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- 16 years of mediocrity (and that’s being generous) from Immelt. GE was the worst stock in the Dow during his time there (www.marketwatch.com/story/ges-stock-is-the-worst-dow-performer-since-immelt-took-charge-2017-06-12) and now it’s no longer in the Dow. I think there was not appreciation of the view that I’ve had on GE that bad/mediocre management, left for long enough, starts to cause rot that’s difficult to turn around. A company having one or two bad years is bad enough; how about 16 years of “the worst stock in the Dow?” I couldn’t believe that Uber pondered Immelt as CEO for a minute, it’s like “dafuq are you thinking?” Only Eddie Lampert has been a worse well-known CEO in recent memory. GE doesn’t exist in a vacuum; there’s tons of peers who have basically run circles around GE for years now and that’s why all the posts on GE were so frustrating – people eager to throw money at a company that hasn’t been managed well for more than a decade while there’s plenty of peers who have treated shareholders well or exceptionally well. It’s like, why not Danaher? That’s only been one of the great companies of the last few decades and a couple of years ago had a spin-off (Fortive) that has done very well and will have another spin-off soon. Or Heico, which had a great quarter the other day?
- Flannery was an uninspired choice. Given the negative effect that 16 years of Immelt likely had on GE’s culture, picking someone from outside the company to offer a fresh perspective would not have been a bad idea. Instead, the person picked is someone who has been at GE since the 1980’s. The market has voted accordingly since he was announced. There was also the massive reinsurance write-off earlier this year where Flannery acted like he was surprised and disappointed. Meanwhile, my question after that became – how many other giant turds were swept under the rug during the Immelt period?
- GE isn’t likely going to 0, but it’s going to be a lot of financial engineering with spin-offs and sales and I think that the end result of that is going to less exciting or much less exciting then people think. I might take a look at the healthcare spin-off if/when that occurs, but I’m not going to own GE to own it and won’t be disappointed if I decide against it after looking at it further.
- It was baffling that people kept saying on here that the dividend cut last November was going to be an “opportunity” rather than asking how the hell a company like GE was in such shape that it was cutting the dividend 9 years into a very considerable bull market. It wasn’t an opportunity, it was a hint at what shitty shape the company was in. Additionally, “but it’s GE!” isn’t a thesis – I don’t think that GE will likely go to 0/fail, but there’s nothing keeping it somehow immune from that possibility because it’s GE.
- This is also a problem: money.cnn.com/2018/01/18/investing/ge-pension-immelt-breakup/index.html
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