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Fairfax Financial Holdings Limited Message Board

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  • bee_plus_001 bee_plus_001 Aug 20, 2009 9:15 AM Flag

    FFH - Major additions thru June and impact on portfolio

    Agreed. I bought some LEAPS on GE. CEO lost credibility with analysts as he said NO to dividend cuts and cut dividends... Credit card should do OK.

    But, GE has huge operation in China, India etc. Also NBC & CNBC seems to be doing OK. GE medical seems to be healthy too. Wish they split this to 2 companies. But over the long haul (2 years), GE should be able to return 100% compared to the current stock price.

    Book Value 10.5, Cash per share - 4.5.. So, I don't see the big risk (in terms of GE not being able to manage thru). Couple of years from now, people would be kicking themselves for not investing here. Also, Dividend should be back to decent level and would be worth holding for the long haul.

    The only reason for my option purchase is because it was cheap way to borrow money and in all probabilities, I would be exercising the options when I see dividend going up or by Jan 2011. I am planning to hold GE for the long haul.

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    • >> CEO lost credibility with analysts as he said NO to dividend cuts and cut dividends...

      Yep, literally within 2 month. Plus they were "committed to AAA rating". Plus in 2008Q1 and Q3 just two weeks before reporting they "blew up the guidance". Plus, the banking part of GE, under reserved (loan loss provision for bad loans is smaller than for comparable banks) Plus exposure to commercial real estate plus exposure to Eastern Europe. Plus Obama/Geithner may want to cut them off to regulate only the banking part (In this case the banking part could be downgraded further). Nardelli, who tops my list of CEO which sucks (Amazing job screwing up HD and Chrysler (although Chrysler was half dead anyway) came from GE.

      On the positive site, it seems commercial real estate fear is overblown (look at commercial real estate REITs, they are soaring). Jeff Immelt on Obama's economic consul, strong lobbist. (It was fun listening on a conf call how their lobbists were working with government to get the money on the "right" terms 2008Q3, I believe.

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