General Electric

In the 2008/9 crash GE took a huge plunge from over $40 down to $12, today it sits at $20. Its basically hobbled along around the $15-20 for 3 years. But things have changed. The troubled subsidiary GE Finance is doing well as mortgages have not suffered the huge losses predicted in the height of panic and the engineering and energy side is doing well. This is a global giant that pays 3.5% dividends and I think is poised to grow back if not to $40 then above $30 a 50% growth from today. How long? Well everyone and his dog is predicting a 8-10% sell off in the markets between now and end of year 2012, so I suspect once the dust has settled. I think that everyone expects a EU meltdown, but I am not convinced, just as I was not convinced in 2009 when newspaper and TV said the USA is collapsing. I read an article today that seemed to hint that September 12th was a key day, if we get past that then maybe the dip won't happen. Its not that long away and GE is not going anywhere. This is what the 2nd qtr figures said, the first line is the key:-



Company positioned to deliver 2012 double-digit earnings growth in both Financial &

Industrial segments

 Environment continues to be challenging

• U.S. stable but mixed

• Growth in emerging markets

• Europe tough … Healthcare and Aviation

 Strong top-line performance … +10% Industrial segment organic revenue growth

• Industrial segment revenue +9%, Energy +19%, Transportation +27%

• Infrastructure orders up 1% ex. FX & 3% ex. Wind

• Positive orders price index … 1.2%

 Good earnings growth … operating EPS +12%

• Industrial segment profit +7% ... Energy +15%, Oil & Gas +11%, Transportation +58%

• GE Capital earnings +31% … driven by Real Estate improvement

 Solid execution

• Restarted GECC dividend … $3B to parent

• $0.9B stock buyback in 1H … expect $3.5-4.5B in 2H

• Industrial margins at 15% … on track for 30-50 bps. improvement in 2012

• Targeting ~$2B cost out 2012-2014