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April 11, 2008
GE Then and Now
From July, 2004 headlines...
The glass is half-full for Jeffrey Immelt. And then some. The General Electric (nyse: GE - news - people ) chairman and chief executive crowed, "This is the best economy we've seen in years."
We feel like this is a great point in time for the company, and again, we're feeling good about the economy, but more importantly we're feeling good about the strategy and the positioning of the company.
Stock price then: $32.17
...
Stock price now: $32.05
Lookin' good!
For what it is worth, I sold my GE stock in July of 2004 (a week after Immelt told us how good things were). That's when I first turned stagflationary (bearish). Since then, the stock has truly stagnated. Bulls did not make money. Bears did not make money. That has been my worst case scenario all along. The average investment stagnates while inflation robs the purchasing power. I expect more of the same.
The stock now trades at $10.87. No joke. History once again shows that I was too optimistic.
April 20, 2008
Dire Signs
This is why I am sympathetic to the short-term deflationary argument.
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Oil just hit $117 a barrel. This parabolic rise is most likely not sustainable. If nothing else, something is bound to break.
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For what it is worth, it was the debt bubble that originally turned me bearish in 2004. Oil was an afterthought.
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There's that 1974 word again. Go figure. If Harl is right, then we've got a few more years left before things really implode. It would also explain why Soros thinks the commodity bubble is still in the growth phase. That being said, investing in bubbles once they are bubbles might not be the best plan. In my opinion, the low lying fruit has already been picked. You've got to have nerves of steel to go reaching for the fruit towards the top of the pyramid (scheme), um, I mean tree.
This was definitely one of my better calls, using the power of hindsight. That brings us to today's headlines.
February 5, 2009
U.S. economy worst since 1970s: GE's Immelt
"Once you break through '74-'75, you don't stop 'til you get to 1929," he said. "Unlike the other downturns that I've been a part of, this one is faced with limited liquidity. If liquidity exists, it's not coming back readily. That's why the government's role in this cycle is so gosh-darned important."
I think I found the video.
I've watched that video quite a few times so far. I honestly can't stop laughing. Can't you just picture Immelt telling us how the government's role in this cycle is so "gosh-darned" important while simultaneously having his cheeks squeezed as much as his liquidity is? I sure can!
You can either be depressed or you can get a good laugh. The choice is yours. Choose wisely though. Laughter is better than any medicine the government can provide. I truly believe that. It doesn't even cost us so much as a penny either. Embrace it!
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4 comments:
Stag,
Laughter is better than any medicine the government can provide. I truly believe that. It doesn't even cost us so much as a penny either. Embrace it!
I'm trying to laugh it all away, but I have to admit it is not easy. So many have been devastated by this financial crisis. Future plans and dreams are getting crushed.
Serious question (and I mean no offense here). How would you feel if you were blindsided by this crisis? I know I wouldn't be laughing.
So many that played by the rules were ripped off. That to me is the sad part. Even many who took on too much housing debt likely did so because the system encouraged them to. The credit monster needed to be "Fed."
After denial comes fear and anger. I see more and more of it.
mab,
Serious question (and I mean no offense here). How would you feel if you were blindsided by this crisis? I know I wouldn't be laughing.
Here's my very serious answer.
If it's sanity you're after there's no recipe like laughter. Laugh it off. - Henry Rutherford Elliot
Lightening Life's Load
http://www.lightworks.com/MonthlyAspectarian/2003/July/feature7.htm
I know exactly how I'd feel. I worked at Cendant when the fraud hit and took all my "retirement" stock options into the toilet. Several years pay vanished instantly. In fact, the previous day there was a mad rush by the General Manager to get me the largest batch of stock options I had ever received. I remember thanking him profusely only to feel betrayed 24 hours later. In hindsight, it was fairly obvious he was just trying to tie up a few loose ends before the you know what hit the fan.
I was very down and there were times when I was angry. It didn't help that I had just gone through a divorce (she picked up the last of her stuff on my birthday, not that she knew). There were also times when I managed to laugh though. Others did too. I'm reminded of a team that was laid off. They walked past my doorway and said, "Dead men walking." I laughed, albeit nervously and in sympathy. That's exactly what they intended me to do and it worked.
I can safely say that the times I was laughing were much, much better for me than the times I was angry. Further, it is almost impossible to laugh hard and still be angry.
Accept that stuff is going to happen and all that really matters is how you react to it.
Earlier in life, I was bitten by a German Shephard. It required 78 stitches to the face. I had to eat through a straw. I don't remember feeling angry. I do remember feeling lucky to still be alive.
