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Financial Positions in the Market....
Old 10-02-2008, 07:13 AM   #1
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Financial Positions in the Market....

There are two positions to adopt in this market

CASH and FETAL
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Old 10-02-2008, 07:20 AM   #2
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I change nothing. Automatic contributions to 401k and taxable account in the same amount as before and will max out roth 1st business day of the new year as always. I'm 15+ years from FIRE if I where <5 maybe that'd be different.
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Old 10-02-2008, 07:22 AM   #3
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Nah, this too will pass. When financial ruin is finally averted, we can look forward to about half of the drop to disappear in about a month. During that time, we will be blasted continuously by CNBC that this is a "dead cat bounce" and/or a "sucker's rally." Of course, before the turnaround we may have several of these anyway.
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Old 10-02-2008, 08:09 AM   #4
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The only actions I am taking are making sure my short term funds for living expenses are "insured" and adequately spread around so I don't have to worry about interruptions in my cash flow.

Audrey
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Old 10-02-2008, 08:10 AM   #5
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I change nothing. Automatic contributions to 401k and taxable account in the same amount as before and will max out roth 1st business day of the new year as always. I'm 15+ years from FIRE if I where <5 maybe that'd be different.
I have a friend that works at Wachovia - seems like 15 years of deposits into a 401k went from whatever a share to $.25 a share last Monday.
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Old 10-02-2008, 08:31 AM   #6
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I have a friend that works at Wachovia - seems like 15 years of deposits into a 401k went from whatever a share to $.25 a share last Monday.
Well then it's a good thing I don't have any individual stocks in my 401K except my company stock which I limit to no more than 5% of my total portfolio.
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Old 10-02-2008, 08:41 AM   #7
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I have a friend that works at Wachovia - seems like 15 years of deposits into a 401k went from whatever a share to $.25 a share last Monday.
Hopefully that wasn't 50% or more of his total 401K...........
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Old 10-02-2008, 10:09 AM   #8
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Not really sure what % it was but he was not a happy camper. Felt he was lied to by upper management (yes, what else is new). He and his family will be fine he just feels betrayed by the system.
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Old 10-02-2008, 10:16 AM   #9
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There are two positions to adopt in this market

CASH and FETAL
third position: buying like a madman!

If I'm wrong and I lose it all, well I didn't need it in the first place
If I'm right and things come back, then I'll get to look back and be proud

Neither matters because we're going to be a fascist state shortly and I'm fresh out of brown shirts.... but it'll be fun while it lasts!
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Old 10-02-2008, 10:23 AM   #10
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He and his family will be fine he just feels betrayed by the system.
Lack of diversification is what betrayed him.

You never, ever, ever hold a bunch of stock in the company you're working for, no matter how much you like the company or how good it is.

The latter is part of the problem. You start thinking you know enough about the company and how it works to predict when things might go bad. You dont.

Then when the company noses into the ground, you've got job problems AND investment losses.

Stupid.
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Old 10-02-2008, 10:27 AM   #11
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You start thinking you know enough about the company and how it works to predict when things might go bad. You dont.
In my case, once I see enough of the company, I'm so amazed by it's ability to make money in spite of itself that I wonder how on earth they manage to stay in business. Then I realize that all mega companies are just as bad and I cry myself to sleep.
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Old 10-02-2008, 10:30 AM   #12
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Mmm hmmm. I used to say that pretty much everyone except the engineering and manufacturing guys could have stayed home for 3-4 years at a pop and almost nobody outside the company would have known the difference.
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Old 10-02-2008, 10:34 AM   #13
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Mmm hmmm. I used to say that pretty much everyone except the engineering and manufacturing guys could have stayed home for 3-4 years at a pop and almost nobody outside the company would have known the difference.
Yes and we manufacturing and engineering types would really appreciate it!
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Old 10-02-2008, 10:40 AM   #14
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third position: buying like a madman!

