Click here: The Weekly Beacon – August 12 2022
We will be giving some macroeconomic market updates on a weekly basis. No
recommendations will be given in this commentary and we encourage you to contact us
today if you have any questions regarding any observations.
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This weeks issue: General Electric Stock, General Electric Company Split, GE Stock, Largest Industrial Stock in 2000 vs. Now, GE Market Cap, GE Aerospace, GE Energy, GE Healthcare, EV Sales, EV Stocks, EV Production, Tesla vs. The Rest, Unlimited Capital, EV SPACs, Lucid Motors Stock, Rivian Stock, Fisker Stock, Nikola Stock, Price to Sales Ratios, Traditional Auto vs Electric Vehicle Producers, Inflation Reduction Act of 2022, Increasing Inflation, Increasing Tax Rates, Senator Sinema, 2022 Midterms, CBO Rating, Government Spending, Inflation, Energy Prices, Food Prices, U.S. Food Production, Qu’Appelle Beef, Food Stocks, Fertilizer Stocks, Economic Vibes, Blackouts in the UK and Germany, Energy Shortages.
General Electric Split
After 130 years, General Electric’s (GE) reign as one of the world’s greatest companies is coming to an end (we say great for the whole period, we will get into recent history later). GE’s remaining business units will be split up into 3 separate companies, aviation/aerospace, healthcare, and energy. The company that was founded in 1892 by Thomas Edison is nothing like it used to be, it does not even make lightbulbs anymore.
For shareholders, the last 20 years have been………..bad.
GE’s stock is down 85% since its 2000 peak, creating an average annual return of -8.04% over that period.
Pre-2000 is the period when General Electric was a titan in public markets. The stock traded at $5 in 1982 and closed the century above $400/share. The average annualized return for GE investors was greater than 25% over those 18 years. The brick-and-mortar company rapidly expanded in the 80s and 90s and diversified into various sectors. The company took full advantage of rapid economic growth in this period. Since then it has been a struggle… By 2000, GE’s debt had ballooned, and its businesses became less efficient. What made their struggles worse was the Credit Crisis when GE Capital was battered by bad debts.
When comparing the world’s largest industrial companies in 2000 to today, one number stands out, 394.