The following were the three reasons for buying GE:
- A reputable activist investor has a major stake in GE. This investor has a track record of forcing major corporations into making changes. Typically the stocks he invests in run up after the changes are made.
- Perhaps under pressure from this investor, GE appointed a new CEO.
- The market has run up a lot. One of the proven strategies to generate outsized risk adjusted returns in bull markets is to find laggards that have not moved up but have a catalyst to move up.