If I'm wrong and I lose it all, well I didn't need it in the first place
If I'm right and things come back, then I'll get to look back and be proud

Neither matters because we're going to be a fascist state shortly and I'm fresh out of brown shirts.... but it'll be fun while it lasts!
3. sounds like the correct call.....do really think that both parties are going to allow for the markets to go down much further so close to election.
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Old 10-02-2008, 10:47 AM   #15
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Mmm hmmm. I used to say that pretty much everyone except the engineering and manufacturing guys could have stayed home for 3-4 years at a pop and almost nobody outside the company would have known the difference.
Yeah, no company needs sales or accounting people, they are expendable.......

I remember a very wealthy man telling me in my youth: Once the sales people are fired, and accounting is down to a skeleton crew, someone's out buying locks on their lunch hour.........for use at the end of the day.
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Old 10-02-2008, 10:51 AM   #16
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3. sounds like the correct call.....do really think that both parties are going to allow for the markets to go down much further so close to election.
Yes, it's part of power consolidation and the elimination of the middle class.. all leading up to the emergence of fascism in the US.
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Old 10-02-2008, 10:54 AM   #17
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Mmm hmmm. I used to say that pretty much everyone except the engineering and manufacturing guys could have stayed home for 3-4 years at a pop and almost nobody outside the company would have known the difference.
Every once in a while, you and I find some common ground. This is one of those times!
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Old 10-02-2008, 10:56 AM   #18
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3. sounds like the correct call.....do really think that both parties are going to allow for the markets to go down much further so close to election.
Yes, I do. They're too busy blaming each other to do anything constructive.
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Old 10-02-2008, 11:00 AM   #19
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Yeah, no company needs sales or accounting people, they are expendable.......

I remember a very wealthy man telling me in my youth: Once the sales people are fired, and accounting is down to a skeleton crew, someone's out buying locks on their lunch hour.........for use at the end of the day.
Makes you feel all warm and fuzzy doesn't it?

--Rita
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Old 10-02-2008, 11:22 AM   #20
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Lack of diversification is what betrayed him.

You never, ever, ever hold a bunch of stock in the company you're working for, no matter how much you like the company or how good it is.

The latter is part of the problem. You start thinking you know enough about the company and how it works to predict when things might go bad. You dont.

Then when the company noses into the ground, you've got job problems AND investment losses.

Stupid.
My SIL's husband works for Laclede Gas and they recently got some info on the moving of their 401K plan to a new custodian (Fidelity). She asked me about a recommendation on what to do with transferred $ and new contributions. I recommended a VG Target Retirement fund since they're pretty unsophisticated re: investing. In that conversation she mentioned company stock and how they've made so much on it.

Without having any knowledge about the co. or stock, I gave her the basic recommendation to diversify out of it, with a max of about 5-10% of their total portfolio invested there. Pointed out the danger of too much invested in one company (job and stock) using the Enron example to illustrate.

We didn't get into it deeply and she didn't tell me how much they had in the co. stock (so I didn't ask). I'm not that close to them and so I didn't push it.

Later I looked it up and LG has been performing unbelievably this year. It's up 56% YTD, 65% over the last year. 10 yr average annual return is about 13%.

Laclede Group Inc (LG) - Stock chart, Index chart - MSN Money

That's outstanding compared to the overall mkt. I assume it's a real flight to safety, defensive stock story over the last year, and especially YTD. But it's really outperformed even other utility stocks, as far as I can tell. But I would assume that it's got to underperform once things turn around, but who knows?

I don't know if they've done anything about it, but I seriously doubt it. I'm sure they've seen the latest results and compared that to all the market news and figured, "no way we're getting out." And who could blame them?

I'm certainly not going to push it with them. God forbid I convince them to diversify some of their position into the broader market and then watch it go down another 10-15% and then go sideways for quite a while, which is a real possible (maybe even likely) scenario.

I'm sure it's probably a safe play for them and nothing's going to go wrong with the company, but who knows? Especially these days.

Damn thing just keeps going up! (And yes, I am a bit jealous! )
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