Bullish/bearish on GE? Make your case here - new lows today

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tmcc
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Bullish/bearish on GE? Make your case here - new lows today

Post by tmcc » Wed Aug 15, 2018 12:15 pm

GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by mxs » Wed Aug 15, 2018 12:23 pm

GE does a lot more than lightbulbs and appliances. They also have serious issues that could cause them to go to zero within a year, or turn around and double. No one knows. I would not gamble on them, in fact I sold some shares a couple weeks ago. Ford at the bottom in 2008 was a better bet that made more sense. I knew it at the time but didn't pull the trigger.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by mickroark » Wed Aug 15, 2018 12:32 pm

I learned a long time ago to never try and catch a falling knife. :arrow: This also applies to stocks. :confused

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by DesertDiva » Wed Aug 15, 2018 12:52 pm

The Bogleheads® Philosophy
1. Develop a workable plan
2. Invest early and often
3. Never bear too much or too little risk
4. Never try to time the market
5. Use index funds when possible
6. Keep costs low
7. Diversify
8. Minimize taxes
9. Keep it simple
10. Stay the course
♫ Stocks go up ♫ Stocks go down ♫ Stocks go up ♫ Stocks go down ♫ - Second verse same as the first

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Nate79 » Wed Aug 15, 2018 12:58 pm

I do not gamble. So no thanks.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by dodecahedron » Wed Aug 15, 2018 1:00 pm

I live in an area with many GE employees and an even larger number of GE retirees. GE used to be a huge employer in this area and still has significant size operations but layoffs have been a recurring headline through my time here. My late husband worked there briefly (in fact the GE job was what brought our family here almost 30 years ago.)

Yes, they do far more than light bulbs and appliances. Actually they sold off the appliance business in 2016. A Chinese conglomerate called Haier bought the right to use the name "GE" in marketing their products through 2056. So you will still see GE dishwashers, etc. on showroom floors but GE neither makes nor profits from their sale.

They make medical equipment (expensive imaging devices), aircraft engines, turbine generators, and a bunch of other stuff that is not on typical consumer's radar screens but is sold to other businesses.

Back in the 90s, GE Capital was a huge chunk of the business and it owned firms like the now-defunct Kidder Peabody and a bunch of other financial companies that were not household names for most folks. Top management at the time clearly didn't understand what the heck was happening under the hood. (Ask me how I know. No, don't.) Lots of what was GE Capital was sold off. They also owned NBC for decades but sold that off a few years ago.

It is not at all clear what you are betting on when you buy GE because they have been in and out of so many markets. I guess you are betting on the skill of the current managers to sell off chunks of the company for more than the market currently thinks they are worth. It's not something like Tesla, where you are betting on the company to manufacture and market products in a particular economic sector.

I am very sorry for all the local folks near me who still hold significant positions in GE for sentimental reasons, inertia, etc. My late husband had a lot of vested and unvested GE stock options when he left the company in the mid 1990s. I remember that he told me that the GE corporate cafeteria he used had an electronic display that prominently displayed the stock price along with other random facts (like the number of days without workplace injuries). The mood was very upbeat then.

Looking at the stock chart since then, I am glad that he sold off the vested ones when he left and his new employer kindly reimbursed him for the value of the unvested options he was leaving behind when they recruited him away.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by nisiprius » Wed Aug 15, 2018 1:20 pm

I expressed an opinion of sorts in GE and the myth of "safe blue-chip stocks." In the year 2018, I don't think there's any more reason for anyone following the Bogleheads investment philosophy to invest in individual stocks--even the stocks of gigantic "diversified" companies--than there is in allocating 10% of their portfolio to good lottery tickets. So I see no need to decide whether I am bullish or bearish on GE.
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by jharkin » Wed Aug 15, 2018 1:55 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.
They didn't even make your oven. They sold the GE appliance brand name to a holding company years ago.

GE has (had) so many business that light bulbs are probably barely even a rounding error. Consumer appliances, Jet engines, power plant equipment ranging from the generators to gas turbines to drive them (GE Power), smart manufacturing, financing (GE Capital) , diagnostic imaging equipment (GE Healthcare), basic research in various fields & venture capital investing in alternative energy and other high tech startups (GE Global Research), and on and on.

