[NA]GE stock[NA]

Let'sgoflying!

Let'sgoflying!

Touchdown! Greaser!
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Dave Taylor
I’m not sure why, but I’ve had a little GE stock for a long time, through the depicted decline.
Now my investment advisor wants me to dump it.
(Will that assure it’s meteoric clinb?)
Why did it make that big downhill slide? What us this company’s future?


07ED4A7D-B0EB-42C3-B1BC-2F0F63AAB7A0.png
 
To make a long story short, it has fallen due to very poor management. John Flannery has laid out a plan of action to restructure the company, but that’s still under review to see how much of an impact it will actually make. Investors have basically been sitting on the sidelines to see what improvements have been made and as of now, there isn’t much evidence of any.

Your financial advisor is correct. An investment in GE is dead money, as far as I’m concerned. It hasn’t risen due to the majority of investors sentiment turning bearish and going short, which is likely the right play to make at this point. It’s basically in the same position as Ford (F).

BTW, if you haven’t kept up with it, GE was kicked out of the Dow 30 about 6 months ago, which is a big slap in the face for the company.
 
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We bought a GE dish washer and refrigerator this year :O
 
Don't forget the dividend cuts. That's an automatic sell in a lot of portfolios.
 
SkyDog58 said:
Hold.
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Yup, I'd hold if you have the time. It'll be back. I had it for a long time and fortunately sold before it began its descent. It'll be back, IMO, which means nuthin', plus you get a dividend. Not sure if they've cut the dividend or not.
 
Ryanb said:
Actually the barn door should have been closed about a year and a half ago. Waiting until the stock bottoms isn’t the best time to sell.
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That was my point, stated sarcastically. I do think GE will turn around. Not sure if we have seen the bottom, though.
 
Old97 said:
That was my point, stated sarcastically. I do think GE will turn around. Not sure if we have seen the bottom, though.
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Does that mean that you believe they'll go under? I wish that GE Aviation was split off into a [truly] separate company, they're doing OK.
 
Kenny Phillips said:
Does that mean that you believe they'll go under? I wish that GE Aviation was split off into a [truly] separate company, they're doing OK.
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No i do not think that. I think they will thrive. Maybe next year, maybe much later.
 
They are going to sell off oil and gas too at some point. Now called BHGE
 
Kenny Phillips said:
they're doing OK.
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Might want to go back and do some more research. Look at their financial statements for the past 3-4 quarters. Posting net losses of millions of dollars isn’t exactly ‘doing ok’.
 
Seeing the current price, I'm glad I sold what I had last year. I did not, and would not, have faith in it turning around.
 
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jack welch wasn’t exactly the great CEO that people think he was.

I remember in the early 2000’s he attempted to buy the company I work for and that died a quick death thankfully
 
I got off the GE train a long time ago. Took a look enough to deduct off a gain somewhere else. At least you can offset a capital gain somewhere else!!
They are poor performers and just getting outpaced by competitors Across the board.
 
Scrabo said:
jack welch wasn’t exactly the great CEO that people think he was.

I remember in the early 2000’s he attempted to buy the company I work for and that died a quick death thankfully
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If it wasn't for Monti and his ruling, that company would have been assimilated into the Borg that was GE.
 
Axtel4 said:
If it wasn't for Monti and his ruling, that company would have been assimilated into the Borg that was GE.
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Agreed. Monti was dumping his stock weeks before the EU blocked the deal. Monti was bad, dragging Larry back for a short period was wise.

With the spin offs in HW, I wonder if parts of GE become a buying opportunity ?
 
It’s a bit flat now that it’s dropped. Sell some covered calls to open on a good day. Make a little here and there by buying the call back on a downer or near expiration (or let it expire if you don’t have to wait that long or can wait). Repeat. Then dump the stock when you’re either sick of messing with it or when you get called or when you fear further retreat.

Not sure if the strategy would work cuz I don’t follow GE, but something fun to look into by looking at its option chain. Doing covered calls on a stable stock you are on the fence about is a good way to dip your toes in the options market somewhat safely to learn. Don’t go crazy with it though.

My bad financial advice. You’ve been warned.
 
I’m a believer in the “Efficient Market Hypothesis”. Hence, GE is currently priced exactly where it should be. And by implication, as likely to go up from here as down.

That said, if one can’t articulate a good reason to own a stock, it’s probably best to sell, take the loss, and move on*. Maybe find a company you can articulate a good reason to own, and invest the proceeds there.


*I wish I had followed my own advice with both Enron and Pan Am!
 
Depends on the analysis.
Some say GE has sold enough parts to fix the balance sheet.
Others state it is still too scattered and unfocused with a large debt still from GE Capital.


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tspear said:
Depends on the analysis.
Some say GE has sold enough parts to fix the balance sheet.
Others state it is still too scattered and unfocused with a large debt still from GE Capital.
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Hence, at 12.66, at that price the number of buyers is almost exactly equal to the number of sellers.

That’s the beauty - and simplicity - of free markets!
 
Scrabo said:
jack welch wasn’t exactly the great CEO that people think he was.
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O.M.G. Blasphemy!

Where I used to work, a one time CEO worshiped at the alter of Jack Welch and how he made GE the model for what we should be to really boost the P/E ratio. I had to waste weeks learning all about BIFF (Big Improvements For Free - or whatever it was called) and management at every level, and, and, and...

I will say that the P/E ratio really did go right through the roof under said CEO (that's what we wanted, right?).







But it was due to a huge reduction in earnings.
 
