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Is GE a Bargain?

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By gapfan
November 30, 2006

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In following the discussion about the dividend in the previous thread, I thought I might share my experience. When I joined GE in 1955 as a CheMet trainee, they had a program where if I invested in U.S. saving bonds ($10 a week) they would give me a "bonus" in GE stock. I think it was 10% or so and when I had to leave three years later I had accumulated 3 shares when vesting was complete. Dividends were reinvested into more stock.

The importance of this "savings" program was it taught me a new way of saving, as I had no experience in stock investing. It got me interested and in 1961 my first purchase through a broker was 5 shares of GE at $69 a share.

The point of this post is that as a result of my GE experience, I got my best buy in a stock by purchasing Gap, Inc. (GPS) in 1980, and currently am up 44,300% on that stock not counting dividends. The current dividends on that stock are about 400% of the purchase price each quarter. I sold some along the way but held much of the original purchase. Of course, one original share split enough times to become 162 current shares. My cost basis = $0.045 per share

As I now invest as an older person, I am happily a holder of GE again. My purchases in 2002 around $27 and again at $23.30 on 10/7/02 have good gains, and a recent purchase in July at $32.25 was good in my opinion. I am currently up 31% on my total not including dividends.

If someone is "learning" about stocks, I think GE is a good candidate. But don't stop there, learn through trial and error, but remain conservative in your investing. As a previous poster indicated, had I held my stock from 1955, it would have grown by more than just the dividends, and compared to "saving" money in other ways, I have done much better by investing in stocks. My SS of about $900 a month pales in comparison to my investment income, even after some 33 years of work. If recommending one stock, GE would be my favorite.

Gapfan (where did I get that name?)


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