General Electric Company (GE)

There are too many companies out there with better fundamentals whose stock prices have fallen substantially farther than GE's. GE has massive debt, potentially crippling exposure to financial markets, and not nearly enough cash to insure against even a moderate financial crisis.

Much is made of the advantage GE's AAA rating gives it over other banks. However, that AAA rating is in serious danger, to say the least; it's difficult to fathom how a company with GE's balance sheet could ever warrant that kind of confidence. At any rate, it's increasingly clear that the credibility of Moody's and S&P's credit ratings is dubious at best.

GE is one financial hiccup away from having to go hat-in-hand to Congress, which would quickly consign them to the dollar-stock scrap heap along with the likes of GM and Fannie Mae. The source of such a hiccup could be macro, such as a new liquidity crisis in an asset class GE has exposure to, or micro, such as a rating downgrade. Since the latter is looking increasingly likely, a collapse of GE's financial business is a real possibility. GE seems to be trying hard to scale back that side of their business, but I have severe doubts as to whether they're in any position to get out fast enough.

If that happens, and I think it's fairly likely, then we're looking at the next big bailout story right here. Even if GE does manage to hold on, there are simply too many better places to put your money, no matter which of GE's many sectors you're trying to gain exposure in. Do yourself a favor and find a stock with a bigger upside and less risk; trust me, there are plenty out there.