My previous employer had a partnership with them on the smart factory thing... that blew up.
I have an old college friend who works in GE Research. Used to love it but says morale is in the tank and everybody wants to leave.

I'm a pure indexer, but even if I was not I would be cautious about GE right now. They might be a bargain... but then again they might no longer exist in 5 years.

Is Buffett buying? :confused

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Taylor Larimore » Wed Aug 15, 2018 2:09 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE
tmcc:

I have not the slightest idea whether GE stock will go up or down. I do know that the current price represents the estimated value of all investors and is a lot more accurate than any guess of mine. Investing in individual stock as more akin to speculating than investing.

This is what experts say:
Alpha Architect: "Between 1983 and 2006, around 73% of firms had a drawdown larger than 50% (the S&P 500’s maximum drawdown during this period was around 44%). Holding one individual stock can be very risky!"

Barber and Odean Study: "Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earned an annual return of 11.4 percent, while the market returned 17.9 percent."

Michael Batnick, CFA: "Ordinary investors would be well served if they thought for a second about who they were transacting with. Over 90% of today’s volume is done by institutions, so chances are that your counter-party has done their homework."

Brett Arends, Wall Street Journal columnist: "Buy individual stocks only as a gamble."

Benjamin Graham: "I have little confidence, even in the ability of analysts, let alone untrained investors, to select common stocks what will give better than average results."

Bill Bernstein, author of The Four Pillars of Investing: "Picking individual stocks is like volleying with the Williams sisters."

Jack Bogle: "Attempting to build an investment program around a handful of individual securities is, for all but the most exceptional investors, a fool's errand."

Adam Bold, author, adviser: "Mutual funds don't have the pizzazz of the hot stocks of the moment. If you're looking for entertainment, go gambling in Las Vegas. But if you want to accumulate real money for your retirement and other goals, mutual funds are the safer bet."

James Dahle, MD, financial advisor, and author of The White-Coat Investor: “Think you know how to pick stocks? Then guess again. Every time you buy or sell the person on the other side of the trade likely has an IQ of 160, spends 70 hours per week analyzing his industry, and has access to computing power and databases you can only dream of.”

Dalbar Research Report (July 15, 2003): "The average equity investor earned a paltry 2.57% annually; compared to inflation of 3.14% and the 12.22% the S & P 500 index earned annually for the last 19 years."

Charles Ellis author of Winning the Loser's Game: "If you, like Walter Mitty, still fantasize that you can and will beat the pros, you'll need both luck and prayer."

Kenneth French: Former President of the American Finance Association: "The market is smarter than we are and no matter how smart we get, the market will always be smarter than we are."

Sy Harding, Forbes contributor: "My advice – avoid individual stocks! Even experienced full-time professional money managers, with staffs of trained people performing research, with access to data, software, and corporate contacts that most part-time investors could not come close to duplicating, struggle to match the market’s performance by buying, holding, or selling individual stocks."

Danial Kahneman, Nobel Laureate: "There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance."

Kiplinger Personal Finance “Eight Stocks to Buy Now” in the January, 2015 forecast issue under-performed its “Five Stocks to Sell” twelve months later.

Michael Lewis, former bond broker and financial journalist: "A vast industry of stockbrokers, financial planners, and investment advisers skims a fortune for themselves off the top in exchange for passing their clients' money on to people who, as a whole, cannot possibly outperform the market."

Mathwizard: The vast majority of trades you would make are between you and a professional investor. Both of you are assigning a value to the stock, and one of you thnks the price is high and another thinks it is low. Who do you suppose is more likely to be right.

Standard & Poor's: When the S&P 500 index was officially formed in 1957 to its 50th anniversary in 2007, only 86 of the original 500 companies still remained.

Larry Swedroe, author of many financial books: "Owning individual stocks and sector funds is more akin to speculating, not investing."

David Swensen, Chief Investment Officer of Yale University: "There's no way that spending a few hours a week looking at individual securities is going to equip an investor to compete with the incredibly talented, highly qualified, extremely educated individuals who spend their entire professional careers trying to pick stocks."

