- We are due for a short rally in the near future due to stocks being massively undersold.
- Look at the fundamentals of the stock, and not just the price.
- We can't look at the 52 week high as an indicator of where the stock should go back to in the near future. That price was probably highly inflated.
- Former CEO golden boy Jack Welch is highly responsible for GE's current woes, since he restructured the company from an industrial one into a financial one.
Monday, March 9, 2009
Link'O'Rama: The Singleling
Only one Link'O'Rama link today, but it's a good one. Jim Jubak's new column asks investors to use this time to determine which stocks are truly great, and which one's were full of smoke and mirrors. Some key points:
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3 comments:
Was GE Capital acquiring bad securitized debt on Jack Welsh's watch?
Welch left in 2004, around the start of this mess, so he may have been involved. I suppose he could have left because he saw the housing bubble coming, but I don't know. I wish I had a definitive answer.
I think the point Jubak was trying to make is that Welch made GE Capital into a core part of their business, which looked good at the time, but now is severely holding down the company.
This article (http://money.cnn.com/2008/10/09/news/companies/colvin_ge.fortune/index.htm) suggests GE got into the sub-prime business in 2004.
This post places much of the initial blame on Welch. Similar to Greenspan, what looked great at the time, set the company up for long term disappointment. http://www.freerepublic.com/focus/news/2203342/replies?c=1
Other articles I have read say the current CEO is responsible for making things worse.
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