Crap Throwing Monkey Posted May 26, 2006 Posted May 26, 2006 Caveat - Managing money is easy. Managing investments is hard. 698379[/snapback] Find companies with low long-term debt, enough liquidity to pay their current debts, reasonable margins, and steadily increasing revenue. (E.g. Google, Nucor Steel, Borders Group, Industrial Services of America) Make sure their stock price isn't outlandishly high with respect to revenue and earnings. (E.g. not Google). Buy the rest. Diversify to ensure that, if one company's run by scumbags like Lay and Skilling, you won't lose everything. Every month, review your holdings to make sure nothing in the fundamentals has changed. That's NOT hard.
Chef Jim Posted May 26, 2006 Posted May 26, 2006 It was widely reported...but I've never actually seen the original documentation on Enron's 401(k) program that said so. I've also never seen anything that expressly forbids doing it. Sure, it's highly unusual, and it SHOULD be illegal...but according to everything I've ever seen (pre-Enron, since then, I have no exposure to 401(k)s outside managing mine and my wife's), it's perfectly permissible. 698474[/snapback] I think what you're talking about is auto-enrollment where the employer (plan sponsor) automatically enrolls the employees when they become eligible and has the contributions put into a pre specified investment, usually the money market option. In this case maybe it was the companies stock option but by no means is the employee required first to participate in the auto-enrollment or remain in the investment option chosen by the sponsor. It is after all the employees money. Lack of knowledge on the plan's operation is no excuse. It's not that complicated, it's made easy due to the fact that average American's (ie idiots) are using them as their largest retirement asset.
TheMadCap Posted May 26, 2006 Posted May 26, 2006 Having worked in high flying tech companies before, I've seen how little people understand securities, markets and even the company they work for. The problem is we have no formal education in this area in the US. How can it be that in a society based on capitalism we offer young people absolutely no education in this area? (yeah I know, the liberals who control education aren't about to do that and lose millions of votes). The reality is that if you didn't have intelligent parents to teach you, you are on your own for figuring this stuff out. It is amazing (and frightening) how many people have their entire retirement wrapped up in the companies stock. As if the failure of the company and the resulting loss of your job isn't damaging enough? 698195[/snapback] A guy I worked with at PMUSA just retired. He had 100% of his 401k in stock. 100% One judgement against us, and he would have been wiped out at 65 years old...
Chef Jim Posted May 26, 2006 Posted May 26, 2006 A guy I worked with at PMUSA just retired. He had 100% of his 401k in stock. 100% One judgement against us, and he would have been wiped out at 65 years old... 698516[/snapback] Yeah, that is crazy, but he sure could have picked a worse company to have his investment in. Depending on how long he's worked there and what he was contributing I'm assuming that's one pretty fat 401k. Tell him to roll it out and diversify it NOW.
GG Posted May 26, 2006 Posted May 26, 2006 It was widely reported...but I've never actually seen the original documentation on Enron's 401(k) program that said so. I've also never seen anything that expressly forbids doing it. Sure, it's highly unusual, and it SHOULD be illegal...but according to everything I've ever seen (pre-Enron, since then, I have no exposure to 401(k)s outside managing mine and my wife's), it's perfectly permissible. 698474[/snapback] I believe what was reported is that the employees could allocate their contributions among various investments, but the company match was much higher if the allocation was in Enron stock. That alone should be a dead giveaway. Find companies with low long-term debt, enough liquidity to pay their current debts, reasonable margins, and steadily increasing revenue. (E.g. Google, Nucor Steel, Borders Group, Industrial Services of America) Make sure their stock price isn't outlandishly high with respect to revenue and earnings. (E.g. not Google). Buy the rest. Diversify to ensure that, if one company's run by scumbags like Lay and Skilling, you won't lose everything. Every month, review your holdings to make sure nothing in the fundamentals has changed. You realize that to do what you just described is akin to having a ful time job (which is what it should be) Repeat mode ON - Most individuals should have no business investing in individual stocks & bonds.
Crap Throwing Monkey Posted May 26, 2006 Posted May 26, 2006 You realize that to do what you just described is akin to having a ful time job (which is what it should be) I do it. Spend maybe three hours a month on it. Repeat mode ON - Most individuals should have no business investing in individual stocks & bonds. 698597[/snapback] Agreed...but that still doesn't make managing investments hard.