Eric Tyson, author of Mutual Funds for Dummies: The notion that most average people and non-investment professionals can, with minimal effort, beat the best full-time, experienced money managers is, how should I say, ludicrous and absurd."
Best wishes.
Taylor
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by abuss368 » Wed Aug 15, 2018 3:01 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE
Many years ago we traded individual stocks very frequently. Only upon growing our investment knowledge did we learn Jack Bogle’s investing principles. Mr. Bogle has often said that individual investors should not hold stocks as they are not compensated for the risks.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Dottie57 » Wed Aug 15, 2018 3:17 pm

Bear here.

I used to buy their appliance. The last few are not as good.

So no, GE is not my friend.

I

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by DaftInvestor » Wed Aug 15, 2018 3:23 pm

BIG BEAR.
They used to be a large diversified company. They have spun off many of their businesses over the years (financial services, etc.) and the business you know them by (Appliances, light-bulbs) is getting clobbered by foreign companies (walk into an appliance store and see how many LG, Samsung, etc. appliances they are selling now). They are a has-been. You will have a nice Tax-Loss-Harvest opportunity when you are ready :)

Why ask the question after you made the purchase? And why not go ask the question in a forum that actually discusses individual stocks versus one that does the opposite?

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by tmcc » Wed Aug 15, 2018 3:36 pm

https://www.bloomberg.com/view/articles ... t-of-reach
DaftInvestor wrote:
Wed Aug 15, 2018 3:23 pm
BIG BEAR.
They used to be a large diversified company. They have spun off many of their businesses over the years (financial services, etc.) and the business you know them by (Appliances, light-bulbs) is getting clobbered by foreign companies (walk into an appliance store and see how many LG, Samsung, etc. appliances they are selling now). They are a has-been. You will have a nice Tax-Loss-Harvest opportunity when you are ready :)

Why ask the question after you made the purchase? And why not go ask the question in a forum that actually discusses individual stocks versus one that does the opposite?
scratching the market timing itch 8-) extreme highs/lows are opportunity. time will tell how it goes.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by DaftInvestor » Wed Aug 15, 2018 3:42 pm

tmcc wrote:
Wed Aug 15, 2018 3:36 pm
https://www.bloomberg.com/view/articles ... t-of-reach
DaftInvestor wrote:
Wed Aug 15, 2018 3:23 pm
BIG BEAR.
They used to be a large diversified company. They have spun off many of their businesses over the years (financial services, etc.) and the business you know them by (Appliances, light-bulbs) is getting clobbered by foreign companies (walk into an appliance store and see how many LG, Samsung, etc. appliances they are selling now). They are a has-been. You will have a nice Tax-Loss-Harvest opportunity when you are ready :)

Why ask the question after you made the purchase? And why not go ask the question in a forum that actually discusses individual stocks versus one that does the opposite?
scratching the market timing itch 8-) extreme highs/lows are opportunity. time will tell how it goes.
Yes - they are opportunities - opportunities to gamble and lose money.
Extreme lows can also be an indicator that a company is in serious trouble - it's usually what happens before the company disappears - there are hundreds of "company too big to fail" examples where this has happened.
If you are serious (and not simply trolling here) you need to decide how much you are willing to lose before you decide to find another way to have the itch go away.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by JoeRetire » Wed Aug 15, 2018 3:44 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.
Why would $8.50 be an ultimate bottom?
I don't really know anything about the company other than that I buy their light bulbs and they made my oven.
Sounds like a good basis for choosing individual stocks.
Please offer your bull/bear case on the forward ROE
I'm swordfishish on GE. Good luck with your $2000 gamble.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by munemaker » Wed Aug 15, 2018 3:46 pm

Betting on loser companies is a fool's game.

This is not investing. It is speculating, or in this case...gambling with the house against you.

Stick to a low cost, diversified equity mutual fund from Vanguard or Fidelty. You will do better in the long run.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by tmcc » Wed Aug 15, 2018 4:59 pm

munemaker wrote:
Wed Aug 15, 2018 3:46 pm
Betting on loser companies is a fool's game.

