Financial Positions in the Market....

[nun]

There are two positions to adopt in this market

CASH and FETAL

 

[aaronc879]

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.

 

[2B]

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.

 

[audreyh1]

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

 

[OAG]

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.

 

[aaronc879]

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.

 

[FinanceDude]

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...........

 

[OAG]

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.

 

[Marquette]

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!

 

[cute fuzzy bunny]

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.

 

[Marquette]

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.

 

[cute fuzzy bunny]

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.

 

[2B]

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!

 

[maddythebeagle]

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.

 

[FinanceDude]

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.

 

[Marquette]

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.

 

[youbet]

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!

 

[youbet]

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.

 

[Gotadimple]

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

 

[Gardnr]

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! )

 

[FinanceDude]

Makes you feel all warm and fuzzy doesn't it?

--Rita

What was real funny was that CFB said it, a retired sales guy.........

 

[Gotadimple]

What was real funny was that CFB said it, a retired sales guy.........

Well us sales-types tend to stick together. I'm a former director of sales operations.

-- Rita

 

[cute fuzzy bunny]

Well, my old company did work in a rather unique manner. The manufacturing guys were the kings and (cough) the engineering folks were the queens.

Once in a while the engineering guys would drop by marketing and ask us our opinion on something, and then do whatever they felt like.

The product wasnt particularly in need of sales. Our sales crew pretty much told the distributors how many they could have, when they could have them and how much they'd be paying for them.

Our IT folks were fine, but most of the business units did their own things and hid them.

Accounting? Our manufacturing plants could each tell you how much they spent down to the penny, when where every penny went. The money rolled in. Subtract one from the other.

 

[Marquette]

What was real funny was that CFB said it, a retired sales guy.........

Well, their slogan wasn't "Can I talk you into putting Intel inside?"

 

[cute fuzzy bunny]

LOL.

No, it wasnt. Virtual monopolies are pretty good things.

About the only truly worthwhile things the marketing folks did was a) make people aware of the fact that there was a cpu in their computer and care at least a little about who made it, and b) occasionally make some of the writers and analysts a little bit concerned about telling people it was okay to buy the lowest end product because it was 'good enough'.