General Electric And Pandora's Box


  • GE's ongoing troubles remind me of the myth of Pandora's Box.
  • The January 16 "Insurance Update" convinced me that GE is no longer a dividend growth opportunity.
  • I closed my GE position and redeployed those funds into more shares of 3 dividend stocks in the portfolio.

That was then...

I've written 3 articles about General Electric (NYSE:GE). The first was a June 2017 article which asked if GE was in a position to succeed. If I had known then what I now know, I would have said, "Possibly, but it will be a tough hill to climb."

My October 2017 article, "Clarity About The GE Dividend," was an attempt to inject some humor into a difficult topic (the 50% dividend cut), and my bottom line was the I now viewed GE as "cash available for deployment." Several of my friends said I should have turned it into cash then. They were right. As other opportunities arose, I asked myself, "Would I rather spend cash to buy this stock or would I rather sell some GE to buy this stock?" I sold 20% of my GE shares in mid-November at $18.28 and used that money to add more units of Magellan Midstream Partners (MMP) at $65.00.

A November 2017 article reviewed the November 13 Investor Update. I was more critical of GE (perhaps "sober" is a better word). The seriousness of the situation was obvious, but I like the approach new CEO John Flannery is taking. I'm positive about the new CEO, Jamie Miller.

After that article, I sold 25% of my remaining GE shares at $18.41, and used the proceeds to add more shares of National Retail Properties (NNN) at $41.80.

...This is now.

General Electric CEO John Flannery and CFO Jamie Miller again appeared before investors and analysts on January 16 for an "Insurance Update." Here's the first paragraph from the press release:

"BOSTON – January 16, 2018 – GE (NYSE: GE) announced today that the comprehensive review and reserve testing for GE Capital’s run-off insurance portfolio, North American Life & Health (NALH), will result in an after-tax GAAP charge

This article was written by

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Join MarketWatch Award Winner Kirk Spano For More Profits & Less Risk.
I am a retired dividend investor focused on total shareholder return through a diversified equity portfolio that is designed around quality, growth and relative safety.


Disclosure: I am/we are long JNJ, MRK, PFE, WMT, XOM, MSFT, PG, CSCO, AAPL, TD, MMM, PEP, ADP, RY, SPG, VTR, BCE, BEP, DUK, KMB, O, EPD, D, SKT, MMP, PPL, TGT, NNN, BIP, WPC, GPC, APLE, HASI, IBM, PEGI, KO, TXN, VFC, MRCC, HRL, VTI, VEA, VWO, VYM, VOE, VNQ, VPU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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