Wow! Such a serious title, and it’s only about 10 in the morning. At first I wanted to call this piece something wacky like “How Many Bureaucrats Does it Take to Change a Light Bulb?”, but changed my mind after reading Lehman’s (LEH) climate change report. Now is unfortunately not the time for “How Many XYZs Does It Take to Change a Light Bulb?” jokes.
"Sent you a message on your Facebook acct...you adding to Merrill Lynch (MER - $42.97)? Can't get a read on the big pullback..do the institutional traders know something we dont?"
I'm not adding to MER and I'm actually out of it for a while. My stop loss rule got me out just after I wrote about Thain. (Sadly, I did not apply that same stop loss rule to some other stocks recently).
The institutional traders are selling everything financial. There is nothing special happening with MER that isn't happening with Lehman (LEH - $42.03 ), Goldman (GS - $160.92), Citigroup (C - 20.16), Morgan Stanley (MS - $40.62) and the rest. And if there is I'm not sure what it is. Unless you have really done a lot of research and figured out something special about specific financial companies, I'd rather play the financials using the financials iShare (XLF -23.66) at this point. I'd rather not take the specific risk of any one company at this point. If you believe financials are cheap you might as well buy them all. The fund provides diversification and thus is much less risky. I don't know if any of these firms are going under but I'm sure they are all not. And when they bounce back up they will NEARLY all bounce together.
Free Toaster With Your Bank? Written By: David Neubert 2008-08-06 14:09:25
Bank Shares are just so darn cheap right now they could be giving them away with toasters. If you don't want to have to figure out which bank is going under next you can just buy the (XLF -22.36) on next dip. Personally, I've been buying Lehman (LEH - $20.63) because I think they will not go the way of Bear Stearns and American Express (AXP - $38.13) because they are not a bank and any temporary reduction in credit card spending will be made up by the secular trend toward credit card usage and the higher service provided by American Express products.
Personally, and for my net worth, I'm disappointed that Lehman (LEH, LEHPQ - $0.30) didn't get rescued. As an ex-employee and shareholder I would have liked some of the public money Ms. Roberts mentions being thrown around for Lehman. It was the last place I worked and its collapse hit me hard.
How the Lehman Collapse Made Me Thankful - Part 2 Written By: David Neubert 2008-09-19 17:24:02 This is a reposting of an article from earlier today including a tragedy that gave me true perspective (the humble perspective is at the end):
Personally, and for my net worth, I'm disappointed that Lehman (LEH, LEHPQ - $0.30) didn't get rescued. As an ex-employee and shareholder I would have liked some of the public money Ms. Roberts mentions being thrown around for Lehman. It was the last place I worked and hit me hard. But that is selfish (like most finance people rescued care of the public coffers).
