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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 749112  
Subject: Enron Found Not Guilty! Date: 5/25/2006 11:41 AM
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Wouldn't that piss off the left?



Seattle Pioneer
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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296539 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 11:48 AM
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>> Wouldn't that piss off the left? <<

I can't possibly see Skilling getting off; he seems to have been a ringleader in the whole mess. Lay might avoid conviction on some of the most serious stuff, but I don't think the jury would let him completely walk, either.

#29

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296542 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 12:06 PM
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Wouldn't that piss off the left?

It seems fairly bizzare to me that people frame this as a left/right issue.

Lay and Skilling helped destroy two large companies (Enron and Arthor Andersen), damaged the faith of the American public in corporate America, and their actions proved that corporations could not longer be trusted under current rules which lead to Sarbanes-Oxley which has been a royal pain in the patootie for businesss.

With all the damage these two knuckleheads have done to corporate America, it seems to me that right wingers would want the death penalty for these yahoos.






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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296543 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 12:11 PM
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Lay guilty on all counts, Skilling looks like he's gone for life too.

2828

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296544 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 12:12 PM
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>> Lay and Skilling helped destroy two large companies (Enron and Arthor Andersen), damaged the faith of the American public in corporate America, and their actions proved that corporations could not longer be trusted under current rules which lead to Sarbanes-Oxley which has been a royal pain in the patootie for businesss. <<

Some smaller, public companies have been shopping themselves to well-capitalized private investment groups and holding companies lately...primarily because the cost and hassles associating with SOX compliance are becoming too much for some to bear.

#29

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296546 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 12:20 PM
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With all the damage these two knuckleheads have done to corporate America, it seems to me that right wingers would want the death penalty for these yahoos.

?
Don't you understand that the right is for corporate corruption?

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296549 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 12:31 PM
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sykesix writes,

SP: Wouldn't that piss off the left?

It seems fairly bizzare to me that people frame this as a left/right issue.

Lay and Skilling helped destroy two large companies (Enron and Arthor Andersen), damaged the faith of the American public in corporate America, and their actions proved that corporations could not longer be trusted under current rules which lead to Sarbanes-Oxley which has been a royal pain in the patootie for businesss.

With all the damage these two knuckleheads have done to corporate America, it seems to me that right wingers would want the death penalty for these yahoos.

</snip>


Don't forget that Ken Lay is a Chickenhawk in good standing and a Bush supporter, financier, and apollogist.

There's much to like about him if you're a right-winger. <LOL>

intercst



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Author: retireearlyboi Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296555 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 1:01 PM
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FWIW. I'll just write a few words because this struck me emotionally today. I am finding it difficult to believe it in myself but I actually feel compassion for these guys. I am currently reading "Wall Street versus America," by Gary Weiss. The entire system is rife with corruption. If you believe Weiss, the Attny General of NY, the SEC, the NYSE, congress, all sit idly by and watch these sorts indescretions go by unpunished. The question I am asking myself is why single out these guys? Was what they did relatively wrong, compared to the billions of dolalrs which are bilked out of America every year in microcap scams, hedge funds, overpriced actively managed funds, late trading, etc Meanwhile the authorities sit by idly or make the appearances of being busy by passing innocuous unenforceable legislation.

I have read about some of the things that Andy Fastow did. I believe that these things were really blatant thievery perpetrated on the investors, and he deserves to be punished. I think the punishment (was it ten years?) fits the crime, or perhaps a little extreme. But it seems they have come down rather hard on these guys in a relativeistic sense. Decades of prison time? I really don't know who is served by that. Example for other corporate executives to keep their nose's clean?

I suppose their defense teams have been successfully and to an extent the press has been successful. I actually feel for these guys today. Of course I did not lose my life's savings in the colapse of Enron.

Again, FWIW.

-reb

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Author: eboller Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296556 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 1:03 PM
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Wouldn't that piss off the left?

Seems to me it should piss off everyone.

Eric

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296557 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 1:05 PM
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apollogist

One L please: apologist

Of course, "pollo" is chicken in Spanish.

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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296564 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 1:32 PM
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Lay was convicted of all six counts of conspiracy and fraud and faces a maximum of 45 years in prison.

Skilling was found guilty of 19 counts of conspiracy, fraud, insider trading and making false statements which, combined, carry a maximum sentence of 185 years. He was not convicted on nine criminal counts.
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But wait guys there is some good news...i just saved a bunch of money on car insurance by switching to Geico.

2828

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Author: Evelynk Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296566 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 1:33 PM
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Some smaller, public companies have been shopping themselves to well-capitalized private investment groups and holding companies lately...primarily because the cost and hassles associating with SOX compliance are becoming too much for some to bear.

It's a lesson most people learned in childhood: it's always one or two people that spoil it for everyone.

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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296567 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 1:49 PM
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FWIW. I'll just write a few words because this struck me emotionally today. I am finding it difficult to believe it in myself but I actually feel compassion for these guys.
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I'm going to withold my compassion until i find out exactly how many years they are going to get. I'm thinking 10-15 years would be about right but i also didn't have my life savings in Enron, i decided on the much safer Excite@Home investment. Either way they got a much worse verdict than OJ Simpson, if they just would've stabbed the investors to death they might be playing golf today.

2828

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Author: LuckyDog2002 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296572 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 2:12 PM
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Wouldn't that piss off the left?



Seattle Pioneer


I'm not a member of the left and I would have been p.o.'ed if they hadn't been found guilty. Slimeballs deserve the longest possible sentence.

LD

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Author: inhanyt Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296575 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 2:45 PM
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Skilling looks like he's gone for life too

That weather guy always sucked.

