Bought GE
After doing some extensive research, I broke down and started buying up shares of General Electric (GE: web, chart, Y!) in my retirement account last week. After several trades, I’m averaged in at $26.77 and will continue to evaluate the value movement for the next several months.
Last Friday, the company reported earnings in-line with market estimates, which in this market environment is reassuring. Jeffrey Immelt also reported that the company is selling off its Japanese consumer finance unit to Shinsei Bank, a midsize Japanese bank for $5.4 billion, including $1.7 billion mortgage and credit card assets. GE, however, still gets stuck with a $233.0 million charge for the sale after taxes.
Of course, everyone wants to beat estimates, but when the overall trend is down, just meeting expectations can be a sign of strength, if not resilience.
I’m fairly content with the position GE is in right now. They’re very diverse, so no one sector is really going to back the company into a corner. I’m pleased to see they’re selling off mortgage and credit card assets, as I feel these sectors will feel some pain for quite some time.
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After your last post on this they annouced the selling of the financials sector and appliances, the two worst performers. I am surprised you are in already, but it isn’t a bad move.
They will be strong now in several key areas. Energy, they are the top or one of the top players in everything from coal to nuclear to wind to solar and perform well in each. Also, they are the biggest player in the states in locomotion, which profits will increase due to gas prices, and have a joint venture accounced with people like Th!nk, who make electric cars.