This is not investing. It is speculating, or in this case...gambling with the house against you.

Stick to a low cost, diversified equity mutual fund from Vanguard or Fidelty. You will do better in the long run.
the house is always wrong at the top and at the bottom.

if you dont have an actual opinion on the company, don't post. follow instructions.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by DaftInvestor » Wed Aug 15, 2018 5:02 pm

tmcc wrote:
Wed Aug 15, 2018 4:59 pm

the house is always wrong at the top and at the bottom.
Yup - but the only problem you have is you have no idea if this is the bottom.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by tmcc » Wed Aug 15, 2018 5:27 pm

DaftInvestor wrote:
Wed Aug 15, 2018 5:02 pm
tmcc wrote:
Wed Aug 15, 2018 4:59 pm

the house is always wrong at the top and at the bottom.
Yup - but the only problem you have is you have no idea if this is the bottom.
that is a good thought. at this time, probability says otherwise. risk vs return is very low buying at historical lows relative to high volatility.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by kmurp » Wed Aug 15, 2018 5:38 pm

dodecahedron wrote:
Wed Aug 15, 2018 1:00 pm
I live in an area with many GE employees and an even larger number of GE retirees. GE used to be a huge employer in this area and still has significant size operations but layoffs have been a recurring headline through my time here. My late husband worked there briefly (in fact the GE job was what brought our family here almost 30 years ago.)

Yes, they do far more than light bulbs and appliances. Actually they sold off the appliance business in 2016. A Chinese conglomerate called Haier bought the right to use the name "GE" in marketing their products through 2056. So you will still see GE dishwashers, etc. on showroom floors but GE neither makes nor profits from their sale.

They make medical equipment (expensive imaging devices), aircraft engines, turbine generators, and a bunch of other stuff that is not on typical consumer's radar screens but is sold to other businesses.

Back in the 90s, GE Capital was a huge chunk of the business and it owned firms like the now-defunct Kidder Peabody and a bunch of other financial companies that were not household names for most folks. Top management at the time clearly didn't understand what the heck was happening under the hood. (Ask me how I know. No, don't.) Lots of what was GE Capital was sold off. They also owned NBC for decades but sold that off a few years ago.

It is not at all clear what you are betting on when you buy GE because they have been in and out of so many markets. I guess you are betting on the skill of the current managers to sell off chunks of the company for more than the market currently thinks they are worth. It's not something like Tesla, where you are betting on the company to manufacture and market products in a particular economic sector.

I am very sorry for all the local folks near me who still hold significant positions in GE for sentimental reasons, inertia, etc. My late husband had a lot of vested and unvested GE stock options when he left the company in the mid 1990s. I remember that he told me that the GE corporate cafeteria he used had an electronic display that prominently displayed the stock price along with other random facts (like the number of days without workplace injuries). The mood was very upbeat then.

Looking at the stock chart since then, I am glad that he sold off the vested ones when he left and his new employer kindly reimbursed him for the value of the unvested options he was leaving behind when they recruited him away.
I think we must live in the same area. It was very sad to see all the GE retirees hit with the stock price collapse and dividend cut at the same time now twice in the last 10 years. We held some GE inherited from my late father in law that we got at around $55 per share and held for sentimental reasons until we couldn’t stand it anymore last fall.
There’s no quick turnaround that I see, and at this point my fear is that further erosion would lead to closure or significant downsizing of their R&D center.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by nisiprius » Wed Aug 15, 2018 5:47 pm

tmcc wrote:
Wed Aug 15, 2018 5:27 pm
DaftInvestor wrote:
Wed Aug 15, 2018 5:02 pm
tmcc wrote:
Wed Aug 15, 2018 4:59 pm

the house is always wrong at the top and at the bottom.
Yup - but the only problem you have is you have no idea if this is the bottom.
that is a good thought. at this time, probability says otherwise. risk vs return is very low buying at historical lows relative to high volatility.
How do you measure an "historical low?" Relative to what starting point?

