If the U.S. was a stock, would you invest?
March 26th, 2009
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I had a deep thought today while sitting in a meeting that I really didn’t need to attend in the first place:
If the United States (the entire country, good, bad and ugly) were a publicly traded stock, would you invest in the stock?
Think of it like this: President Obama is the CEO, Joe Biden the Vice President, Geithner and Bernanke would be co-CFO’s, and we the people are the employees of the company. You could lump a number of the other players into a “Human Resources” category.
In terms of a financial analysis, you’d look at the assets the county holds, the liabilities it has including the paper debt, etc…
So a new poll, if the U.S. were a stock do you buy or sell the ticker?
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Hell No! I don’t trust the executives in the offices. I believe in the US of A and I love this country er um … Company, although I think a fundamental analysis would show that it’s a bit different than it was when we first invested. The mission statement doesn’t seem to guide our decision making process anymore so it seems to be changing a bit, and I don’t know that I like where it’s going. If we can get our earnings back on track, bring our extremely high p/e ratio to a normal number, and maybe we’ll have to stop paying dividends, I don’t mind. Whatever it takes to get it under control again and maybe I’ll think about investing my money but until Trust and some decent numbers come back into play I think I’ll place my money somewhere a bit safer just for my own personal peace of mind…
I’m short. The economy has a ways to fall yet, and I don’t believe in the overhaul that was made to the CEO position.
Our CFO can’t create a plan that is reasonable and gets everyone on board, and the sentiment in the “stock” is waning.
the fundamentals are terrible, the debt is out of control, and the CEO thinks he can force efficiency upon the employees… a recipe for disaster. unfortunately I’m not sure where the bottom is, or how much money is left to be made on the shrot side of the play. I thinnk the stock dips a bit more and the country trades sideways for six to eight months.
Why would I invest in USA ticker when there are so many better places to put money? And given the health of our country right now, that should say a lot.
I am one of those that believes you can spend money to fix problems, though only if you clamp down on expenses and trim the fat where it needs to be trimmed. So far, Obama has spent a lot of money, but his out seems to be “we’ll make up for all of it in taxes” which is no way to encourage productivity.
Tommy
@Tony, good comment. The fundamentals aren’t all that good, and while the CEO says he has to make the tough decisions, he also needs to make the RIGHT decisions, and I can’t say that I agree with his decisions so far.
@swine, interesting thought, so I assume you’re a hold for now?
Wow, this is quite the interesting way for republicans to talk in code. Also, doesn’t buying this stock remind you of buying GE? [sarcasm] Yeah its messed up now, but in a good market this stock will soar. Diversity in investments is good right? [/sarcasm]
@MJ, so I take it you’d go long on USA, even with the multi-trillion dollar debt and unemployment still rising?
USA will be a great buy sometime in the future, perhaps after the government tells us all how they’re going to pay off the first billion in welfare…
The difference between GE and the USA is that the financial services (i.e. GE Capital) portion of GE is a relatively small portion of the overall business. GE still has a large chunk of its overall enterprise that is still very healthy and making money. USA on the other hand doesn’t really have anything making money right now (on the balance sheet anyway).
That said, I think Immelt has to go at GE. He comes off as inept and incompetent as days trickle by.
JPM
MJ would be the only one buying this crappy stock, and he’s trying to pawn it into a democrat vs. republican game… If you think this is republican code speak, I’d hate to see your portfolio…
Did no one see the sarcasm quote?
@James
Look at the 2008 GE annual report, near as I can tell is that GE Finance is roughly 40% or more of there revenue stream and well over 50% of their assets. (Grant you may need to check me on this)
@Emilio
I didn’t say whether or not I would buy the stock, but to me it has a lot of similarities to buying GE, which I would not purchase. You can easily see my crappy portfolio over at my blog. Just click the “MJ”. I did mean what I said about the code speak though.
@Grant
The unemployment is just to thin the workforce. If you check the USA has only reduced the workforce by a mere 8%, frankly USA is lagging compared to many of the other blue chip stocks with layoffs of well over 10%. Also, most of the debt occured with the previous administration, USA would prefer if its stake holders would allow a little bit of time for new administration to raise capital and tighten down on some of its programs.
All joking aside, the amount of spending is a bit terrifying. There is no way that can occur without tax increases, that writing is on the wall. I also believe that we do not want the government running businesses, they can barely run the government. Healthcare reform is so long overdue that it hurts, but I don’t want my gov’t running the healthcare system.
However, this isn’t unlike (lighting cigarette and tying blindfold) what the Bush administration did after 9-11. They used the hysteria of that attack to push through not only protection measures, which were needed, but also a significant portion of the GOP agenda. This economic downturn, which was not caused as much by the government but instead by the American public’s reliance on credit among a perfect storm of other things, is the democrats 9-11. Which law of physics is “for every action….” That’s all I am saying.
@MJ
GE Capital is (was) 37% of the total revenue, and contributed to 39% of profits in 2008. Not sure what percentage of overall assets they held, but I’m not sure I’d put them at over the 50% mark. 2009 may be a different story though.
I’m not exactly sure what you meant by “republican code speak”, but quite frankly I really don’t care.
Additionally, while you could have claimed (on January 20th) that the bulk of USA’s debt was generated during the previous administration, you can’t say that today. A $787 billion “stimulus”, TARP round 2, and other spending and budgetary proposals have cleanly eliminated that argument and any ability to “blame Bush” for USA’s debt. Mr. Obama is now a very generous contributor to that part of the balance sheet too.
I agree wholeheartedly that the execs at USA have no business running third-party businesses or imposing unwanted regulation upon them, with the exception of those companies who have allowed USA to become majority shareholders… all bets are off for those entities.
Anything else wreaks of buying up power and forming a monopoly under the guise of “fixing” the free markets.
Healthcare does need to be reined in, no doubt, but like you I cringe at the possibility of the government running the health care show.
Like the Bush move after 9-11, parts of what Obama is trying to do through the mask of hysteria is well warranted, but the bulk is self serving. Bush had grandiose plans to strengthen security through formation of Homeland Security and thus, the Transportation Security Administration (TSA). While a nice idea, both groups are grossly inefficient and arguably ineffective (more pocket knives get through metal detectors today than ever before).
Bush’s “no child left behind” act is a joke, and it too is highly mismanaged and financially inefficient. Fundamentally I believe that it’s absurd to think every child can be forced through the educational system while performing to the same standards, all while holding teachers to a performance-based compensation scale. Clearly there is incentive to keep the kids moving up a grade regardless of actual learning in an effort of self preservation.
@Emilio
If you’ve got a portfolio that isn’t “crappy” I’d love to see it.