Enron; Adelphi; WorldCom; Xerox …(and there are probably more to come)…
We have a lot of knowledgeable people on this site in a lot of areas, so I pose this question. Who do we trust to help us invest? (Don’t just say “ourselves” because we can’t be expert in everything, contrary to some people’s belief).
If the most trusted and respected advice comes from people who, as part of that advice, utilize the financial statements and records of these companies, what the hell are we supposed to do if these companies are “cooking the books” the vast majority of the time? Does the good advisor know how to “see through” this “creative accounting?” Is investing in the equities market a mere “crap shoot”, and that we’re better off trying our hand in Vegas (or getting that dart throwing Monkey that beats the market every year?)
It’s scary…and frustrating…especially as these executives walk away with millions and a hand slap…
Well, for one thing, you’re looking at stock investments as your only option. Big mistake. You need to diversify. The people who make money at stocks PLAY with it. Don’t put any money into stocks that you couldn’t lose and just say “Oh well, that was fun, let’s try again.” Real estate, CDs, savings bonds (not great these days). Investing in people. There are quite a few investment clubs around that are doing pretty well (the idea of a pooling of minds). When you’re young, you can afford to make some risky investments (which have a higher return), but as you get older, you need to make more secure investments (the time to make up for losses is shorter). Yes, the stock market can be a crap shoot. Even within stocks you need to diversify.
its not a crap shoot…however weather a stock goes up or not is more market speculation than anything else. Take a stock that’s expects to have great earnings and then just has good earnings… the stock will drop b/c it didnt meet expectations.
understanding the finacial statement of the co’s is also a big part of investing however most people-including myself arent competant at doing it.
I completely agree with brider. What had happened during the market boom, was many, many people who had no knowledge about investing, began to do so and had that “hey, I made some $$, this is great - let’s do it again” - w/out becoming more knowledgable about the market themselves. What the media mostly reports are about those people who lost or continually lose in the market. So, one of the things to do, Mufasa is start to investigate yourself. Talk to the people who have had the ups AND downs - but still invest. It’s like training/nutrition - you have to do some research for yourself and become knowledgable. And as brider said: diversify.
Mutual funds are a good way to diversify. I like total market funds, since (if they are managed well), they will rise at about the same rate as the rest of the market, which beats out inflation quite nicely. But the market sucks at the moment (though that means it’s a good time to buy).
I’m very distrustful of the market. I know a lot of people that have done well with it, and I wish them well. I don’t think that I have the time or the proper instincts, however, to aggressively invest. I also think a lot of the concepts involved with investing are rather arbitrary and abstract, and it frustrates me to no end. As far as individual stocks, however, my opinion is that you put a lot of time and money into it, and if you’re lucky, you get back the money.
No investing is not a crap shoot. Start by reading “The Only Investment Guide you will Ever Need”. It give you good solid advise and an over-all strategy that you can do in phases.
Best of Luck.
And Yes it is high time we sent some of these people to jail! As an officer in the military I was responsible for every my men did or failed to do. This standard should be applied to anyone who asks for public trust. Throw Ken Lay in jail and impoumd all his property and sell it and distribute the money to those screw by the actions of ENRON under his watch and we will see Corporate America start to change.
Here’s some easy investing advice. Don’t buy any stocks I own. Worldcom-got it. Global Crossing-mine. Tyco-was my best performing stock. Doubleclick.com-I can cash in my stocks and SuperSize a number six at McDonalds.