General Electric Dropped from the Dow After More Than a Century

nytimes.com

2 pointsaphextron2 comments

This will be a common topic this century. A lot of consolidation is happening especially with FAANG innovating vertically and horizontally. A lot of old companies won't be able to compete when Mil, GenX and Y take over.

GE is still reeling from the financial collapse. At the peak GE Capital accounted for nearly half of GE's revenue. The winding down of GE Capital accounts for most of the decline in GE stock.

Companies like GE are theoretically poised better than most companies, including many new tech companies, to do well because they focus on producing products for which mature industrial economies enjoy a competitive advantage, and continually shift their focus as competitive advantages evolve. As China moves upmarket and diversifies into services and software, many of today's tech companies are going to disappear just like their low- and mid-market industrial forebearers. There are cultural and geographic factors that protect companies like Facebook and Apple, but expect more Twitters and Googles to come from China.

Plenty of people are going long on GE. They're decently positioned globally, it's just unclear if management is going to move forward aggressively or throw in the towel. Either way the stock seems underpriced.

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