Source

Image

GE had an adjusted price of $0.77/share on 1/3/1962, and it is at $11.57/share today, so it is well above its historical low. In fact it is at least 14 times higher than its it was in 1962. Heaven only knows how much higher it is today than its adjusted price when the DJIA was created in 1896. Probably hundreds of times higher.

On the other hand, GE at $23.14/share in 2002 certainly looked like it was at a very low low--yet you would have lost a lot of money between now and then.
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by JoeRetire » Wed Aug 15, 2018 6:24 pm

jharkin wrote:
Wed Aug 15, 2018 1:55 pm
tmcc wrote:
Wed Aug 15, 2018 12:15 pm

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.
They didn't even make your oven. They sold the GE appliance brand name to a holding company years ago.

GE has (had) so many business that light bulbs are probably barely even a rounding error.
And they've been trying to dump their light bulb business for years, with no takers so far.

Maybe it doesn't really matter if you know anything at all about a company you want to invest in?

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by dogagility » Wed Aug 15, 2018 6:31 pm

JoeRetire wrote:
Wed Aug 15, 2018 6:24 pm
Maybe it doesn't really matter if you know anything at all about a company you want to invest in?
It doesn't! As long as you invest in all of them... :beer
Taking "risk" since 1995.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by JoeRetire » Wed Aug 15, 2018 6:33 pm

dogagility wrote:
Wed Aug 15, 2018 6:31 pm
JoeRetire wrote:
Wed Aug 15, 2018 6:24 pm
Maybe it doesn't really matter if you know anything at all about a company you want to invest in?
It doesn't! As long as you invest in all of them... :beer
I'm with you there. But that doesn't seem to be the approach the OP is using.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by LadyGeek » Wed Aug 15, 2018 7:10 pm

I removed an off-topic interchange which was derailing the thread. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by iamlucky13 » Wed Aug 15, 2018 7:50 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE
I don't think that's right. I'm pretty sure I paid a little over $6 a share in 2008, when it was one of the first individual stock investments I ever made.

I think I sold my original dollar value's worth around $30 and was really happy with it. I also was increasingly aware that my gains had been far more about luck than skill, and planned to dollar cost average out of it quarterly for a year. Shortly after I made my first planned sale, the rot started to get exposed and the price plummeted.

I haven't finished selling it off as a result - it's difficult to give up hope it will recover, and the potential downside has shrunk considerably anyways - but the systematic and deep issues that the former CEO's obfuscated do not give me confidence that even speculating by continuing to hold what I have left is rational, much less that I should buy more.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Taylor Larimore » Wed Aug 15, 2018 8:19 pm

tmcc wrote:extreme highs/lows are opportunity.
Or fraught with danger.

Best wishes.
Taylor
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by sillysaver » Wed Aug 15, 2018 8:43 pm

They make some of the best aircraft engines in the world.

However, it seems GE keeps discovering problems due to their assortment of strange business dealings, like the sale of an Irish subprime mortgage portfolio and the recent write-down of massive long-term care insurance losses. They long ago ceased being an industrial company and became a financial conglomerate with many unrelated businesses. Jack Welch is well known for GE's financial engineering and its uncanny ability to continue to hit earnings estimates, but during that time, their reporting was opaque. Now that Flannery is trying to clean up, they are finding such problems, and it's hard to get a sense of when these issues will all be resolved. For that reason, I wouldn't touch this stock with a ten-foot pole.

By the way, I was with GE as an employee for about a year. I joined at the worst time, in early 2017 and was laid off with many at the end of the year.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by dogagility » Wed Aug 15, 2018 8:46 pm

sillysaver wrote:
Wed Aug 15, 2018 8:43 pm
...I wouldn't touch this stock with a ten-foot pole.

By the way, I was with GE as an employee for about a year. I joined at the worst time, in early 2017 and was laid off with many at the end of the year.
And that, OP, is your answer. Gleaned from the inside.
Taking "risk" since 1995.

