tag:blogger.com,1999:blog-5122868.post1866248842603542881..comments2023-12-25T21:11:52.209-05:00Comments on Lead and Gold: The blue-est of the blue chips is looking pretty fadedcraighttp://www.blogger.com/profile/04406916480207918404noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5122868.post-89915008116128736012018-11-03T16:59:46.955-04:002018-11-03T16:59:46.955-04:00The most direct cause of the disaster was the deci...The most direct cause of the disaster was the decision to get into the long-term care insurance business, coupled with under-reserving for the committed benefits...unless one is omniscient, one can't really know those costs, so one should either: (a) be super-conservative, or (b) stay out of that business. GE had plenty of other options for things to focus on.<br /><br />Historically, GE's great growth was initially driven by the electrification of the US and much of the world--they may products for energy generation, transmission, and use. The energy-generation technology (turbines) gave the company a strong starting position in the jet engine business; they were aided by very strong and knowledgeable management in the form of Gerhard Neumann.<br /><br />Healthcare emerged from work done at the R&D center involving X-ray generation tubes and has benefitted from the higher HC spending and the strong trend toward use of imaging. Transportation emerged from electrification technologies, in the form of electric locomotives; these transitioned to diesel-electric.<br /><br />So the company was historically able to take advantage of many upward trends. What is the star or stars to which they have hitched their wagon(s) in the last 2-3 decades? It's hard to see anything comparable to the ones I've mentioned above.<br /><br />One possibility is the 3-D printing ("additive manufacturing") initiative; I'm not sure where this shook out in the recent reorg. They were a little late to this market, in any event.<br /><br />Another is the "Industrial Internet", aka Internet of Things initiative; one would think GE is well positioned here since it actually knows something about the *things*, as opposed to some of the other players. I have an intuitive sense, based on nothing very specific, that too much money was thrown at this and it's too Silicon-Valley-centric.<br /><br />Quite a few interesting things bubbling around in Healthcare, but that's (still, I believe) going away, although existing shareholders will participate in it in whatever its new form turns out to be.<br /><br />I believe most of the Materials business, which is where Jack Welch made his initial mark (GE Plastics) has been divested. So has GE Information Services. <br /><br />Shareholders are understandably concerned about the short term, but as the example of Amazon indicates, the market does care (in at least some cases) about good long-term stories. <br /><br />David Fosterhttps://www.blogger.com/profile/15464681514800720063noreply@blogger.comtag:blogger.com,1999:blog-5122868.post-2120295295028484612018-11-03T02:46:53.313-04:002018-11-03T02:46:53.313-04:00This comment has been removed by a blog administrator.jamesfo8376https://www.blogger.com/profile/04475023307921432593noreply@blogger.com