« Which road to take, Fri., Nov. 18, 2005, 8:59 AM | Main | What I think of Canadian trusts, Fri., Nov. 18, 2005, 11:30 AM »

November 18, 2005

Sucking and blowing for GE, Fri., Nov. 18, 2005, 9:39 AM

Today the news is out that GE has made a decision I like; they are selling off the international part of its re-insurance business for $8.5 billion, taking a $2.8 billion loss on the sale. The company also states that the U.S. re-insurance business, and the rest of its Insurance Solutions group will be wound-down. MarketWatch reports that the GE losses for this group have been $700 million over the past five years.

Now I'd like to point you to Value Line's Oct-14-05 analysis of GE, by their analyst Edward Plank.

I'd like you to see how an investment analyst sucks and blows at the same time.

The first paragraph of Plank's analysis" purports: All of the company's 11 businesses saw double-digit earnings growth. I suppose Edward picked up that little nugget from a PR firm news release.

You will also note that Insurance Solutions is reported as being 15 pct of 2005 gross revenues of GE, and 3 pct of its profits.

Looks like more voodoo accounting to me, and a lot of sucking and blowing.

Posted by Posted by Bill Cara on November 18, 2005 09:39:45 AM | Category: 20 Industrials