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whodidntante
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by whodidntante » Wed Aug 15, 2018 8:52 pm

mxs wrote:
Wed Aug 15, 2018 12:23 pm
Ford at the bottom in 2008 was a better bet that made more sense. I knew it at the time but didn't pull the trigger.
20/20, that hindsight. Ford should have gone bankrupt in my opinion. The reason they didn't is the Ford family wanted to retain control of the company.

killjoy2012
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by killjoy2012 » Wed Aug 15, 2018 9:00 pm

All of the comments in this thread are interesting, but the reality is that hindsight is 20/20, the stock market isn't rationale (e.g. look at Tesla's evaluation / market cap), and no one knows what the future holds for GE.

I personally don't see them going bankrupt. I do think they have a long road to recovery and the stock price will take significant time to recover, but the company will recover. Albeit as a much smaller, different company than what Jack handed to Jeff.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by AlohaJoe » Wed Aug 15, 2018 9:36 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .
[...]
I don't really know anything about the company other than that I buy their light bulbs and they made my oven.
And people are worried that indexing is going to take over the world and ruin capitalism.....

drk
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by drk » Wed Aug 15, 2018 9:37 pm

I can think of far more exciting and fun ways to blow $2k in play money. While GE will bottom at some point, I don't see a bull case for it.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by dogagility » Thu Aug 16, 2018 4:53 am

AlohaJoe wrote:
Wed Aug 15, 2018 9:36 pm
tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .
[...]
I don't really know anything about the company other than that I buy their light bulbs and they made my oven.
And people are worried that indexing is going to take over the world and ruin capitalism.....
:sharebeer
Taking "risk" since 1995.

columbia
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by columbia » Thu Aug 16, 2018 5:31 am

dogagility wrote:
Thu Aug 16, 2018 4:53 am
AlohaJoe wrote:
Wed Aug 15, 2018 9:36 pm
tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .
[...]
I don't really know anything about the company other than that I buy their light bulbs and they made my oven.
And people are worried that indexing is going to take over the world and ruin capitalism.....
:sharebeer
In all seriousness: this is why indexing is great. I’ll get to scoop up some more GE tomorrow (via Vanguard 500), when my 403b purchase goes through.

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jharkin
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by jharkin » Thu Aug 16, 2018 6:54 am

JoeRetire wrote:
Wed Aug 15, 2018 6:24 pm

And they've been trying to dump their light bulb business for years, with no takers so far.
Good point... Does anybody even buy GE light bulbs anymore? I've always been partial to Phillips ;)

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CyclingDuo
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by CyclingDuo » Thu Aug 16, 2018 8:33 am

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE
If you follow the sector of gas turbine engines that is a major component of GE, as an owner of GE stock you need to clue in on Siemens and Mitsubishi-Hitachi Power Systems as well to see what they are all saying about that business segment. Tip: it's not good (see Siemen's Q3 earnings call). Even with lowered guidance for that end of GE's business that they made earlier this year, guidance is being lowered again by these companies due to the reality of what is going on with demand and services in that segment. I would venture to guess that is why the recent additional weakness in the share price has created a new 9 year low. That is just one of the core issues currently impacting the company. Personally, I remain a bear on the shares even though an optimist would like to think that somebody ought to be able to turn the company around. There are just too many other bullish investments and businesses for the long haul with better valuations to consider if you are talking about individual stocks.

That being said, we picked up shares of GE around $10-12 during the Financial Crisis for our kids college fund accounts, and fortunately cashed all of them in to help pay tuition when they were up in the mid 20's to low 30's. The purchase was made along with shares of other stocks at the time simply based on the US Market is Going Out of Business sale that was available to those willing to dip their toes in the water when everything was getting thrown out with the bath water. The sale of the GE shares was made to fund ongoing tuition costs at the time between 2012-2017. At least in the case of GE, selling the shares we bought was simply the luck of timing of when those appreciated share funds were needed. We also sold plenty of shares of other bear market sale price stock purchases to fund tuition in those years that have done nothing but continued to go up since the kids finished school - so it's not like any crystal ball was used with regard to any of the individual stocks. It was simply the timing of when their tuition bills were due, and willing to buy when nothing but fear and gloom permeated everyone's minds (reading Stan Weinstein's book years earlier had encouraged me). :beer

