If Rocky were here I wonder what lesson would be learned from GE, up 8% today. As I recall he was long calls at 12 ish (last year I think or earlier) that have come back into the money. All prices will be seen at least twice is one of them. Also, positions are bound to go way against before they go in your favor. And the cotton trader's never get out at break even after a big paper loss.

Kim Zussman writes: 

Yes, but for every GE how many Enrons, Tycos, Worldcoms, Pets.com, etc?





Speak your mind

2 Comments so far

  1. Rocky Humbert on January 31, 2020 9:26 pm

    Duncan: Rocky IS here (and not there).
    Taking a DEFINED RISK position in a troubled enterprise which is undergoing a restructuring was the GE story. And if the story is still “right,” GE will double and double and double again from here. So the lesson is: the stupidest thing is risk a 100% loss and not remain with the position to potentially experience a 5x or 10x return. I noticed that MSFT has become too big in my portfolio because it was the same strategy that I used in buying Microsoft when everyone declared it dead and it’s now more than a 6x return — of course MSFT had a better balance sheet than GE. But comparing it to Enron, Tyco, Worldcom and Pets.com is no different from comparing my career to Bernie Madoff’s. He’s in prison. I’m sipping champagne on an island. “Feeling Good Louis! Looking Good Billy Ray”. RGII

  2. none on February 5, 2020 2:48 pm

    GE is a suckers buy, as investors have bought all the way down.

    The massive 18-b buy back years made its CEO 720 million towards the 2000 top, and the massive gifts that Welch got at the very top (severance 417 million) was a big tell for the future.

    Look for compete bankruptcy.

    Massive declining values suggest something is quite wrong, not that something is just ‘under valued.’


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