At last night’s Office Hours, we went through a presentation with my detailed analysis of the arguments made by JP Morgan’s analyst C. Stephen Tusa, Jr., CFA regarding a company under his coverage, General Electric.
We will be running through this presentation again on Weekend Office Hours (NOTE: this week, we’re holding them on Sunday rather than on Saturday!), and am happy to field questions about the points raised.
As we discussed on the call last night, Tusa’s knowledge of the company is astounding. He has been covering the firm and its competitors for years, and really understands the dynamics of the markets in which GE competes.
The fact that he understands GE’s business dynamics well, however, does not mean that his valuation of the company is correct! In point of fact, he is not compensated for correctly valuing this or any company; he is compensated for pushing trading volume through his sales and trading desk. I am assuming that this year, he will be well-compensated…
Even if you are not interested in GE, looking at the dynamics of Tusa’s call – his possible motivations, the timing, and the points that he raises – is interesting and informative and the learnings from this can inform your understanding of other situations as well.