Upside vs downside in owning GE stock after a steep decline

Posted By on November 15, 2017

I occasionally receive emails or comments from friends and acquaintances who know I watch financial markets asking me to share my thoughts on investing. They really want stock "recommendations," but almost always refuse to give advice when it comes to picking and choosing individual companies. For the record, there is always financial risk and the safer route is buying a low cost ETF to spread the risk. That said, I can’t resist talking about one of if on the behemoth industrial conglomerates that a majority of investors have own over the past 100 years (as a individual stock or in a fund).


General Electric’s stock collapse this week after new CEO John Flannery outlined a restructuring plan was painful for those who hold this widely held company. Not only did his future plan include shedding smaller divisions like transportation and lighting, but also slashed the dividend by half (a big deal for most who hold GE stock). Sell orders quickly piled in on Monday and continued Tuesday … hammering the value of shares by a double-digit percentage drop.

GECoreNonCore171113

Being an in and out owner of GE over the years, I was tempted in to buying after seeing this bellwether company slump; I broke my self-imposed 3-day rule for buying and selling "on news" and purchase on the first day (mistake) and second day of the decline (still a mistake).  Hopefully in the long term this impulse buy is one I will not regret?

*** Giving the free TradingView.com chart embed a try for the GE stock above ***

Comments

Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.