Should you buy GE stock today?

If you didn't see, GE stock plummeted on open from around $36 a share to a near 52-week low of around $31 a share.

The question: Is this a good day to put a few hundred into GE?

Seems like the perfect time to me.

This is less a question about GE than about buying low in general.

 

Then the answer is yes, you should buy low.

 

Unless you're a professional, never try to time the market. You'll rarely, if ever, find the low or sell at the high. Buy for the long term.

In terms of whether to buy GE, the company's financial fundamentals and forecast are more important than if the stock's at a 52 week low. Better to look into what the analysts are projecting for them, what their issues have been, etc. to determine if GE is a good buy at this time.

Consider American Airlines. I imagine (haven't looked) that they are probably running around a 52 week low and have dropped substantially in the past couple days. I wouldn't go anywhere near that stock right now with the price of oil and the hit their revenues and customer satisfaction took over the past few days. . Their current 52 week low could just as easily become their 52 week high a year from now.

 

What is it you're trying to get out of it? If you want to buy today at $31something and get out 18 months from now at $33something, go for it.

I owned GE stock for 5-7 years and got tired of watching it move sideways.

GE has a large financial component; those problems aren't going away anytime in the next couple of months.

 

Yeah, that's what I'm talking about.

See, I think that amateurs like us absolutely can time the market - as long as we're disciplined about it. Find a buy point for a stock and a sell point once you own it - and don't get greedy. Stick to the plan. When it gets to your sell price, you've got to hit it with no regrets.

 

Repeat after me: I will not buy the stock of any U.S. airline, I will not buy the stock of any U.S. airline, I will not buy the stock of any U.S. airline . . .

That is financial suicide.

 

I spun the financial roulette wheels when Bear Stearns failed and was trading at around $3. JPM subsequently upped its price and I more than tripled up at $11.

 

Exactly. As my father, who's been with Merrill Lynch for 40 years, likes to say: the airline industry has been a net loser of money since Orville and Wilbur Wright first got off the ground.

 

With today's meltdown, the dividend yield now clocks in at an attractive 3.8-3.9 percent. It's pretty safe to wager that won't be cut.

The down side is that GE is just too damn big to achieve robust growth anymore. Shedding their plastics unit for $10-12 billion last year was a good start, but they also need to jettison NBC and a few other operations that are too far outside their core.

If I had any loose change at the moment I'd go back in for a little bit more, but they're not my first choice -- Proctor & Gamble is a license to make money, with the stock price up a consistent 10-12 percent a year on top of a nice dividend.

 

You need two sell points. One above what you buy it at . . . and one below.

If you buy at $31 and your sell point is $36 ("don't get greedy"), what are you planning to do if it goes from $31 to $29 to $26 to $24 to $22 and then to $18?

 

Good point.

 

The other thing is, GE is a big defense contractor. If you think McCain's going to win, maybe you should buy some. If you think Obama will win, maybe you shouldn't.