Skip to main content

General Electric: Signaling Economic Turmoil

The Dow Jones Industrial Average originally consisted of 12 companies. 

Of those original companies back in 1896, only General Electric remains, and during the most recent recessionary periods it has proven reliably representative of trend. 

During the collapse of the dot-com bubble, General Electric fell from roughly $60 per share in September of 2000 to nearly $20 per share in February of 2003, a whole 66-percent decline over 29 months. 

Over the ensuing 55 months, General Electric shares would rebound over the 40-dollar level, only to tumble all the way down to $7 per share by March of 2009, as the world experienced the greatest financial meltdown since the Great Depression. 

Since that low, General Electric has endured to again eclipse the $30-per-share mark, closing at $32.88 on July 15, 2016. 

Since then, however, the stock has resumed its seemingly-secular downward trajectory to close at $17.45 per share at the end of 2017, completing a full 47-percent decline just before the new year. 

With the lauded "January Effect" looming large, many investors and commentators recommend an allocation toward General Electric to take advantage of the historical trend. 

However, the technical movements of stocks are rendered predictable only by their estimations against relatively normal, predictable conditions. 

Should this downward movement instead indicate a broader trend for the greater economy, this may in fact portend something far more serious than any opportunity to buy the dip. 

If immediate history is any indicator, a major economic recession is upon us.

Comments

Popular posts from this blog

Goldmoney: Real Money Purposed for the Future

The institution of money entered the minds of sophisticated traders several millennia ago, when instead of bartering with limited numbers of people within the cumbersome double coincidence of wants, large-scale economies developed from the reach and transparency of commodity money which was scarce, durable, fungible, transportable, divisible, recognizable, and usable in and of itself. 

While we may appear to have transcended those primitive times and those so-called barbarous relics, the truth is that we have merely mutilated the concept of money by clandestinely replacing it with its more manipulable and abstract representative, the proverbial coat check without the coat. 

This is but the device of a large-scale social experiment run in real time, and we are its unwitting and unconsenting subjects who’ve largely never heard of the Federal Reserve’s dual mandate, much less its missions of “maximum employment” and 2-percent annual inflation.

Yet there is hope after all.

Finally, after deca…

The Kaepernick Craze: Exposing the Nation's Fools One Conversation at a Time

The Kaeparnick craze and other viral movements haven't merely pressured people into becoming simpler caricatures of their prior selves, but they have manifestly exposed people for how foolish and uninformed they've been all along. 



In his final year in the NFL, Kaepernick ranked 17th in passer rating and 34th the year before that. 

He played through an entire season in only two of his six years in the league, and his best full-season performance ranks far outside of the NFL's top-250 single-season passing performances in the league's history. 

For reference, the oft-criticized Tony Romo posted a career passer rating of 97.1, as compared to Kaepernick's 88.9. 

Romo's passer rating dipped below 90 for only one season of the eleven seasons he played, whereas Kaepernick failed to eclipse the 90 mark on three of his six seasons, a full 50 percent of his time in the NFL. 

In fact, Kaepernick accomplished this feat only once if we are to discard those other two seasons in …

Bitcoin: Are You Feeling Lucky?

The popular cryptocurrency, bitcoin, has tumbled greater than 50 percent since its all-time high set just a month ago near $20,000. 

Since then, it has traded as low as $9,000 before rebounding modestly back over the $10,000 mark. 
The short story of bitcoin (XBT) is powerfully illustrated by its graduation from its initial use case as an easy, inexpensive medium of exchange to an erratic and highly speculative risk asset which scarcely resembles anything more. 
And despite the chance that it regains steam, it is steeped equivalently in bubble territory at $9k as it is at $20k or even $100 or $100k. 
Plainly, it is a bubble at nearly any price. 
The only difference is the anchoring effect which seduces the investor into interpreting the drop as a buying opportunity. 
So while the fundamentals and the use case haven't dramatically changed since the decline, the greedy investor assumes that the price has dropped because of reasons unrelated to its future viability. 
This is wishful thinkin…