the week. If it stays about the same or goes up, would you think people who bought are just idiots?


On Nov 22 09:27 PM TxTim wrote:

> A few months ago I looked at BAC's 2Q call report. They had $ 160bln
> of level 3 assets on their Balance Sheet. Overvalued? You bet your
> ass they are.

A Tale of Two Markets: Overvalued Stocks and the Declining Dollar

Stocks like GE and BAC over-valued?!! What a hogwash? GE, for example, was at $30 when the Dow hit 10,000 and stayed above that level until 2008. What does that mean? I would say GE is very undervalued currently if you account for its current better business mix, globalized operations plus market (i.e., global prospects), involvement in the state-of-the-art areas of health-care, green-energy and space-technology, notwithstanding trouble at GECC. But, then, GE already is on its way to shrinkining GECC contribution to its operations, although GECC has been producing profit even now!! Mr. Courtenay has a skewed view of the actual valuation of companies like GE and BRC. I simply hope people like him do not make up portfolio managers or advisors of respected funds. If so, those funds are destined to be mislead>

Market Outlook: What Makes Us Optimistic

Whatever comments are given above for the author, most without fully comprehending the factors the author lays out, may be applied in reverse to the commentators!! Good luck to all!! Just do not forget that the market inflows do not come, at this time, from those who do not have jobs (just 10% world-wide) but those who hold the jobs; and, those who hold their jobs are a lot richer than those who do not and., also, have a lot more cash at hand (like those bankers getting billions in bonuses!!).

Why The Market's Set to Move Lower For the Rest of the Month

I believe the period Elmerraji chose to chart the ternd (Aug-Nov) is too short to predict the future trend (even for the next week). He should have chosen, I believe, a period of a year and then compare the economic condition(s) that are similar to that anticipated for the forthcoming period. Of course, since a lot of traders use such charting, the market is dragged or buoyed depending on what most large traders do. But, since the %ge of volume traded by the traders compared to the total trading (which is likely to be fluctuating) is not likely to be greater, especially during the current portfolio adjustment time and a lot of money still sitting on the side lines, a pull-back, if any, would be small and used by big cats to get in. Thus, in my opinion, the market will be moving sideways more than in large ups or downs. Therefore, instead of making my decision solely based on market movement, I will just evaluate movement of stocks in my own portfolio and guide myself for further action, knowing that many stocks just do not follow the market trend religiously or to the same degree any how.

Why the Stock Market Should Crash

I wonder, for the present-day securities market, how much is it really affected by factors such as U.S. unemployment or average price-earning ratio and so forth in comparison to the free cash available (with thousands of mutual and pension funds) in this globalized world. Monies pour into the market when the fund managers decide to jump in (like monkeys) and drain away from the market when they decide to raise cash, again, like monkeys, especially helped by fast computer softwares. They just use the factors like PE ratios, interest-rate changes, etc. as excuses to move the market in the direction they want and not because of those. To illustrate, even with high unemployment, the market has reached high points currently and in the not distant past. Also, it has reached highs when the interest rates were high as well as low and also when the petroleum prices were high as well as low!! So... where is the true relationship with such factors. All these theories are just a fodder for those who just want to make their own living!!

Is This the Beginning of a New Secular Bull Market?

The analysis is good although it's based on conventional factors and past trends. Modern conditions are significantly different and so will be the immediate future. Globalized trade, technology prominence, computer-assisted fast trading by thousands of mutual funds (outdoing minority individual investors constantly wondering which way to go) and, above all, inexhaustible greed of the rich (exemplified by severalfold increases in salaries and bonuses of bankers and executives the world over, compared to shrinking incomes of masses) are the major factors now affecting the markets and psychology affecting these markets. If you look at the charts (e.g., the Dow index), it can be clearly evident that there are cycles (presently, monthly) where, during each cycle, the market begins from a low, peaks and goes down again before the next one begins. Huge sums of money constantly move in and out of the securities/ bonds and other investment vehicles, i.e., huge and much more frequent trading than in the past. Fund managers all over the world can and are constantly trading through their fast computers and keep adjusting their portfolios and keep moving money in their portfolios to secure and maximize gains. And, of course, a lot of manipulation and unfair trading (through corrupted agents in the exchanges), alongwith mass manipulation by media, are the norms. Every body wants to beat all others, whatever it takes!! In this situation, to predict the market is simply too complex to be done only through some technical analyses based on past trends. My advice: Just take a security, buy what you consider is its low point when you get in and sell when you think you get the return you are looking for or get out at the first sign when it goes in the other direction and move to another well-researched undervalued security. If you get too greedy, this market will give you heart-burns. No science so far; if you follow any, you will be O.K. some times and loose other times and, in the end may be a sore looser.

Time for the U.S. Economy to Reindustrialize

I am pretty sure that this is the idea companies such as GE is gearing itself up for, apparently through state-of -the-art and 21st century industries like health-care (through ultra-modern diognostic equipment manufacturing, research facilities for 21st century drugs and treatments, etc.) and green-energy (wind, solar and geothermal power) and smart-grids. We can't beat the Chinese in the 20th century industries like toys, clothings, TV sets, and such other consumer goods manufacturing. But, to be leading the world in the 21st century industries, we need to have excellent high-tech education, smarter kids and advanced research capabilities. I believe, like Mr. Goldman, that the Obama government is shooting for such a dream come true.


On Nov 15 10:32 AM Mrudula Shah wrote:

> A very good, appropriate and timely thought expressed by Mr. Armstrong,
> which with a bit more sophistication can be good enough to be published
> in magazines like Forbes and The Economist. This is what we need
> to do. Exactly how will be the next step to think and implement.

Trade Deficit with China Rises Again

It will be interesting to see if Mr. Richman digs the trade data further and present a relationship for the total imports from China versus U.S. trademarked products manufactured in China and imported to the U.S.A. This relationship will give us a real idea of wealth drain. China-U.S.A trade bashing through simplistic analyses or analyses using partial data should be left to cheap newspaper writers. In appropriate financial analyses, realistic data based analyses only give a true picture and idea about direction of our economy.