3/17/08

Bear Stearns, etc

Perhaps it's obvious, but I think it should be pointed out anyway. If you work for a company that is publicly traded, don't invest too much in its stock. If the company goes bust, not only do you lose your job, but your investments as well. A lot of Bear Stearns employees, supposedly smart people, just lost their 401ks.

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One investment bank down, maybe a couple more to go.

I had a couple of limit orders from a while back that I canceled. I'm trying not to buy anything until people stop talking about a bottom being in sight. There's still too much hope, I think.

I'm also not selling anything. Let the dividends reinvest. I've got plenty of time to wait for them to go back up.

Stocks I'd like to own (more of) in the future: NS or NSH, KFT, GE, PFE, PG, RAI, MO.

Stocks look cheaper now, but I'm wondering how much of their profits have been fake all these years. The housing boom was fake. That we know. All the industries that benefited from it, e.g., raw materials, banks, also had fake profits. By fake I mean that they were short lived and not based on real growth. There are plenty of great companies that are being sold off too. I'm going to start looking for the small caps, as they have more room to grow.

Something about the current situation seems very much like the great crash at the start of the great depression. This time it's institutions that have been over leveraged. And the run on Bear Stearns was by institutional investors.

I wonder, will Bernanke resign in disgrace and then be presented with a medal by Bush?

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