GG Posted May 26, 2006 Posted May 26, 2006 I do it. Spend maybe three hours a month on it. Agreed...but that still doesn't make managing investments hard. 698604[/snapback] Yeah, but you're not regular people. You're a monkey. How many people even know what a 10K is, let alone understand it?
HereComesTheReignAgain Posted May 26, 2006 Posted May 26, 2006 I still marvel that ANYONE put their money anywhere NEAR these guys' trust after they said in their annual report, point blank: "We can't tell you how we make money, we'd be giving away a trade secret." Yes, these guys are crooks - hell, that one statement pretty much proves it. And it's perfectly just that they'll rot in jail for the rest of their lives. But no one who was dumb enough to put ANY money in Enron should be blaming their hardship on these two. 698171[/snapback] I would be willing to bet that the majority of the workers who had most or all of their retirement $ in Enron stock were told at one time how stupid it was. It is a basic rule of retirement investing that no one stock should ever make up a big % of your portfolio. When you are making a fortune on a stock, you tend to think it will never go down and the common sense rules don't apply to you. I think there was some issue with restrictions on selling Enron stock also. That is the only situation that deserves any sympathy with regard to Enron stock.
HereComesTheReignAgain Posted May 26, 2006 Posted May 26, 2006 It is? GE, Coca-Cola, Microsoft, treasury bonds, cash reserve. Need I say more? 698413[/snapback] I really hope that you do not feel that is a good diversified portfolio for retirement!
Crap Throwing Monkey Posted May 26, 2006 Posted May 26, 2006 Yeah, but you're not regular people. You're a monkey. How many people even know what a 10K is, let alone understand it? 698627[/snapback] They should learn. I did. Or am I really that much smarter than the average person?
Crap Throwing Monkey Posted May 26, 2006 Posted May 26, 2006 I really hope that you do not feel that is a good diversified portfolio for retirement! 698667[/snapback] Actually, that's not representative of JSP's portfolio. Add beer, and it would be...
Jon in Pasadena Posted May 26, 2006 Posted May 26, 2006 Or am I really that much smarter than the average person? 698669[/snapback] I prefer to phrase it as "The average person is much stupider than a crap-throwing monkey".
Chef Jim Posted May 26, 2006 Posted May 26, 2006 Add beer, and it would be... 698670[/snapback] That's what the cash reserves are for.
TheMadCap Posted May 26, 2006 Posted May 26, 2006 Yeah, that is crazy, but he sure could have picked a worse company to have his investment in. Depending on how long he's worked there and what he was contributing I'm assuming that's one pretty fat 401k. Tell him to roll it out and diversify it NOW. 698526[/snapback] Most people walk out of there loaded. The only problem is, that while profits are usually good at the company, one successfull lawsuit can fluccuate you out of tens of thousands...
Chef Jim Posted May 26, 2006 Posted May 26, 2006 Most people walk out of there loaded. 698755[/snapback] Sounds like one of my parties. On that note have a safe holiday everyone!
Crap Throwing Monkey Posted May 26, 2006 Posted May 26, 2006 Sounds like one of my parties. On that note have a safe holiday everyone! 698796[/snapback] Sounds like a lame party. If they were crawling out loaded, though...
Pine Barrens Mafia Posted May 27, 2006 Posted May 27, 2006 I really hope that you do not feel that is a good diversified portfolio for retirement! 698667[/snapback] It's a hell of a lot better than a savings account or 100% in Enron stock.
Chef Jim Posted May 29, 2006 Posted May 29, 2006 It's a hell of a lot better than a savings account or 100% in Enron stock. 698929[/snapback] Better, but not a hell of a lot better.
KD in CA Posted May 30, 2006 Posted May 30, 2006 Yeah, but you're not regular people. You're a monkey. How many people even know what a 10K is, let alone understand it? 698627[/snapback] Hey I have 10K in my retirement account, I'm all set!
Helmet_hair Posted May 30, 2006 Posted May 30, 2006 So? I did. It's easy. Admittedly, I am a genius...but it's easy nonetheless. I bet it’s difficult for you to find a big enough hat size that fits!
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