General Electric? I would love to get some feedback on this. I am a bull on this one but here alot from both sides. Is GE here to stay or should we all just go away?
GE at these levels is a great buy to build a position and truly "forget about it" for 5-15 years. IMHO the r/R has far more upside than downside over that timeframe. If you buy GE at these levels you have to look at it from a LONG TERM perspective..... because if you get caught up in the quarter-to-quarter, week-to-week noise and gyrations of the current market, you'll go crazy. GE Capital aside, I like their global footprint and diversity of business units. To that end, I've been averaging into a nice position via shares and short puts since December. I don't plan to dump them anytime soon.
GE is a representation of the American economy. If you believe that there is going to be a deflationary or stagflationary depression, then forget about it. If you believe that there will be a V-shaped recovery with 1% inflation and Americans go back to living in Disneyworld again then you should buy GE for the long-term. As long as the Government continues to bailout the financials GE is not a bad trade. GE Capital is a beast within itself, caveat emptor. On the otherhand if there is a high inflationary environment soon and GE's debts are wiped out, then if the management is able to restructure properly (unlikely given their profiles and backgrounds) then GE becomes totally dependent on the actions of a few executives for survival, it becomes a gamble.