Author Topic: GE Capitals Books  (Read 2014 times)

Uccmal

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GE Capitals Books
« on: March 19, 2009, 04:00:52 AM »
1) Was Warrens debt investment in GE with the parent or with GE Capital?

2) Would he have reviewed the non-public books at GE Capital in determining whether to invest or not?  Or is he betting on the jockey and too big to fail? 
GARP tending toward value


Mungerville

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Re: GE Capitals Books
« Reply #1 on: March 19, 2009, 05:58:20 AM »
I have no idea.  Buffet is betting on the preferred, not the common - big difference.  So he is betting GE can tread water and pay him that interest.  Prem is betting on the common.  I guess Buffet also thinks the warrant might pay off because he said he thought either the GS or GE warrant would be of value sometime in next 5 years - possibly both.

I bought those calls that morning when GE was in the low 6s and sold when it was in the mid 9s a few days ago - so I am out.  Never did any dd, just thought there was too much pessimism around the stock and knew how much it had fallen, got lucky as well.   

arbitragr

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Re: GE Capitals Books
« Reply #2 on: March 20, 2009, 02:43:00 PM »
they get a large portion of their funding from short term commercial bills, so they've been totally screwed on that.

Add to that commercial real estate, which is a large chunk ... and is falling in value. They're trying not to book the accounting values as written down values but rather longer term values, so that it looks better on the BS. CRE usually lags housing and the economy overall.
Tough times.
"worry top down, invest bottom up ..."

Mandeep

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Re: GE Capitals Books
« Reply #3 on: March 20, 2009, 10:33:57 PM »
Wow.. that meeting didn't help the stock price at all.
Management was touting it for like 2 weeks.

Oh well. If GE gets to 7 again, I'll be buying.
I really like it long-term and I think they will continue to be around.
It's a $30 stock selling for 9 b/c of fear.

Thoughts?