General Electric stock- to buy or not to buy? I've had GE stock for a long while as part of my 'safe' portfolio. Well, as you all know by now the safe, secure steady dividend paying days are over. At least for awhile. I've been trying to decide wether I want to stay where I'm at or buy more at current prices. Some of my random thoughts in no particular order: The company base is good, small appliances aside, there's not a lot of competition on the large production side & the military contracts are stable. From what I can find out GE has a huge cash reserve. GE is going to pay out huge amounts in retirement & insurance in the near future. Are they 'to big to fail'?, would President Trump allow a bailout & risk being labeled just another politician? Will GE trim down to its proven profitable core & eventually (5 years or so) return to their previous status? I've a lot more thoughts & questions but no answers. In my lifetime GE has always been a huge profitable company, an immovable rock of safety & dividends. Times change & I'm afraid the past is coloring my judgment but man o man $12.97 a share is tempting. Very very tempting. Thoughts & best guesses please.

I have been selling $12.50 puts on Ge every two weeks or so for half a year. That should tell you my opinion. There is a basic intrinsic worth to it but a lot of people put that at $10 or less. If new management comes in and sell parts of it you will make some money. Otherwise stay away, just my opinion......jk

GE is in the process of selling off some of its businesses. Their only going to keep Power, Aviation, and Healthcare. Appliances is already gone. Lighting and Transportation are up for sale . Lighting is expected to be sold by years end. The analysts told Immelt to get rid of appliances and Lighting for years. I would have expected stock to go up when Immelt left/fired. Worthless CEO right there. Power is expected to be down into 2019. I would give Flannery a chance and see what happens. He is kind of ballsy!!! Even GE gets rid of a division, they will still have a hand in on it. IIRC in 2008 stock went down to $6/7 a share and Mede it back to $30. Now at $12 something. If you got time I would buy some of their stock. Are there better stocks, absolutely. I don't even look at my 401k much now, for I have 14 more years before retirement if the good Lord allows it.

Good Morning,

Trapguys always come through with facts (and fiction). Neverless, good information.

2nd

I wouldn't touch it. They are still losing money every quarter. Also, tomorrow they must restate their 2017 earnings based on new accounting rules. That could go either way. JP Morgan says the stock needs to drop another 5$ before it gets interesting, and Confluence Investment Management just dumped it's entire position......2.8 million shares.

Chart says NO. Still in down trend. RSI still above 30. MACD is close but won't cross.

Never try to buy the bottom- ain't gonna happen. Wait for an upswing. Never try to sell the top- ain't gonna happen. Set a profit level and take it as soon as it hits.

Been watching GE ever since CEO left. Haven't found reason to buy yet. News this am about spinning off companies won't help capitalization.

It's a "stay away" stock. (foe now). Played with idea of buying long and then collaring with options, but still don't like the outcome.

I was hoping you'd chime in on this. The new accounting rules, I forgot to mention that, GE is going to go up, then down, about 37 cents over that IMO. I was not aware of CIM dumping those shares. JP Morgan.... and other supposed experts.....I made good by betting against them back in 08. Less than $10 a share for GE? I truly don't think that is possible. If it ever goes that low I will mortgage the wife to buy in hard.

Exactly, that's why I'm still fence sitting but I've been burned before by my own indecisive procrastination. I thought about selling short a few months ago and thought "naw, the bottom is to close". Shoulda coulda woulda.

You can still get short by buying puts if you think there is more downside. On the other hand, if you really want more shares at a lower price you can sell puts...but you need to be sure you want more shares.

On the other hand, if you want to take some money off the table you could sell some calls against the shares you already own.

Several people have asked me (E-mail) what a put option is. It is a vechile(contract) between two people, TO COVER THE CHANCE THAT ONE PERSON STOCK GOES TO LOW FOR THEM TO STILL WANT IT. It is an insurance policy just like you have on your truck, to cover you in case the stock goes lower or if you damage your truck so it does not cost so much to fix. You select a length of time and a stock price that you will no longer want to have it. If it goes below that price you the buyer(paid someone money to buy it if it goes to low) have the OPTION of MAING THE OTHER PERSON BUY IT from you. Sorry that still is not to clear. Maybe someone else will clear it up better for me, but some of you get the idea. I am not good with words.....jk

Let's say that JK owns 100 shares of XYZ that he bought at $20/share. He is now worried that they may drop to 15$. He wants insurance.

So......I, being the nice guy I am, offer to sell him an insurance policy that says...I will buy his shares at $20 at any time between now and June 15th...regardless of the price. BUT.........for that insurance ( a PUT contract) he has to pay me 3.00 per share NOW or $300.

So June 15 rolls around and XYZ is trading at 18/share.

