{"id":480,"date":"2008-04-11T10:50:16","date_gmt":"2008-04-11T14:50:16","guid":{"rendered":"\/blog\/?p=480"},"modified":"2012-10-31T11:43:01","modified_gmt":"2012-10-31T16:43:01","slug":"ge","status":"publish","type":"post","link":"https:\/\/www.holypotato.net\/?p=480","title":{"rendered":"GE"},"content":{"rendered":"

“It’s a good patient money buy. It’s a great company that isn’t going anywhere. If I was setting up a portfolio for a widow, GE would be at the top of my list of picks… but I think it might be too conservative for you.”<\/p><\/blockquote>\n

This was the gist of what my dad had to say when I called him this morning to talk about GE, which just reported some disappointing first-quarter results. I’ve been keeping an eye on GE for a while, figuring that I would buy in around $32 (of course, the few days when it was that low the market was hiccuping so bad I was scared away, even though I shouldn’t have let fear affect my buying), which is where I decided that there was very little downside. At the moment, GE has gone down over 10% on the earnings news to trade at just a hair below $33 (US), which is close enough that I’m seriously thinking about it again. <\/p>\n

For one thing, it neatly patches a hole in my diversification. Since I am young* and open to taking risks, a lot of my non-index portfolio is in some risky stocks (such as Q, QSR.UN, and banks — which shouldn’t be this risky!) in hopes of getting higher returns. But I’m still not willing to suffer too much of my portfolio in high-risk things, so I also have some safer stuff (FCE.UN, YLO.UN), but my portfolio is nonetheless really poorly diversified as I mentioned in a previous post about index funds. There looks to be a place at the table for GE, though perhaps my biggest argument against that is that any patient money I could put in GE I could equally put into an index such as the DJIA. Of course, some that patient money is sitting in my high-interest savings account at the moment making a lousy 3.35% (why does that slide down more every week I check it PCF?!), while GE is offering a famously stable dividend of 3.8%. I also think that it might outperform the index for a while. <\/p>\n

There are two reasons I might think that. The first is that it might be oversold today after this report. There are some worrying signs in it: GE missed forecasts, and more importantly, profit was down while revenue was up, so something troubling happened to their profit margins\/efficiency there. However, a part of the let-down was certainly related to the financial sector\/credit markets lately, and I think that’s going to be a temporary issue, offering them a big chance to rebound (note that when discussing my patient money, temporary could be up to 2 years). GE, being a massive conglomerate with its fingers in just about all the pies, also has a wind turbine and nuclear generator division, which I think could be big winners in the decades to come. Of course, being a massive conglomerate it’s hard to say if those winners will be enough to raise this massive company to outperform the indexes, but my hopes are high.<\/p>\n

* – or so I continue to believe, in spite of grey hairs and bald spots. <\/p>\n

Update: I haven’t even posted this yet, but GE dipped more into the $32.50 range, so I bought some at $32.53. The exchange rate fee (2%, ouch!) makes me think I may have been better off with that index fund after all.<\/p>\n","protected":false},"excerpt":{"rendered":"

“It’s a good patient money buy. It’s a great company that isn’t going anywhere. If I was setting up a portfolio for a widow, GE would be at the top of my list of picks… but I think it might be too conservative for you.” This was the gist of what my dad had to […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"_links":{"self":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/480"}],"collection":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=480"}],"version-history":[{"count":0,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=\/wp\/v2\/posts\/480\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=480"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=480"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.holypotato.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=480"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}