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Even The Best Stocks Waffle: Home Depot, Wal-Mart, Intel, GE

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December 8, 2006

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

Since we have looked at the web sites and stocks of NetFlix, ticker symbol: NFLX, Blockbuster, BBI, Ebay, EBAY, and Amazon, AMZN, the business history and stock of General Motors, GM, and Ford, F, along in addition to Dow Jones components Wal-Mart, WMT, General Electric, GE, and Pfizer, PFZ, it is very easy to do the same with any other company and, in particular, other components of the Dow Jones Industrial Average.

All these companies are considered large caps, that is, they are less risky than other, smaller stocks. Pfizer, for example, fell ten percent in one day on the bad news that it was halting clinical trials of what it had hoped was a promising new drug that would raise the level of good cholesterol in patient’s bodies. However, as so often happens, such bad news at a smaller company would cause an even larger drop in the stock of the smaller biotech or pharmaceutical company. Stock drops of forty percent or more in one day are not uncommon. The advantage of a large cap like Pfizer is the ups and downs, the risks and rewards are not as dramatic.

With the Dow Jones over 12,300, pretty much a record in and of itself, many of its components are comparatively high for the past 52 weeks while some are lower for the same period.

As of Monday, the four that are lower are Home Depot, Wal-Mart, Intel and General Electric.

Home Depot is in the midst of a stock options dating scandal and has problems competing with Lowe’s. Wal-Mart had disappointing November sales. Intel is facing stiff competition from Advanced Micro Devices and General Electric has endured disappointing ratings at its NBC unit amongst other things.

Mostly, though, by researching stocks and especially the Dow you find out the value of active markets and the wisdom of most of the old saws that you’ve heard and can gain investing experience and acumen.