GE Crashes: OUCH

So much for the almighty GE. We just talked this week what a good company GE has been and how it was priced relatively attractive. After all, GE is a global infrastructure play, with its jet engine, locomotive, electric power (including solar) and water businesses. But we always new that GE was also loaded with financial assets and had to be exposed to some of the problems of the banks. And the appliance business HAS to be hurting with home sales through the floor.

GE's miss should have been no surprise to anyone, but apparently it was. It is just unacceptable to the market for GE to miss on earnings. This is how earnings season will go (and why volatility will stay relatively high for a while longer). There will be some bad announcements this month with results that were not anticipated. But no one should be surprised if any company with consumer durable or financial industry exposure had problems with earnings in Q1. So, once the shock has worn off, the stock market will be fine. All of this bad news really IS already in the price.

So, I just put my money where my mouth is. I sold 3 GE April 33 Puts for 0.75 with the price right now at 32.75. If I end up with the 300 shares, by cost will be 32.25 with a 4% plus yield. I am fine owning GE at that price.