Scrabo said:
jack welch wasn’t exactly the great CEO that people think he was.

I remember in the early 2000’s he attempted to buy the company I work for and that died a quick death thankfully
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Yea that guy was brutal
 
Scrabo said:
And also used some “creative accounting “ to hide the truth, Immelt continued it through his reign.
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Just trying to protect their golden parachutes...seems commonplace amongst upper management.
 
Capt. Geoffrey Thorpe said:
O.M.G. Blasphemy!

Where I used to work, a one time CEO worshiped at the alter of Jack Welch and how he made GE the model for what we should be to really boost the P/E ratio. I had to waste weeks learning all about BIFF (Big Improvements For Free - or whatever it was called) and management at every level, and, and, and...
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For a very long time I have been amused at how faddish the business environment can be. In the early to mid-80s everyone was In Search of Excellence, and McKinsey was the go-to consulting factory.

In the latter 1980s the business bookshelves were groaning under the weight of tomes dedicated to understanding "lean production" and other Japanese management techniques, including William Ouchi’s Theory Z and The Art of Japanese Management by Richard Pascale and Anthony Athos. There were numerous predictions at the time the Japanese economy would surpass the US economy to become the largest in the world by the year 2000 (sound familiar? :rolleyes:.

Publishing books about managing companies seemed more lucrative than actually creating or running one. I was working in Big Oil in 1993, at the height of Jack Welch's reign at GE. I remember my boss at the time handing out copies of the prolific Noel Tichy's "Control Your Destiny Or Someone Else Will" (the title came from a J. Welch quote) as though it was some sort of cookbook..."mix these ingredients, in these quantities, bake for X minutes at Y temperature, and lo you too shall have your own mini-GE to be proud of.


Scrabo said:
jack welch wasn’t exactly the great CEO that people think he was.
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We are all a product of our times. Jack Welch's great strengths were to recognize where the money was being made in the economy (financial transactions, not making "stuff") and timing his exit almost perfectly.

The much vaunted manufacturing activities were really to allow GE to play the vendor financing game even better than the Chinese. By the time Welch was finished with GE it was a bank in disguise, and GE Capital WAS the company (Welch become famous for consistently forecasting GE quarterly earnings to the penny, something that cannot be accomplished in a manufacturing company). When the financial crisis hit it was GE Capital that just about took the whole company down, and would have if it had not been bailed out. By that point Neutron Jack had already retired and handed the mess over to Jeff Immelt.
 
Saw much the same thing when I was with Westinghouse in the 1990’s. After nearly going broke due to W Finance debacle (a lender of last resort which nearly took the whole company down (just like GE) the BOD brought in the McKenzie boys including one Michael Jordan as the CEO. Once they got a revolving line of credit, they began cannibalizing the company. Within a few short years, Westinghouse sold off all of its manufacturing assets including its nuclear, defense and jet engine divisions and became a media and broadcast company. Westinghouse, using it Group W Productions, bought CBS along with a ton of radio and tv stations, and eventually changed its name to CBS. Kind of sad in a way, but the Group W guys used to brag that they had more revenue and profit from their cartoons than the nuclear and defense divisions had in combination.
 
No good reason to hold it. There’s no requirement to ride the same horse back up and out of the canyon that you rode down into it.
 
Let'sgoflying! said:
I’m not sure why, but I’ve had a little GE stock for a long time, through the depicted decline.
Now my investment advisor wants me to dump it.
(Will that assure it’s meteoric clinb?)
Why did it make that big downhill slide?

...
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Because GE is not one of the handful of stocks that has been driving the market. As of end of 2nd Q ten stocks accounted for 116% of the S&P 500 Total Return index YTD. All the remaining stocks in the index had a combined return of minus 16%.
(the ten are, in order, AMZN, MSFT, AAPL, NFLX, FB, MA, V, ADBE, CSCO and NVDA)

There's a bunch of reasons the market continues to become more concentrated, including the current investor preference for passive, capitalization-weighted index strategies.

As for whether you should keep or sell GE, that's should be a function of how it fits in your overall portfolio and your investment criteria.

FWIW, the current situation of ever narrowing market leadership is not sustainable, but these things can go on a lot longer than one might imagine, so difficult to anticipate exactly when it might change. But if one takes a secular approach interest rates on the 10 year Treasury have recently broken a 26 year trend line, bond holdings likely should be short duration, interest sensitive stocks may underperform in the years ahead (those with overleveraged balance sheets may be in a heap of trouble) and those companies that can increase dividends may be the best place to hang out. Banks, Industrials, Materials, Health Care and Energy are the sectors I think have the best 5 year outlook on a secular basis. I am invested in these sectors on a global basis however, not just USA. Just my opinion though.
 
I quit following GE some years ago, but I have a different take on where their troubles lie - that they got distracted from business to get on the green train. They have been pushing all kinds of developmental green tech, despite some pretty high costs and limited markets. Brilliant that they managed to claw their way to 2nd place in the wind generation market. What did that do for their bottom line? They have only just barely turned that unit profitable and there are signs the market is declining. Overall, the push into green has been a loss for them.

Their desire for social good overrode their duty to shareholders.
 
FastEddieB said:
*I wish I had followed my own advice with both Enron and Pan Am!
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Lol yeah, I had World Com & ValuJet, held on too long. :(

A lot easier and less worrisome to just go with index funds. Vanguard is where mine is parked.
 
So whoever bought this when this thread was started has made about 20% to date.

If you would’ve done the options trade, you coulda bought a Bo’ with the profits.
 
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