Yanche wrote:Interesting opinion. Sounds like a subject that must be work related. Do others share your opinion? Could you provide references that discuss it in more depth? Sarbanes-Oxley seemed to be a need *censored* reaction to some other accounting crisis, don't remember the details. Small businesses seem to not like the cost of complying and say it shouldn't reply to them. Is there some professional society group that would have an opinion on it? Accounts professional society, etc.? Just trying to learn more.
This might be a key to picking stocks. I find it hard to believe a company like GE who has great skills and assets in many areas and strives to be #1 or #2 in their business interests has taken such a stock hit. Perhaps GE Capital is dragging it down and a more studied analysis would show it to be largely accounting rules.
I have not conducted any credible in-depth quantitative research, but here are three links that might assist you in your desire to learn more:http://www.gaebler.com/The-Sarbanes-Oxl ... uction.htmhttp://www.financialpost.com/opinion/st ... 36f196d5ffhttp://en.wikipedia.org/wiki/Sarbanes-Oxley_Act
GE is another matter. For the post Jack Welch era they have be engaging in the buying and selling of companies, much more than in organic growth. A perfect example is their acquisition of a financial services company called Heller Financial for about 6 billion dollars. Once acquired GE pushed the human capital from Heller out the door, dismantled Heller and spread the pieces it across multiple GE businesses. The financial trail was so complex, it would be impossible, 3 years later to determine if the acquisition was profitable or not. GE has some of the world's best PR and is not necessarily worthy of their reputation. I hold GE stock, a mistake, but it is not the time to sell it. One might want to consider why GE internalized the 6 Sigma Quality Control program. Unlike ISO, where the audits and measurements are independent, GE formed its own internal 6 Sigma teams and many qc projects did not stand the test of time.
Any way a lot of the losses and financial firms crisis and losses are on paper. The financial firms and other institutional investors are having to deal with under valued illiquid assets that if valued on a 3 or 5 year running average or on a cash flow valuation, would have a much higher valuation. It will take time to work through this crisis.
At any rate, I have yet to see the government run anything better that the private sector, so the thought of the government fixing the economy is challenging. I strongly disagree with run away spending whether it is under Bush or Obama. Bill Clinton looks better everyday!
Editing due to typing Not a strength!