Make This Trade For a 20% Drop in General Electric

Share on Facebook
Share on Google+
Share on LinkedIn



It’s pretty safe to say that every investor has heard of General Electric (NYSE: GE). For many years, it was the largest public company in the world with upper management nearly akin to rock stars.

During the company’s amazing run atop the world’s greatest companies, GE was known for innovation and stellar management. Heck, the company was even co-founded by Thomas Edison! While the sprawling conglomerate has many business units, it’s primarily focused on jet engines, power plants, and medical equipment.

But these days, the company isn’t even in the top 100 in terms of market cap (although it’s still valued at $71 billion). And the stock is down 55% so far in 2018.

What’s interesting is the company hasn’t actually lost much, if any ground, in its core areas. The issue is the rest of the world has caught up to GE. The company is no longer considered an innovator, a title which these days is used to label companies like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN).

Furthermore, huge conglomerates are no longer en vogue – at the least the kind that bring together a collection of disparate companies. Just this past week, another huge manufacturing conglomerate United Technologies (NYSE: UTX) announced it would be dividing up into three separate public companies. This may also be the future for GE.