GE-Let's Hope This is the Last Shoe to Fall

[leahcim]

Man, if my zecco account was ready I was planning to do a 18.5 limit. The low was 18.4. Anyone with market experience able to tell me if I my 18.5$ buy would have gone through today. Just wondering. I am kinda hoping it wouldn't have just because I would have lost out either way.

Do you think GE will go back down to 19?

Thanks

 

[al_bundy]

is it yahoo or is GE down today?

 

[mews]

Let's stop using the "other shoe" metaphor - you don't realize that you bother the "Ghost of Imelda Marcos' Shoe Closet" who rummages around, finds another one, :::Thump::: and waits until summoned again.

ta,
mews

 

[Leonidas]

Shhhhhh! You know who is listening!

 

[dm]

Just got back from golfing and I see my limit order went through at $18.50. My next one is at $15.00. I'm just rebalancing my asset allocation. Honest.

 

[James5v]

This market is simply crazy. I have thought of buying some more GE. I bought some at 22.50 and then got scared and took a profit at 24.40. However, I also have some I bought at 26.50 and bought some at 19.50. I guess at those prices the now 17.83 price is a good buy but who knows what this market is going to do. However, I am a long term optimist and feel that 3 or 4 years from now we will all be kicking ourselves for not buying more.

 

[ziggy29]

This market is simply crazy. I have thought of buying some more GE. I bought some at 22.50 and then got scared and took a profit at 24.40. However, I also have some I bought at 26.50 and bought some at 19.50. I guess at those prices the now 17.83 price is a good buy but who knows what this market is going to do. However, I am a long term optimist and feel that 3 or 4 years from now we will all be kicking ourselves for not buying more.

Agreed. When common sense tells you good companies can't go lower, they do.

And as for the ghost of Imelda, that would be truly scary because she's still alive, last I heard -- and the ghost of a closet would be truly supernatural!

 

[al_bundy]

my price target of $14 - $16 still stands

 

[chinaco]

This financial crisis could cause many business failures that have little to do with financial services. It is a set of dominoes that could begin falling in other industries and cause a chain reaction.

IMHO - if one is in equities... is a time to stay highly diversified. For the average small investor that would mean ETFs or mutual funds.

I do not believe that GE will fail... but they are going to be damaged and it is likely to take a while for them to recover (because of our economy). Their customers are in industries that require large capital expenditures. The government(s) is one of their customers... but the governments around the world are broke because of the impending boomer retirement and the bailout. Spending is going to be tight for a number of years.

Short of getting a warren buffet deal... I would not buy. IF you want to own it... buy berk hatty... then you can get the buffet deal.

 

[mews]

-- and the ghost of a closet would be truly supernatural!

Well, see, that's the current explanation for all the weirdness in the world !

ta,
mews

 

[haha]

This financial crisis could cause many business failures that have little to do with financial services. It is a set of dominoes that could begin falling in other industries and cause a chain reaction.

IMHO - if one is in equities... is a time to stay highly diversified. For the average small investor that would mean ETFs or mutual funds.

I do not believe that GE will fail... but they are going to be damaged and it is likely to take a while for them to recover (because of our economy). Their customers are in industries that require large capital expenditures. The government(s) is one of their customers... but the governments around the world are broke because of the impending boomer retirement and the bailout. Spending is going to be tight for a number of years.

Short of getting a warren buffet deal... I would not buy. IF you want to own it... buy berk hatty... then you can get the buffet deal.

I would like to say that based on keeping my eyes open for many years, this very well articulated opinion is mostly worthless as a guide to what to do. All scenarios, including any that I might make, are the same. We cannot know the future. What we do incontrovertibly know is that right now major US companies are very cheap, relative to anything most of us have ever seen during our entire investing lifetimes, relative to governments, relative to historical PE10s, relative to Tobin's Q.

Ponder that.

Ha

 

[Dawg52]

I would like to say that based on keeping my eyes open for many years, this very well articulated opinion is mostly worthless as a guide to what to do. All scenarios, including any that I might make, are the same. We cannot know the future. What we do incontrovertibly know is that right now major US companies are very cheap, relative to anything most of us have ever seen during our entire investing lifetimes, relative to governments, relative to historical PE10s, relative to Tobin's Q.

Ponder that.

Ha

I take it you don't agree.

 

[haha]

I take it you don't agree.

What I mean is, based on today's prices most large US companies will produce acceptable results over time for todays investors. Whch ones will be best, when they will stop going down, etc., etc. are mostly beyond knowing. Even the crappiest stuff may perform best, if it survives. But it will hard to do badly over time with high quality equities at today's prices.

Ha

 

[Gardnr]

What I mean is, based on today's prices most large US companies will produce acceptable results over time for todays investors. Whch ones will be best, when they will stop going down, etc., etc. are mostly beyond knowing. Even the crappiest stuff may perform best, if it survives. But it will hard to do badly over time with high quality equities at today's prices.

Ha

Yep, and GE currently yielding almost 7% is certainly attractive. And if any company can keep from cutting their dividend you'd certainly think that GE would be one of those.

