bds231

Blood in the Streets: Buy and Hold GE, For Now

Ryan - Unfortunately the only risk is inflation. Given the data from the past several months, the 3.8% yield may turn out to be significantly less than inflation for the next several quarters/years.

Here's one thought I've long had about GE:

Go back to the 90s. GE was an industrial conglomerate with a touch of financials on the side, and its high-teens/low-20s PE was comparable to that of other industrials.

Today GE is a near 50-50 blend of industrials and financials (with a sprinkling of salt & pepper on the side in the form of Healthcare and NBC Universal). While other pure industrials still have PEs in the high-tees/low-20s, pure financials have PEs in the low-teens (not withstanding distortions from the chaos of the last few months).
So GE's current PE is about midway between a pure industrial PE and a pure financial PE, reflecting the blend of the company itself -- about midway between being a pure industrial and a pure financial.

Based on that very simplistic analysis, I wonder if GE's stock price will increase anytime in the near future based on multiple expansion. I also wonder if GE's stock price will continue to drop as the company further emphasizes financials and de-emphasizes industrials (and its PE continues to trend towards that of a pure financial).

I am long GE and also an employee of a GE subsidiary. Frankly, my biggest hope for my stock is that my subsidiary gets spun off.