Describing his personal decent into bankruptcy, Ernest Hemingway said it happened “gradually and then suddenly.” The fall of American icon General Electric could be described in the same way.

Last year, while the Dow Jones Industrials gained 25 percent, GE stock suddenly lost 40 percent. Specifically (and painfully for stockholders like me), after starting 2017 at over $30 per share, GE ended the year at $17.45. YIikes!

And, so far, 2018 has been more of the same. Early in April, GE stock was trading at around $13! An epic, almost Verso-like crash for a venerable blue-chip stock. So what happened?

The short answer is a company, that for over 100 years was really good at making things, like light bulbs, refrigerators and jet engines, saw greener grass on the other side of the fence and decided to expand into the financial services sector. GE's legacy white goods (kitchen appliances) financing segment, GE Capital, morphed into a mega-bank selling insurance, mortgages and credits cards.

For a while this new venture made money. Then came the subprime bank crash of 2008. GE Capital was hit very hard, putting the entire company at risk. Deemed “too big to fail,” we, the taxpayers, stepped in and saved parent GE by lending them over $130 billion.

That worked for a while, but gradually, with the loss of revenues from “bankrupt” GE Capital, expenses that were once affordable became a big problem. For example, GE’s generous “defined benefit” pension plan is now underfunded by about $31 billion. (A defined benefit plan means, when you retire, you get paid a defined amount for the rest of your life.)

Then, GE made a big bet on $5-a-gallon oil prices by investing in the competition — coal and natural gas technologies. The oil price spike was short-lived. They lost the bet. With 20/20 hindsight, GE’s coal and gas investments look pretty dumb.

In 2016, desperate to raise cash, GE sold its legacy kitchen appliance division to Haier. Haier is a Chinese company. Today, the only part of a “General Electric” brand kitchen appliance that is GE is the name tag, which Haier also bought!

Suddenly, in 2017, 10 years of bad decisions came home to roost and GE stock owners were left holding the bag.

So what’s the future for GE? The devil is in the details. When you own stock in a company, you receive a copy of its annual report. These glossy publications provide both rosy “forward looking” statements and audited financials of past performance.

Based on GE’s 2017 annual report, GE’s Power, Aviation, Transportation and Health Care segments did pretty well. But their Renewable Energy, Oil & Gas and Lighting segments struggled. And GE Capital remained a giant sucking sound, to the tune of over $6 billion in losses.

To put that loss in perspective, Maine’s biannual budget is about $6 billion. Bottom line: If you had invested $100 in GE in 2012, today that investment would be worth $98. Bad for sure, but a similar investment in Verso is worth zero.

So what’s an investor to do? The good news is that longtime CEO Jeff Immelt has finally been ousted in favor of John Flannery. It sounds like Flannery is on the right track. He is pushing a long-overdue housecleaning.

But GE needs cash. Their dividend, the main reason many folks buy a blue-chip stock, has already been cut in half. At $0.48 a share, one can argue that’s still a yield of over 3 percent. But the reduced dividend puts far less cash in your pocket. And rumors are, GE may need to borrow money to cover the 48 cents.

Flannery’s annual message to stockholders closes with: “There will be a GE in the future, but it will look different from how it does today.” It better. The challenge for this giant “lumbering and opaque” company will be instituting the needed changes.

Despite all of the above bashing, I think it may be a good time to buy GE. Trump’s tax cuts and China tariffs will help. The consensus target price for GE stock on Dec. 31, 2018, is $16. That would be up almost 20 percent from where the stock is trading today. I will risk $5,000. We shall see.

This month’s 'Did you know'

“Gradually and then suddenly” also perfectly describes how our lakes and ponds normally shed their winter coats. Gradually, over several weeks, more and more open water appears along the shoreline. At the same time, the white ice of winter turns ever darker gray. And then, often suddenly, the ice is gone.

Based on the information I have, the earliest ice out for Swan Lake was back in 1953. That year, the ice cleared on March 27. The lake’s latest ice out was recorded just 14 years earlier, on May 7, 1939.

Even with the onset of global warming, ice out 2018 on Swan Lake will be several weeks later than back in 1953 — bitter icing on the cake of what has been a long, cold winter.

Despite a rather bizarre story in our local daily newspaper, there are no ice fishermen I know of that are concerned the hard water fishing season is growing shorter. In fact, in 2001, Swan Lake was not declared ice free until May 4. That is the second-latest ice out date on my list and within three days of the all-time record.

Then, the very next year, in 2002, the ice cleared on March 31, within three days of the earliest recorded ice out. What does all this annual variation mean?

As an engineer trained in the scientific method, I have spent a great deal of time sitting by the wood stove analyzing and pondering the historical ice out data. My conclusion: Some winters are colder than others. Unless of course the ice goes out early; then it is caused by global warming.

Randall Poulton lives in Winterport. He writes a monthly column for The Republican Journal.