.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

G.E., Gainesville, Fla.

Dear G.E.:

Are you aware that General Electric Co. (GE-$18.50) recently reported a 19 percent drop in fourth-quarter profits; that GE paid $1.4 billion so its NBC subsidiary would have the broadcast rights for the 2010 Olympic games; and that GE expects to lose about $250 million on its Olympic coverage?

The cost to host and broadcast Olympic Games has risen like a Saturn rocket, increasing fivefold since Canada hosted the Olympics in 1976. Montreal made a few million dollars after the dishes were washed and packed away. But today, Vancouver will lose north of $110 million after building housing and training facilities and providing protection, communications systems and transportation for the athletes. The Olympic Committee falls into a hole, the stockholders are hurt and the taxpayers pick up the tab for the losses.

This culture of spending beyond our means must stop. If NBC can’t persuade enough advertisers to cover its cost, then NBC should bid less for the broadcast rights or allow another broadcaster to eat those lawsuits.

But GE must have a superfluity of U.S. congressmen on its board. Yes, when I spoke to an audience in Knoxville in February, I withdrew my GE recommendation. I don’t trust GE’s scrofulous management, and this Olympic brouhaha was the final brick. This doesn’t mean GE is a bad investment; rather, I don’t approve of its business decisions and politics.

I use Verizon Communications Inc. (VZ- $30.26) for my cell phone and Internet service, and I like what I have. VZ does have a serious problem that obviously bothers its current customers and drives potential new customers to the competition. More than a few VZ shareholders have written to question their investment because they are concerned about, and I quote: “God awful slow service” and the “frustrating wait to purchase a new phone.” Some folks — after a long wait — just walk out.

Well, I thought these folks were hypercritical until I visited a Verizon phone center with my daughter a month ago, and these readers are wrong. They’re wrong because they were much too kind in their complaints. It took us 75 minutes! Suffice it to say, after that experience, I pray I never have a VZ problem.

But that’s not the real reason the stock is trading in the dumps. The reasons are: VZ has spent too much money upgrading its fixed-line network and connecting customers to that network. The returns are horrible. The company spent more than $12 billion at auction to acquire new spectrum, adding excess capacity to areas it already serves. And while that capacity will eventually be necessary, VZ is having trouble getting customers to pay for the costs because other wireless firms continue to market $30 monthly unlimited data plans.

And finally, Verizon’s profit margins are declining because the company is unable to extract high margins from its fixed-line system, which accounts for 65 percent of its phone business. You can buy the stock for its 6.3 percent current yield, but I think its share growth potential is unattractive.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775 or e-mail him at mjberko@yahoo.com. © 2010 Creators.Com