Story updated with GE's first-quarter financial results.
When seemingly unrelated businesses are bundled together under the umbrella of a parent company, cost-saving and cross-promotional opportunities arise. That outcome is logical, in theory, but, in practice, most conglomerates are diversified, but unfocused, and difficult to oversee. To purist investors, the conglomerate is anathema, whereas the ideal investment is a specialized company with a moat (some sustainable advantage), such as technical expertise, that keeps competitors at bay.
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