JK PUTS the shares to me and I pay him $20 bucks per share. He's happy. I'm happy because I actually paid an effective price of $17/share ( 20-3=17). I could sell them immediately @ 18 because that's where the market is at the moment

Financial restate won't effect cash flow, just how GE recognizes certain LT contracts. Cash flow by the way - aint been looking good as of late. Only because you asked for opinions - That said - it is GE. Pick your price point you want to buy in at and do so on a rolling quarterly basis. Adjust your decision as necessary.

Maybe a different way to state it: A PUT is a contract to sell 100 shares of a stock at a given price (the strike). If I buy a put, I can sell my shares for that strike price, anytime during the contract duration.

Since I bought a PUT, someone had to sell it. The price I paid, goes largely to them. If the price is never reached, then they keep my contract purchase price and it's a done deal.

If the stock price drops below the strike price, I can exercise my contract, and force them to buy my 100 shares at whatever that strike price was.

CALLS are different, but more easily understandable. Buying a call gives me the right (not obligation though) to buy a stock at a set price. If I think the price is going to go up, I buy a CALL and then wait until the price moves north. I can now buy 100 shares at whatever price the contract was set at.

Lastly, I don't have to hold any contract through expiration. I can buy a PUT contract, and then if the market changes, I can sell that same PUT contract, and make money on the contract transaction.

Options aren't for everyone. You really need to keep in touch with the market and with your portfolio.

Thank you both. Perfect. The person who pays the money (call or put) has the OPTION to do the transaction, the other person Has to follow through. The Call type option, in my understanding , was made to allow the small guy(you and me) to have a certain amount of upside LIMITED gain and have extra money to buy more stock in the first place. Of course that was taken over by the Hedge fund guys with programmed computers who trade in huge amounts of stock electronically. I watch option action on Friday nites but do only calls, puts and a few credit spreads I will get stuck with GE sometime but by then I will have received quite a few 25 to 50 cent premiums that my actual purchase price will be way under $10 and if that does not occur I am just that amount ahead ahead And Mr White being the nice guy he is will be super happy (money ahead)which ever way the trade goes!!!!!!

So, I'll give you 2 examples of current options trades I'm in this week:

1st stock is one that recently dropped pretty hard, but I thought was going to come back. So, I bought a 13.00 call (right to buy @ $13). The price of the options contract was $1.50. Since there are 100 stocks in a contract, my purchase price was $150 + commissions. Yesterday, the underlying stock price rose to $15.50 range.

I could have exercised the option and taken ownership of 100 shares @ $13 each, but this would have meant a big outlay in cash, and the possibility that the stock could tank again, and I lose money (Today it's trading low 14s...) Instead, I sold my call for $2.50 ($2.50 x 100= $250). My net profit on selling the contract alone, was $120 (less commissions).

2nd deal: I own a few hundred shares of another stock that has dropped hard recently. Not sure which direction is might head. I sold a calls (covered calls) for .50 ($50) at an Out of the Money Strike.

If the stock price rises and hits the strike, I could be "assigned" and have to sell my shares, BUT I will be selling at a profit (strike is well above what I paid for them) AND I've already been paid for selling my call (the right for someone else to buy them at the strike price).

Even if the price drops, I've hedged my original purchase price by selling the covered call, and if the strike is never reached, I will keep both my shares AND the covered call contract price.

I'm not a Guru but I learned a long time ago not to try and catch a falling knife.
Kodak was a solid company and a lot of money was lost on the way down.
Look at the fundamentals and be careful of buying on the past info.
Remember if on a coin flip heads came up 9 times in a row the chances of heads on the next flip is still 50/50

I worked for GE as a management accountant and financial analyst from 1962 to 1978 (except for 1.5 year break when I went to another company) mostly in their major appliance businesses. At that time GE used extremely conservative accounting methods to charge off to expense equipment and research expenditures that other companies capitalized. That accounting method reduced their reported income thereby increasing cash flow via lower tax payments. How much less conservative their accounting is now I do not know.

At that time GE had a fatal management flaw. That was they put so much pressure on divisions to reduce costs (to increase short term profits and thereby stock price) that a number of products were cheapened to almost junk quality. As a result they lost their once prominent market position, for example, in television. Their small appliance quality declined to the point that they sold it to Black & Decker. After B&D partially restored that business GE bought it back.

I do know they have and will have for many years a huge unfunded pension liability. Selling off divisions is unlikely to relieve them of any of that. I have not kept up with them to know where their other short and long term liabilities now stand. They do have some good businesses and a huge pool of patents.

I would "guestimate" that levelling of trade with China, if it actually occurs, will substantially help them. When I was there I supervised development and review of many 5 and 10 year division level profitability forecasts. I am no longer in a position to forecast the future of any of their businesses.

Wage/benefit commitment is another element in a company's future. GE labor unions that take a short term view. They rightfully lookout for their members and say: "In the long run we are all dead." Predatory practices follow. Employers too often are caught in a catch 22: Grant wage/benefits they can ill-afford or face long work stoppages. Most U.S. GE plants are unionized.