GE and Johnson & Johnson -- just timing

The comments I received discuss longer periods of time and go back to the year 2000, so I extended the comparison. The following is a five-year comparison of performance. Here is the shocker -- over the last five years GE outperformed JNJ considerably. Yet, GE still takes all the flack?

Going back still further comparing a ten-year period tells the story more clearly. You will note that GE's performance has been rather erratic over the past ten years while JNJ has been more constant and out performed during this period. However, one should also note that if you bought into GE at its low you would have made money, and as the five-year chart portrays, you would have beat JNJ.

My conclusion is that among JNJ investors you could have bought in at almost any point. In the long run you would have done just fine, not great, but acceptable, given the turbulence in the market and the safety and security that Johnson and Johnson offers. The last three years have been flat, but so be it.

On the other hand, GE investors buying in around the year 2000 got creamed and resent it. Their patience has not been rewarded and they are steamed. Had you bought in ten years ago, you would still be up, although only a paltry amount, but still up. You would also have received a generous dividend.

The biggest disparity is one of expectations. GE investors thought they were buying the same consistency and growth in equity that JNJ provided and they did not get it. In a great many cases they are one and the same investors so they are well aware of the different paths the two stocks have taken.

Although timing is evident in the stock performance I do think GE investors have some legitimate complaints. Wall Street has been patient with CEO Jeffrey Immelt and I think GE is approaching bargain status based on my belief that this will be a positive year for the companies earnings.

If this does not prove to be true, then I expect GE's administration to be clearing out about the same time as the present residents of the White House do.