Early Club Decisions

We had some constructive email discussion about GE, LuLu, and US banks so I thought I'd blog it for the record and further discussion. I think we all agreed GE would be a good first purchase, before Eddie wrote:
Seems I haven't done my due diligence on GE. I looked on their 10K and it seems a significant portion (1/3) of their revenue and profits come from GECS, yup GE capital.
Are they immune to the credit crunch?http://www.reuters.com/article/ousiv/idUSN1336416420070913?pageNumber=2

Arash said:
Well then isn't it just like investing 1/3 of our money in a US financial institution? That means that GE's stock too is affected by the credit crunch. It can be a good investment because of the same reason that we want to invest in US financials.
On a separate note, if I want to choose one from LuLu and US financials, I would vote for financials.

Des said:
GE's stock price has held up fairly well during this credit crunch. It is true a large chunk of their profit in recent years has been from financing. As the article from reuters suggested that non-traditional lenders like GE may have advantages over banks during times of tightening credit. It's hard to know what crazy loans might be on the books of GE Capital. GE really is a conglomerate and can't be classified as a financial but also can't be classified as an industrial either. I guess if we want financial exposure (which I'm quite negative about) then I would go with GE.

Between LLL and GE, I would actually pick LLL at this point. Sentiment recently has been down on this growth stock and if this is the growth stock of the next decade then I want some skin in the game! The game plan here would be to hold LLL for at least 1-2 years as it rolls out its new stores I presume?

In terms of UNG or FXY, these plays require lots of watching and a finger on the sell button so maybe not as appropriate for the club as an initial investment anyways.