 

[ziggy29]

Yep, and GE currently yielding almost 7% is certainly attractive. And if any company can keep from cutting their dividend you'd certainly think that GE would be one of those.

Agreed. Even if GE treads water for a few years before recovering, IF they can maintain this dividend through it and you can reinvest these high dividend yields at depressed prices, it would be a very solid long term play since it's a pretty safe bet they ain't going under. Again, that's IF they can maintain the dividend or at least close to it.

 

[clifp]

Agreed. Even if GE treads water for a few years before recovering, IF they can maintain this dividend through it and you can reinvest these high dividend yields at depressed prices, it would be a very solid long term play since it's a pretty safe bet they ain't going under. Again, that's IF they can maintain the dividend or at least close to it.

Next year GE's estimated earnings are $1.80 and this is from a company which traditionally produces earnings within a penny or two of estimates each quarter. I think it would take an outright depression before they cut dividends after saying they wouldn't cut them in 2009. Although there is a decent chance the 36 year streak of raising dividends may come to an end.

 

[al_bundy]

looking for a dividend play for some family and looked at GE. the dividend history says they cut the dividend back in 2000 - 2002. for now i'm going to tell them Verizon of Pfizer

 

[FIRE'd@51]

looking for a dividend play for some family and looked at GE. the dividend history says they cut the dividend back in 2000 - 2002. for now i'm going to tell them Verizon of Pfizer

Your source is incorrect. It probably didn't correct the back dividends for a stock split in 2000.

 

[FIRE'd@51]

Short of getting a warren buffet deal... I would not buy. IF you want to own it... buy berk hatty... then you can get the buffet deal.

I don't think I agree with this. GE at Friday's close yields 7%. True, Buffet's preferred yields 10%, but it is effectively convertible at a share price of 22.5, which 25% above Friday's close, so I think one could argue that buying GE outright today may be as good (or better) than Buffet's deal.

Furthermore, if you are retired and want dividend income, BRK doesn't pay a dividend, but you will get a dividend from direct ownership of GE.

 

[redrtbob]

Unfortunately GE is still about 1/2 a bank (GE Capital). When it was 60 under Jack Welch it was way over valued. Won't come back until financial mess is cleaned up. Buffett gives vote of confidence at 10%. I think Immelt will do whatever it takes to maintain AAA rating.

 

[clifp]

looking for a dividend play for some family and looked at GE. the dividend history says they cut the dividend back in 2000 - 2002. for now i'm going to tell them Verizon of Pfizer

You forget to account for the 3 for 1 split of GE stock back in 2000.
Per GE's website there dividend has increase for .10/qtr back in 1998 to .31 today over a tripling of income.

Over the last 20 years GE has increased its dividend at annual rate of 12.3%, now I realize that this time is different and GE did slash its dividend during the great depression (and the stock priced dropped to 8% of its peak price in 29.) Incidentally the Great Depression is when the bank part of GE (GE finance) started.

 

[chinaco]

I would like to say that based on keeping my eyes open for many years, this very well articulated opinion is mostly worthless as a guide to what to do. All scenarios, including any that I might make, are the same. We cannot know the future. What we do incontrovertibly know is that right now major US companies are very cheap, relative to anything most of us have ever seen during our entire investing lifetimes, relative to governments, relative to historical PE10s, relative to Tobin's Q.

Ponder that.

Ha

Oops.. I do apologize for horning in on the stock picking forum... that is the topic. Got here from the portal.

I have pondered it.

I have a coworker that has ridden GE sideways for several years since the tech bust. GE is a semi-regular topic of discussion.

I sold my last few mega-cap stocks (other similar leaders) when I realized that they performed marginally better (if even that) against large cap indexes.

Concentration can yield better returns than diversification if one is a good enough disciplined portfolio manager. As I approach ER I have been sticking with broader diversification.

GE has often beaten the S&P in the past (when Jack ran it). Jack appeared to be good at keeping earning consistent and attractive ( accounting techniques)... My former boss referred to it as earnings smoothing. Jack also performed aggressive portfolio management (trimming of low earning businesses). Plus he would lay off people (trim 10% of the lowest performers keep everyone on their toes). All of this resulted in a historic return that was a couple points better than the S&P 500 by a couple of points (in the past). Jack is gone and SOX is in.

If GE beats the index... it will probably not do so by much... that (potential) benefit (if achieved) will have a cost of taking on company risk... With GE, the risk is fairly low over the long haul.

You will have market risk either way by the nature of being in the market unless you hedge... but using a hedge will lower returns.

I hope GE does well... I own it! But I own it in a fund.

 

[soupcxan]

Amazing. GE is trading in the 16's today. And I thought it was cheap at 22! Things are starting to look like the entire capital side of the business is worthless.

 

[Disappointed]

Bought early this morning at $17.20, I should have broadcasted it so you guys can short the stock.

mP

 

[haha]

Oops.. I do apologize for horning in on the stock picking forum... that is the topic. Got here from the portal.

I have pondered it.

I'm sorry I sounded snippy. You make a good point.

I own GE, and achieve what I hope to be adequate diversification by owning many other securities. So far, diversification among equity classes has not been much help at avoiding loss.

For me, funds suck up too much of the yield.

Ha