GE kicked out of DJIA?

is it true?? I remember a member here looking into buying some a little while back

?

Yes.

Osky

http://money.cnn.com/2018/06/19/investing/ge-dow-jones-walgreens/index.html

Yep, I'm him and I'm buying in hard now. I'll let y'all know how that works out for me.

I hope that works out for you. I think there is more downside to come .

GE has been in the DJIA continuously since 1907. Sort of indicative of how our economy has changed over the years. It is also a good lesson in why crony-capitalism never works out in the long run.

They sold their appliance Dept to the swedish Electrolux a couple years ago

Isn't the dow pretty much useless anyway? I've always heard it's a horrible economic indicator.

Sure. The S&P 500 is a much better proxy for the "market". The Dow is only 30 stocks.

They claim the dividend is safe.
I sold my shares(only a couple hundred) about a year ago. I am giving serious consideration to buying back in soon.
I was warned to stay away from Ford when it dropped to 2.28, but I ended up selling my shares @ $15 -19 a few years later.

I've heard it's also based off individual stock price and not total company net worth, which seems idiotic.

That's true. It is weighted by price rather than total market capitalization.

I haven't run the numbers because the company is not interesting to me but I have a hard time accepting that the dividend is safe when the company is continuously losing money. They need to sell some non-performing assets and pay down debt...IMO. Besides.......what good is the divvy if the stock price keeps depreciating ?

Many times when firms are dropped from the Dow their share holders benefit from upward valuation. This may not be true for GE as they are a struggling in the service oriented economy we are in today. Many major manufacturing firms have been dropped over the years for firms such as Apple etc. so this is mostly a continuation of what has been taking place since the early 1980s. I also agree that S & P for me is a better gauge for market trends etc.

Bryce

wait a second, are you saying that investing $12.50 to get a 30 cent dividend isn't a good strategy?

LOL ! Not in my book !

I thought GE paid 12 cents.

I might buy a bit at 4% yield.

12 cents per share, per quarter. 48 cents annually. 3.73% at today's share price

I am hearing the lighting division will be sold by years end???? Power is down. They just sold transportation. Of course you can still get appliances with GE brand on them. They also will still have their hands in on transport. Read dividend may be cut some more.

I don’t think they have cut their dividend yet during this long sell off. If when they cut it I would expect a knee jerk sell off and then some buying as folks would think a bottom is in. The company has many great assets just poor management under country club Jeff Immelt. What a eulogy for his accomplishments, GE once had the largest market cap in the US I believe I heard.
I think if one strategically bought it on a dollar cost average for a few years you would be well positioned when the turn around came.
$300/month for 36 months equals $10,800- if (big word) GE board grows some kahunas and turns this around one would be well positioned for a nice profit if (big word) stock moved back to low $20. Not a big reach for the stock price. IMO.

That might make some sense WHSKR. Still, that's a lot to ask of a company that is currently losing 96 cents per share every year. Another way to go about building a position ( if you wanted one) would be to sell puts on the stock. You might end up with shares AND you'll be paid for the risk in the meantime.

But to me, there are much better opportunities out there that are already moving in the right direction and generating a decent return.

The future of GE and markets is an unknown and those shares you are buying COULD pay big time but who knows. Markets are all a gamble but the one thing to that is important is to buy and hold and don't look back remember you have to be in for the LONG haul.

Clear up the put sell is that where you have the right to buy or sell at a higher price?
Do you have to have a stake in the security to sell the put?

I see you have the obligation to buy at a lower price and keep the premium by selling the put. You would only lose your cost of the option if the stock price rises?
As long as your comfortable owning the stock at a lower price sounds good collecting $ on something your selling without owning it.

If I am the put seller....I have the obligation to buy your shares at price X regardless of the stock price. Yes,, I keep the premium regardless. So If I sold you a put contract that expires december 21st, 2018, with a strike price of 12.00.............you would pay me $72 today.

So if the price of GE shares was 12.00 or lower you could exercise your contract and I pay you 12$ a share. My EFFECTIVE price would be $11.28 per share because I have already collected .72 per share from you when you bought the contract.

If the stock price rises...I still keep the premium and the contract expires worthless on December 21, 2018. At that point I could sell another contract if I chose to.

You are essentially buying insurance from me.


No. I do NOT have a stake or a position in the security in order to sell the put. I MAY be trying to establish a position by selling the put. I would be willing to buy shares but only at a lower price than they are currently trading. On the other hand, I may just be looking for a way to make some income by selling puts that I believe will expire worthless at expiration....due to stock price being above the strike price of the contract.

Gotcha, have you looked at the option chain on GE?

Yes. The 72 that I used above, was current mid spread at that moment

I worked almost 15 years as a low level financial manager at GE, left in 1978. Even then the company had a fatal flaw. They were so obsessed with year-to-year and quarter-to-quarter earnings ratios that they repeatedly lowered product quality, cut R&D expenditures, and did just about anything because of their ingrained short-range-itis.

Nothing like a good long term strategy. This knee jerk 90 day reportingearnings and revenue and outlooks just don’t lend to a good long term well executed plan.

Business plans are one thing. Executing them is another. I supervised the compiling, reworking, and analyzing of annual and 5 year business plans at the profit center level every year. But whenever push came to shove the Schenectady and NYC gurus wore blinders. All they could see was short terms ratios. Their ever present question was "What immediate effect will it have on price of the stock options we get as incentive compensation?"

Incentive compensation together with managerial promotions for turning businesses around (read 'milking profits') was GE's downfall.