As far as the current crisis goes, I feel blindsided by it every single day. I have no idea whether or not my retirement nest egg has a decent chance of surviving long-term. I feel like I'm walking through a minefield and have made a few lucky steps. There are still a lot of steps to go though. Further, if it doesn't survive, I'll have been out of the job market for so long that I wouldn't be all that employable. Worse, in that environment I'd be competing with millions of others looking for work.
If I couldn't laugh at it I would probably go insane. If I was angry, I'm not even sure who I should direct my anger at. We all seem responsible, or should be. We want cheap goods? No problem, corporations can outsource the work to China and embrace automation. We want to be safe? No problem, Patriot Act. We're running a bit low on money? No problem, stimulus checks. We don't like the high price of oil? No problem, higher interest rates. We want the unsustainable economy to continue? No problem, we'll bail out parts as they fail. Maybe we should watch what we wish for.
Healthy laughter liberates us; it is the sunlight that makes life's heaviness sustainable. When we develop the ability to see the humor in a situation, we gain the ability to handle it.
If I am ever feeling really down, I just remind myself that I could be reasonably happy living in a van down by the river. I like the river and I have fond memories of camping, lol.
When was the last time you had some fun? I frequently pose this question to clients who seem tired, out of balance, and/or bored with their lives. And often, they respond, “I’m not even sure how to have fun anymore.” For many, the ability to let go and allow our childlike self to soar is difficult. Perhaps we never learned to when we were young, or, perhaps, we’ve just forgotten how.
It's a lot easier if you never bother to grow up. That's the case with me. Heck, I made computer games for a living. I can't remember the last time I was truly bored. Maybe that's one reason I'm so cheap. There seems to be an infinite number of fun things to do that are absolutely free, so why should I pay for them? This is also one of my bigger fears of course. What if everyone finally figured that out? The global economy couldn't take the strain.
Run through a sprinkler, blow bubbles, fly a kite, appreciate your life, and allow each experience to become a magical moment.
The first time I was laid off I bought a kite. No joke. I refused to just sit in my apartment and feel depressed. I still run through sprinklers every summer (and try to lure my dog in as well).
In 2004, I remember walking around a local lake with my dog. The sun was out. It didn't feel like it was even remotely possible that we could be heading into some sort of great depression. I wondered at the time if there wasn't someone in the late 1920s walking their dog around a lake and wondering the same thing. I think there probably was, but you know, at least they were enjoying the sun. I was.
It really comes down to how we want to react to life's difficulties I guess. I'm certainly no Saint. I have my bad days. I try not to make them the norm though. This blog is my way of releasing the stress.
As I look back on it, my favorite posts involve taking a trip to get our kidneys stolen. We are so on the path to Candy Mountain.
Maybe I am insane. Perhaps I should be angry. I can't help but laugh though.
Stag,
Thanks for the thoughtful response. Laughter is indeed good medicine.
We are so on the path to Candy Mountain.
I think so. But isn't it funny that so many believe otherwise?
It reminds me of the movie Logan's Run where the older people think they will be reborn rather than disposed of.
I remember thanking him profusely only to feel betrayed 24 hours later.
Betrayal is a common theme in Mario Puzo's books "The Sicilian" and "The Godfather"
A sub-theme is that, by definition, you can't be betrayed by your enemies.
http://en.wikipedia.org/wiki/The_Sicilian
I don't view the government as a deliberate enemy, but Wall Street & monied interests are another story. I'd be worried if our government ever becamed co-opted by the wall street free lunch crowd. I don't know about you, but I can't afford to pay for anymore free lunches.
BTW, a few months ago a lot of the kids in town here were emailing each other "Charlie the Unicorn" videos. It deserves an Oscar.
mab,
It reminds me of the movie Logan's Run where the older people think they will be reborn rather than disposed of.
Logan's Run
http://en.wikipedia.org/wiki/Logans_run
In the year 2000 — critical mass.
The author almost nailed it. It shouldn't have been a book about overpopulation though. It should have been a book about excessive credit.
Logan's Bank Run
It depicts a dystopian future society in which the consumption of credit is managed and maintained in equilibrium by the simple expedience of demanding the death of everyone's financial assets upon reaching a particular retirement age, thus avoiding the issue of overleverage. The story follows the actions of Logan, a Deep Credit Lender or "Bankman" charged with enforcing the rule, as he tracks down and forecloses citizens who "run" from society's toxic assets only to himself ultimately "run" to Congress for a bailout.
Hahaha!
If you don't learn to laugh at trouble, you won't have anything to laugh at when you're old. - Edgar Watson Howe
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