I really can't believe first that this stock is not getting any significant play about its rapidly growing infrastructure business or its investments in water and solar and wind energy. The focus is all on the financial side of the business. Well, the financials may be a big chunk (~50% I think) of the business but the future is in the other investments I believe while the financial side gives the rest of the business leverage to borrow cheaply to expand.
The BRIC countries are all growing and require major infrastructure investment. The "western" world's infrastructure is decaying with insignificant investment over the last 25 years so more money needs to go to this area.
As for alternate energy - what signal does the market need to see that the future of oil will be less in the future than it is now. Regardless of whether oil stays this expensive, the tipping point has been reached and consumers/companies and governments will all start looking for alternatives. In addition to this, the world is worried about carbon producing energies, another reason for these industries to grow substantially. They don't need to be the perfect solution, they just need to be better than current alternatives.
Water, water everywhere, and not a drop to drink - soluable water usage increasing, supply decreasing - that's without the unknown effects of climate change. Water will be the new oil, in my opinion. In fact, I boldly predict that we have seen nothing yet in terms of the lengths peoples and their armies will go to acquire access to clean water. Already american municipalities are increasing water rates at double and tripple inflation rates to slowly get the consumer ready for the rates that will be charged in the future. Although admitedly they are starting from a relatively cheap base, those increases will in coming years rapidly surprise us all.
GE is well positioned to take advantage of many of these upcoming trends.
Oh, it pays a good dividend as well that has no danger of being cut.
Risk/reward looks very attractive to me.
I would sure welcome some counter arguments. I don't like losing money!
$28.0 (07/20/08)
