IFB82: Case Study ($GE) Into Why Investing Principles Are Critical

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now.

Dave:                                    00:33                     All right. Welcome to this podcast. This is episode 82 tonight. Andrew and I are going to do a case study into a GE. Been in the news recently for some not so great stuff and we’re going to talk a little bit about why investing principles are critical and GE is going to be a great illustration of that. Andrew came across a great article on Wall Street Journal recently and we will put a link to that in the show notes for you guys, but it talks a little bit about a gentleman that worked for GE for a long time and Andrew will give us a little more details on that. So Andrew, why don’t you tell us a little bit about the article.

Andrew:                              01:14                     Sure, yeah. It was actually about several gentlemen, an article was written back earlier this year. There’s this one. He’s like 61 years old. He had basically was able to retire after working at GE for a thing. It was over for the years. He had a pension, 85,000 and you had company stock up more than $280,000, to give some backstory on GE, a huge, huge blue-chip company. I believe the evaluation used to be over $200,000,000,000 back in a, like the.com kind of boom-bust. They kinda had the type of evaluations that you saw just like with every other stock. And same with the financial crisis. However, recently things have been really bad there they went from 2016, they had share price hovering around 25, $30 a share through 2017. It was dropping and I believe by the end of 2017 was around a, it’s around seven a $7 and eighty cents per share.

Andrew:                              02:28                     So the company has just really been struggling and the amount of loss in market value from this stock has just been horrendous. In this Wall Street Journal or the coal, they compare from a dollar standpoint, right? An of market value. Obviously when you compare the accompany like Enron or Lehman that went completely bankrupt, the percentage is not as much because obviously, GE is still alive today, but the actual market value loss was greater than a lot of some of the big name bankruptcy’s or just huge stock crashes that we’ve heard of in the past. Companies like Valiant and Ron DM, Lehman and Bear Sterns. GE has lost more market valued under all of those since 2015, so obviously it had to be a big stock with a lot of the market value at that happen. Really, really a sad, sad story and I think we can shed some light into it and really try to examine it and let’s try to learn lessons from it and hopefully that helps us understand that some things that we like to preach over and over again on the podcast are not just things that we say because they sound nice.

Andrew:                              <a href="https://www.temi.com/editor/t/ueF5I_qGmc8cpDk4AEk085FXI2anfBhgyZV...