GE: The high price of cheap stock

Local investors in GE talk about why they’ve hold on, or haven’t
General Electric pensioners talk around the lunchtable at Jonathan's Pizza & Italian Cuisine in Duanesburg in this 2013 photo.
General Electric pensioners talk around the lunchtable at Jonathan's Pizza & Italian Cuisine in Duanesburg in this 2013 photo.

SCHENECTADY — There are 8.7 billion shares of General Electric Co. shares outstanding, many held in mutual funds or by institutional investors.

But many are held by individual investors, with particularly strong concentrations in longtime company towns like Louisville, Kentucky; Cincinnati, Ohio; and Lynn, Massachusetts. 

Or Schenectady, New York.

Here are the observations of seven Capital Region GE investors who have held onto their shares — or dumped them — as the stock’s value and dividend have shriveled in recent years. 


Brad and Cathy Lewis, of Schenectady, both worked for GE, he for just a few years, she for 42. He has been a Union College professor of economics since 1979. She retired five years ago as one of GE’s senior tax managers.

Both accumulated company stock during their careers and still own it now.

“I held onto it because I thought it’s a good investment,” Cathy Lewis said. “Brad is more optimistic; I’m more worried.”

The nosedive of GE’s share price since mid-2016 is a frequent topic of discussion with her fellow retirees.

“There were so many GE employees here that it has to have an impact,” she said. “We’re just kind of shaking our heads. We don’t know what’s happened here. I don’t think any of us had any inkling.”

As for the Lewis family?

“Clearly, our net worth is less,” Cathy said. “We’re certainly not much impacted at this point. I worry more about the future.”

Fortunately, their investments are diversified beyond GE.

But there’s the rub, Cathy added: GE was a conglomerate, and therefore inherently diversified. It was a safe investment for a very long time.

“My thinking was GE itself was so diversified. We made everything from hockey pucks to turbine generators. And of course it was worldwide. So it felt like, in one company, you had sufficient diversification.”

For Brad, holding onto GE stock comes down to fundamentals: His own, and General Electric’s.

“I’m basically not a trader,” he said. “I’m much more a buy-and-hold [investor].

“I guess also, in a lot of ways, I knew they really had a lot of good people and I assume still do.”

GE has some good businesses and some really good products, he said. It also has a world-class research and development facility right next door in Niskayuna, so the company retains value, in his mind.


For the Lewis family, the stock plunge and dividend slash will be noticed but won’t be too painful, Brad said. They are diversified enough to weather GE’s problems, if they persist.

“Obviously, you always would prefer to have more rather than less, but we’ve been up and down a couple of ways over the years.”


Brian Merriam’s connection to General Electric is minimal or extensive, depending how one looks at it. The fourth-generation operator of Merriam Insurance never worked for GE, but he believes GE, more than anything else, is responsible for keeping his family’s insurance agency running for 123 years.

More of the firm’s customers have been employees of GE than any other company, he said.

“To buy their stock is just showing appreciation,” he added.

So that’s what he did, and that’s why he still holds it.

He bought stock when it was rising, then bought more at a super low price during the Great Recession and rode it back up. He estimates his investment is down about 75 percent now, from its peak valuation.

“I still see it as the right thing to do, as long as they are GE and as long they have a presence in the city,” Merriam said.

Merriam’s belief in GE goes beyond stock ownership. He was a driving force (and financial donor) in the effort to create a statue of the two early titans of GE, Thomas Edison and Charles Steinmetz, and getting it placed on Erie Boulevard near General Electric’s factory campus.


Charles Merriam, Brian’s father (and predecessor at the helm of the insurance agency), was another GE investor. He also appreciates what General Electric did for Schenectady, but he’s given up on it as an investment.

“GE did great things for the town,” he said. “GE was very, very helpful in so many ways. Nobody ever thought it would get to be where it is now.

“GE built this town. Now we’re cussing at them because they made some mistakes. We’re all paying for it.”

He added: “I was fortunate enough to get rid of most of my GE stock. People who always think GE is going to come back, they’re being fooled. It used to be you’d buy GE when it was low and be certain it was going to go up. I don’t think GE’s going to be coming back. I don’t know what’s going to bring it back.”

Charles Merriam, 94, is part of the Greatest Generation. He sailed off as a mere teenager to fight in a war, returning to raise a family and run a business and passing the reins to the next generation. Now, he fights the effects of time: He and his wife, Pat, now reside at Kingsway — he in independent living, she in the dementia unit. The combined monthly tab is north of $16,000.

“I have a terrible expense here with the nursing home,” he said. “You wonder how long it’s going to last.”


Serial entrepreneur Larry Davis, of Albany, got into GE stock as part of a strategy and a preference, considering it a local investment due to its large footprint here and a safe one because of its profile.

“I have real soft spot in my heart for the area,” he said. “I invest in a lot of companies locally and always have.

“What happened was, years ago, probably in the early 2000s, I went to a self-directed 401(k).”

GE seemed like a good counterbalance to his riskier investments in new technology, he said.

“I considered General Electric to be a completely non-risky investment. The good news is I had a pretty good tolerance for risk and had some tech stocks that did phenomenally and more than outweighed GE.”

Davis got in on the ground floor with local companies like MapInfo and CommerceHub and did very well with them. He also bought GE at $50 a share, near its peak under CEO Jack Welch, then watched it slide to $8 in the Great Recession.

“Then it went up, and now it’s back down,” Davis said. “It’s still not a horrible investment … I’m going to take a haircut on it.”

He’s going to hold on to the few thousand shares he still owns, he said.


Glenville restaurateur Pat Popolizio never worked for General Electric in his many years in the Capital Region, but he’s done business with the company and he believes strongly in it. He did sell some of his stock but is holding firmly to the rest.

“I still have a considerable amount of stock in General Electric,” he said. “I check on it every day — always looking to the positives.”

In Popolizio’s mind, GE is just too good to give up on.

“I personally take a lot of pride in General Electric because it’s brought some of the better things into the world. They’re in so many different deals that affect our lifestyles,” he said. “[The stock] just doesn’t deserve to be where it’s at.”


In June 2018, when General Electric lost its proud status as the last of the original Dow Jones Industrial Average companies, The Daily Gazette sat down in a Duanesburg pizzeria with six local GE retirees who meet once a month for lunch.

Each had his own criticisms of the company where they had worked a combined 200-plus years, and five of the six had long since shed their investments in GE stock. The one remaining stockholder was Robert Mau Sr., of Cobleskill.

“It’s because I’m stupid,” he joked at the time. He said he still believed in the workers at GE — it was the top management that put the company in crisis.

Five months later, after GE slashed the dividend on its stock to a penny and the trading price per share had plummeted from $12.76 to $7.81, The Gazette called Mau to see if he was still holding on to his stock.


“No, I’m not,” he laughed. “What do you think of that?”

He said the near-elimination of the dividend helped make up his mind, along with the opinions of his financial adviser: “a pretty sharp guy.”

“I’m not going to get rid of all of it; I’m going to keep some,” Mau said. “I’m going to downsize a little bit because, if this company goes under, I don’t want to lose everything.”

Despite his criticism, it seems he can’t quite give up on General Electric. But his glimmer of optimism will benefit the heirs who inherit his stock, not him, he said.

“That’s why I’m holding on to it,” Mau explained. “I think it will come back, in time. It’ll be after my lifetime.”

Categories: -News-, Business, Schenectady County

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