I think this blog post by John Hempton at Bronte Capital is probably the best blog post I’ve read all year and a must read analysis of GE. Here is one section that I loved:
Speaking as an outsider I have to agree – America at its best is a wonderful place. It is amazingly productive. The degree of specialisation of people and the cities they live in is wondrous. The innovation is jaw-dropping and it has changed the world.
Silicon Valley is a wonder of the modern world. But so are half a dozen fecund places in America.
So is General Electric.
America has plenty to recommend it – and if I did not love Australia so much you would see me on the plane yesterday.
But the accounting sucks. It sucked when the broker certified the taxi driver’s income at $350 thousand for the purpose of the no-doc loan and it sucks when Immelt certifies the reserves in GE’s accounts.