Will the current dividend yield approaching 4% put a floor in the stock or not? Is the true trading range for their current business and valuation $7-$11? Will the company survive? It most likely will take a very long period of time when people stop talking about the company in which all interest about GE dwindles, and the management proves they can shore up the company before the new GE emerges - if ever. Best of fortune with your GE shares.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by nedsaid » Thu Aug 16, 2018 3:28 pm

General Electric, Our Lady of Perpetual Disappointment, has never failed to disappoint. The thing has been an utter dog since the day I purchased it. The company had an underlying growth rate of probably 6%-8% during the 1990's and financial engineering by Jack Welch convinced the Street that growth was 15%. Expectations got way out of kilter and the P/E got up to 45. I paid way too much for a company with a lot of problems even though I purchased at a "bargain" price. By the way, it is up 8 cents today and trades at $12.30.
A fool and his money are good for business.

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Sheepdog
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Sheepdog » Thu Aug 16, 2018 4:33 pm

The last year I bought and held GE was at a time I considered that the company was basically a mutual fund since it owned so many businesses . I owned it before 1996. Looking back in my records since 1998 it was 73 3/8 on 1/1/98 and 102.00 on 1/1/99 and 154.00 on 1/1/00 and then there was a 3 for 1 split that year so that it was 47.94 on 1/1/01 and then down to 40.08 1/1/02. I got the religion in 02 from Taylor L, et al. at the M* Diehards, when I said something about GE being like a mutual fund. You all know what Taylor said. No more individual stocks for me.
edited to remove some information that is hearsay , so I should not have entered as it
Last edited by Sheepdog on Thu Aug 16, 2018 4:42 pm, edited 2 times in total.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by oldcomputerguy » Thu Aug 16, 2018 4:34 pm

Can't see myself "making my case" for purchasing any individual stock. Sorry.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by nisiprius » Thu Aug 16, 2018 8:40 pm

Has there ever been a case of a company being dropped from the Dow and being reinstated later?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Spedward » Thu Aug 16, 2018 8:43 pm

I bought 666 shares of GE for 6.66 intraday in 2008 and sold it for 20-something a share a number of years later. It was the last single share of stock I have bought, and likely will by.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Nicolas » Thu Aug 16, 2018 11:06 pm

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De gustibus non est disputandum.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by WanderingDoc » Thu Aug 16, 2018 11:15 pm

tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE
They manufacture CT and MRI scanners, so that indirectly benefits me :D However, don't know enough about individual stock investing to have any conviction on buying shares.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by WildBill » Thu Aug 16, 2018 11:23 pm

Howdy

GE goes into the “too hard to figure out” pile for me. I only invest in individual stocks if I am convinced there is compelling value.

I cannot decipher GE’s financials (a lot of people at GE seem to be having the same problem)
so I am ignoring it as an investment.

Happy stockpicking

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Valuethinker » Fri Aug 17, 2018 4:13 am

CyclingDuo wrote:
Thu Aug 16, 2018 8:33 am
tmcc wrote:
Wed Aug 15, 2018 12:15 pm
GE is doing decade lows today. I bought $2000 worth at 12.xx today .

In 2008, their low was ~$8.50. Today they're trading $12.xx. I can see it doing 8 unless it goes to zero which means I'll take heat for about 1/3 of my position size. If their old low marks the ultimate bottom.

I don't really know anything about the company other than that I buy their light bulbs and they made my oven.

Please offer your bull/bear case on the forward ROE
If you follow the sector of gas turbine engines that is a major component of GE, as an owner of GE stock you need to clue in on Siemens and Mitsubishi-Hitachi Power Systems as well to see what they are all saying about that business segment. Tip: it's not good (see Siemen's Q3 earnings call). Even with lowered guidance for that end of GE's business that they made earlier this year, guidance is being lowered again by these companies due to the reality of what is going on with demand and services in that segment. I would venture to guess that is why the recent additional weakness in the share price has created a new 9 year low. That is just one of the core issues currently impacting the company. Personally, I remain a bear on the shares even though an optimist would like to think that somebody ought to be able to turn the company around. There are just too many other bullish investments and businesses for the long haul with better valuations to consider if you are talking about individual stocks.
It's finding a bottom on the pension fund deficit and other potential financial liabilities (from the insurance business they sold several years ago?).

