What the hell is wrong with GE?
Serious comments much appreciated.
Too big to grow fast-although perhaps some of their recent changes will help.
Over owned, due to popularity of indexing and closet indexers. Remember, the S&P 500 is market-cap weighted, and when you buy the index funds you buy the stocks in proportion to how 'big' they are in the index.
I think this is an issue with many of the 'megacap' index members these days, such as CSCO and MSFT.
If tons of people already own the stock, where is the incremental demand coming from that will push the price up?
Food for thought. Can't explain more now, must get back to work. But will be happy to add more later if you have questions.
350 Billion market cap MSFT 300 Billion market cap
WMT 200 billion CSCO 110 billion. GOOG 125 billion
All but GOOG have done nothing in 8 years. Well maybe that is they were at their value 8 years ago and now they are at the same value. They their market value is so high its a challenge to grow. Hopefully good dividens.
Okay its big, we know that. Earnings are forecasted to be up 15-17% in
2006, which means it is trading at about 17 times next year's earnings.
Remarkable for a company that size. Still AAA rated and yields almost 3%.
I'm not asking for it to outperform the S&P by 50%, but it should at least
perform in line with the market? WMT is suffering from margin
compression, CSCO just paid billions for a silly set top cable box maker and
MSFT is loosing $150 on each XBox it sells, not a brilliant move if you ask
If earnings are forecast to be up 15-17%, then it is already factored into the current market price, to a great extent.
MSFT is CURRENTLY losing 150 bucks on each xbox unit. Their costs per unit are expected to drop significantly as their volume grows, and as well they get a royalty of about 8-9 bucks on EACH game cd that is sold. So....are they really so stupid? The royalty drops straight to the bottom line. Look at the Xbox deficit as merely cost of goods sold to get the 'razor blade unit volume' (i.e. game sales) moving up.
I'll have to double check, but I don't think Gillette (now part of Proctor &
Gamble) needs to wait until someone buys a year's worth of razor blades to
break even. To date, MSFT's home and entertainment unit has lost $7
billion. Now there's talk of AOL purchase from Time Warner. Great, AOL,
the leader in (un)subscriber unit growth. RBOCs and cable is kicking DSL
Anyway, this is about GE. Strong US GDP growth and strong world GDP
growth are still a better reason to own GE than MSFT or CSCO.
MSFT ownes 90% of the software operating system market. Also to break into the home gaming industry is a huge challenge. With all they hype and the product they have produced I think they are on the right track.
Again this is not about the virtues of MSFT.
The Chinese are notorious for copying software. They can't copy a
$150,000 CAT scan or a $350,000 jet engine. GE is an innovative company,
MSFT is not.
Jack Welch retired. He was the driving force behind the company growth,
plus many of his "successors" left and are running other companies.
Skee.. I suppose one could copy software, but MSFT has done well with new security features. One used to take a win 98 disk and use on 100 computers, now you have to damn near call the Pentagon when you change ram or a hard drive.
Their new system is sweet. From what I hear the security is top notch so people are going to buy. The improvements from ME to XP were awesome! Who remembers putting a usb in the computer before XP or a parallel/usb printer. It sucked. So when the new software comes out I will buy and so will everyone else.
Let's keep talking about MSFT and annoy Skee.
MSFT is one of Jim Cramer's favorites, by the way. He probably can't talk about GE since they own CNBC!
It looks like GE has some recent upgrades and the outlook is starting to trend up. It will be interesting to see how they perform over the next twelve months.
Actually the protection software is only corporate so they wont get another lawsuit from Symantic or any other company.