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Time to Man Up on GE


Analysts need to start making real calls on the company. Now.

General Electric's (GE) "deep dive" yesterday did involve a lot of numbers and slides. But judging by the tone of analysts' reactions, the Street is still taking the company's word for it. The assertion that GE Capital will be profitable this year even under a worst-case scenario (leaning heavily, one presumes, on the fact that it doesn't mark to market) is being taken as gospel.

The prevailing analyst reaction appears to be: Cut earnings a bit, cut price target a dollar or 2, remain neutral on the stock.

I find it hard to see how you can be neutral on this company. If you believe what management is telling you, and if you believe in the business model, the stock seems to be an unstoppable earnings powerhouse, even in the worst of times, and should be bought aggressively.

Now, I don't think too many people really believe this. But few are willing to say "the company has repeatedly changed its tune, and we have no reason to believe it won't again."

You make a reputation by being decisive, not by nervously checking around and making sure you're giving the same noncommittal non-advice as your peers.

I call upon the analyst community to make real calls on GE. Either say "We believe management and the stock is great value," or "We don't trust them, don't trust their assumptions, analysis and guidance, and we'd avoid the stock at almost all costs."

Trying to play both ends against the middle may have the appearance of safety. It's also what got us into this mess.
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Position in GE

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