3 ms·

I don't understand what's so unexpected in an almost perfectly exponential adoption curve. Maybe only if the best tool GE has is a linear estimator.

toomuchtodo 7y ago
Index funds and the institutional firms that solicit them (Blackrock, Vanguard) aren't designed to be activist investors. Their role is to simply track a basket of stocks. This is a deficiency in passive investing. When management drops the ball (such as what GE did, not just in nat gas generation forecasting, but also how poorly Welch [1] and Immelt [2] managed the firm), there are fewer checks and balances until the value is already gone. [1] https://www.bloomberg.com/news/articles/2019-06-12/reassessing-jack-welch-s-legacy-after-ge-s-decline-joe-nocera https://www.bloomberg.com/news/articles/2019-06-12/reassessi... (Bloomberg: Was Jack Welch Really That Good? General Electric’s legendary CEO was good—but he was also lucky.) [2] https://www.cnbc.com/2018/02/21/jeff-immelts-refusal-to-give-or-take-bad-news-defined-his-leadership-at-ge.html https://www.cnbc.com/2018/02/21/jeff-immelts-refusal-to-give... (CNBC: Jeff Immelt’s refusal to give or take bad news defined his leadership at GE)
- jandrese 7y ago
  Maybe we could fault the investors if they were clamoring for safe reliable income from well proven legacy business models and grumbling when the company invested more in R&D, but that's stretching things a fair bit. Mostly the story seems to be "giant multinational company is slow to react to disruptive technologies", which is a story you will hear every year for all time. It is inevitable. No company wants to fund the R&D projects that will kill a cash cow. This is why disruptive tech almost always comes from small startups or scrappy underdogs.
  - deleted 7y ago
    [deleted]
  - xiphias2 7y ago
    > Mostly the story seems to be "giant multinational company is slow to react to disruptive technologies", which is a story you will hear every year for all time. It is inevitable. No company wants to fund the R&D projects that will kill a cash cow. This is why disruptive tech almost always comes from small startups or scrappy underdogs. This is true for non-technical management, but if you look at Alphabet / Facebook / Amazon / Tesla / NVIDIA, the leaders try really hard to change the product and/or create new cash cows that are comparable in size with their previous ones. The reason that I wouldn't invest in a company with a CEO without technical knowledge is that they have no means to reinvent their company fast enough.

toomuchtodo 7y ago

Index funds and the institutional firms that solicit them (Blackrock, Vanguard) aren't designed to be activist investors. Their role is to simply track a basket of stocks. This is a deficiency in passive investing. When management drops the ball (such as what GE did, not just in nat gas generation forecasting, but also how poorly Welch [1] and Immelt [2] managed the firm), there are fewer checks and balances until the value is already gone. [1] https://www.bloomberg.com/news/articles/2019-06-12/reassessing-jack-welch-s-legacy-after-ge-s-decline-joe-nocera https://www.bloomberg.com/news/articles/2019-06-12/reassessi... (Bloomberg: Was Jack Welch Really That Good? General Electric’s legendary CEO was good—but he was also lucky.) [2] https://www.cnbc.com/2018/02/21/jeff-immelts-refusal-to-give-or-take-bad-news-defined-his-leadership-at-ge.html https://www.cnbc.com/2018/02/21/jeff-immelts-refusal-to-give... (CNBC: Jeff Immelt’s refusal to give or take bad news defined his leadership at GE)

jandrese 7y ago
Maybe we could fault the investors if they were clamoring for safe reliable income from well proven legacy business models and grumbling when the company invested more in R&D, but that's stretching things a fair bit. Mostly the story seems to be "giant multinational company is slow to react to disruptive technologies", which is a story you will hear every year for all time. It is inevitable. No company wants to fund the R&D projects that will kill a cash cow. This is why disruptive tech almost always comes from small startups or scrappy underdogs.
- deleted 7y ago
  [deleted]
- xiphias2 7y ago
  > Mostly the story seems to be "giant multinational company is slow to react to disruptive technologies", which is a story you will hear every year for all time. It is inevitable. No company wants to fund the R&D projects that will kill a cash cow. This is why disruptive tech almost always comes from small startups or scrappy underdogs. This is true for non-technical management, but if you look at Alphabet / Facebook / Amazon / Tesla / NVIDIA, the leaders try really hard to change the product and/or create new cash cows that are comparable in size with their previous ones. The reason that I wouldn't invest in a company with a CEO without technical knowledge is that they have no means to reinvent their company fast enough.