The company was financially engineered to a much higher degree than I realized.

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AtlasShrugged?
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by AtlasShrugged? » Fri Aug 17, 2018 6:45 am

Wow....a lot of bears on GE. Time for a contrarian, or bullish view. I posted on this question some time ago.

My wife recently purchased a block of shares, and then a second block earlier this year in her Roth. I asked her about it. She said (I paraphrase): This is GE. They have been a component of the Dow for practically forever. This company has gone through two world wars, a great depression, a bunch of recessions, some mediocre chairmen, and a great recession. In every case, this company found the person and/or the wherewithal to persevere, and to thrive. I am making my bet on the long-term prospects of GE. Are people going to stop needing power? Stop flying? Stop getting sick? Nope. Considering their adaptability and track record in the past century, GE is a pretty safe bet - LONG TERM (meaning multiple decades).

Her money, her choice (as an aside, I am all low cost index funds, save some inherited stock). But I found her rationale interesting. If you look over a century, and consider how they have overcome all of the challenges of the last 100 years, then GE is a screaming buy for the patient investor.

Bogleheads, in 2048, I will update you, assuming I am still alive. :happy
“If you don't know, the thing to do is not to get scared, but to learn.”

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GoldStar
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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by GoldStar » Fri Aug 17, 2018 7:19 am

AtlasShrugged? wrote:
Fri Aug 17, 2018 6:45 am
Wow....a lot of bears on GE. Time for a contrarian, or bullish view. I posted on this question some time ago.

My wife recently purchased a block of shares, and then a second block earlier this year in her Roth. I asked her about it. She said (I paraphrase): This is GE. They have been a component of the Dow for practically forever. This company has gone through two world wars, a great depression, a bunch of recessions, some mediocre chairmen, and a great recession. In every case, this company found the person and/or the wherewithal to persevere, and to thrive. I am making my bet on the long-term prospects of GE. Are people going to stop needing power? Stop flying? Stop getting sick? Nope. Considering their adaptability and track record in the past century, GE is a pretty safe bet - LONG TERM (meaning multiple decades).

Her money, her choice (as an aside, I am all low cost index funds, save some inherited stock). But I found her rationale interesting. If you look over a century, and consider how they have overcome all of the challenges of the last 100 years, then GE is a screaming buy for the patient investor.

Bogleheads, in 2048, I will update you, assuming I am still alive. :happy
So her first statement of reason has already been tossed out the window since they are no longer in the Dow.
People will continue to need power, etc - what she doesn't realize is that people are less and less relying on GE to provide all these things as other companies eat their lunch. Many companies adapt until they are no longer able to - that's what's happening to GE.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by Valuethinker » Fri Aug 17, 2018 8:05 am

AtlasShrugged? wrote:
Fri Aug 17, 2018 6:45 am


Her money, her choice (as an aside, I am all low cost index funds, save some inherited stock). But I found her rationale interesting. If you look over a century, and consider how they have overcome all of the challenges of the last 100 years, then GE is a screaming buy for the patient investor.

Bogleheads, in 2048, I will update you, assuming I am still alive. :happy
Although at the time one might have made the same argument for Westinghouse?

The life of corporations is not as long as we might think. I think of the Dow in 1910 the only stock still in it is Exxon (Standard Oil of New Jersey)? Although JP Morgan might be another. Various other companies have merged and their descendants are probably still in (Dupont for example).

GE's businesses might survive or adapt, but the conglomerate itself might not continue in its present form.

It's the pension and other liabilities - that could sink them, even if the underlying businesses perform.

That's the trouble with financial engineering - it can sink perfectly good companies.

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Re: Bullish/bearish on GE? Make your case here - new lows today

Post by nisiprius » Fri Aug 17, 2018 10:46 am

Of course, if we're going to try to play the single-stock evaluation game, you have to ask, of all the various companies that have been beaten down and look like they're in desperate shape, why is GE the one you would choose to invest in? Among other things, isn't it one of the companies in which it is least likely that you have spotted something that other investors have overlooked?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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