Friday, January 23, 2009


I thought that the GE quarter was ugly and the earnings did appear to be juiced by 1.38 billion in tax benefits. Yahoo! Finance  However, I took some solace in management's expression of a current intent to maintain the dividend.  So, I went ahead an averaged down by buying 50 shares at around $12.3 a few minutes ago.  At that price, the dividend yield is about 10%.   I am using part of the proceeds from selling 100 Kraft yesterday to purchase 50 GE and I have about $2,000 to deploy from that transaction. I recognized that it will be impossible for me to call the bottom in GE.  My thinking now is that the last two buys will look good in three to five years, provided GE holds the dividend steady, and starts along a path of earnings growth by 2011 coupled with a raise in the dividend starting in 2011.  So, this kind of buy has to be given a lot of leeway, and I am not going to use a stop loss on it.  I am reinvesting the dividends also.  I basically took to heart the lecture that I gave myself this morning about a buy of Schlumberger now provided you had strong hands, a long term perspective and a willingness to withstand more potential unfavorable news.   The price of GE stock this morning was at January 1996 levels. 


  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. 

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