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Author: retireearlyboi Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296583 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 3:27 PM
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...if they just would've stabbed the investors to death they might be playing golf today.

2828


You captured my sentiments in a way I could not have come up with. Thanks.

-reb

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Author: clifp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296587 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 3:49 PM
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if they just would've stabbed the investors to death they might be playing golf today.

2828



Well the FBI and Fed's weren't stupid enough to try and plant evidence to convict Skilling and Lay. I have no doubt OJ was guilty, but he only ruined the lives of the Brown family and some of Nicole's friends.

I'd recommend watching the Enron documentary "The smartest guys in the room"

Skilling, Lay, and Fastow ruined the lives of thousands of employees, at least that many investors, and put the State of California through a Enron-induced energy crisis for an entire summer.

My only regret is that Ken my get out of jail before he dies, and Skilling is too young to serve out the full 100+ years he so richly deserves.




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Author: FCorelli Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296592 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 4:11 PM
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seems fairly bizzare to me that people frame this as a left/right issue.

Lay and Skilling helped destroy two large companies (Enron and Arthor Andersen), damaged the faith of the American public in corporate America, and their actions proved that corporations could not longer be trusted under current rules which lead to Sarbanes-Oxley which has been a royal pain in the patootie for businesss.

With all the damage these two knuckleheads have done to corporate America, it seems to me that right wingers would want the death penalty for these yahoos.


Exactly. This is exactly the type of behavior that creates Roosevelts (Both Franklin & Teddy)and New Deal-type thinking.

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Author: FCorelli Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296594 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 4:12 PM
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>> Lay and Skilling helped destroy two large companies (Enron and Arthor Andersen), damaged the faith of the American public in corporate America, and their actions proved that corporations could not longer be trusted under current rules which lead to Sarbanes-Oxley which has been a royal pain in the patootie for businesss. <<
>>>>>>
Some smaller, public companies have been shopping themselves to well-capitalized private investment groups and holding companies lately...primarily because the cost and hassles associating with SOX compliance are becoming too much for some to bear.#29


Gee, if they all went private where would we buy stocks for our Social Security accounts?

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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296596 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 4:22 PM
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Gee, if they all went private where would we buy stocks for our Social Security accounts?
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Now why would we ever need personal accounts when the gov't is doing such a fine job as steward of the social security system?

2828

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Author: maracle Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296598 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 4:34 PM
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I'd recommend watching the Enron documentary "The smartest guys in the room"


A great book that chronicles what happened to Enron is "Conspiracy of Fools." Its really pretty unbelievable.

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Author: ggiovanni Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296627 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 8:48 PM
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Wouldn't that piss off the left?

Seattle Pioneer


The Rule of Law!

Relevant to Republicans when Bill Clinton was in charge.
Irrelevant to Republicans when Bush Jr is in charge
Relevant to Republicans when Hillary is in charge (is there any doubt?)

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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296632 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 9:18 PM
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Wouldn't that piss off the left?

It seems fairly bizzare to me that people frame this as a left/right issue.


Why does it seem bizarre? Every other issue is being framed as a left/right issue.

Remember:
Left = Right
and
Right = Wrong

Or at least this seems to be the philosophy over at the Political Asylum board.

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296643 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/25/2006 11:12 PM
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Some smaller, public companies have been shopping themselves to well-capitalized private investment groups and holding companies lately...primarily because the cost and hassles associating with SOX compliance are becoming too much for some to bear.

It's a lesson most people learned in childhood: it's always one or two people that spoil it for everyone.


According to some studies I've read, the cost to the US economy of compliance with Sarbanes-Oxley is approximately equal to the cost of the Enron scandal...

... per year that it's in full effect.

The Enron scandal took ten years to develop and was exceptional in its size. It wasn't something we had occurring every year. (Yes, we had the Worldcom scandal more or less alongside it. That also took more than ten years to develop.)

And over 75% of the money will be spent on compliance, or on monitoring compliance, by companies so small that a group of 50 of them couldn't buy Enron's *legitimate* assets today. (One of those assets just sold for $2.9 billion. http://biz.yahoo.com/rb/060525/energy_enron_prisma.html?.v=1 )

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Author: alchook Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296655 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 7:53 AM
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Wouldn't that piss off the left?



Seattle Pioneer


I hope so.

I hope it would have pissed off you as well.

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Author: MrCheeryO Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296666 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 9:46 AM
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...With all the damage these two knuckleheads have done to corporate America, it seems to me that right wingers would want the death penalty for these yahoos....

It is odd that even the Mob understood that if you are going to get the suckers coming back to gamble you have to run a clean shop in Las Vegas. If the punters think the slot machines and roulette wheel are rigged they will quit playing.

Unfortunately a big chunk of corporate America doesn't even have the ethics of the Mob when it was completely in control of Vegas. Watch this widespread back-dating of executive options explode now. Just one step below the perfectly legal repricing of options.

Who is pushing for Sarbanes-Oxley to be gutted?

The "few bad apples" talking point has long gone by the boards. Every year Berkshire Hathaway's annual report is a great little primer on the institutional, legal lack of ethics in corporate America. Bob Bogle occasionally spouts off and is promptly ignored.

And on the phony left-right issue, who has books and accounting practises that are without a doubt worse than Enron's, only legal? Without a doubt. That's right, the Federales.


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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296708 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 1:46 PM
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"Enron Found Not Guilty! Wouldn't that piss off the left?"

What an odd thing to say. Now that they have been found guilty, are you pissed off?

Volucris

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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296712 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 2:03 PM
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"Enron Found Not Guilty! Wouldn't that piss off the left?"

What an odd thing to say. Now that they have been found guilty, are you pissed off?

Volucris
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I personally think that most dems enjoy a good corporate fraud more than republicans because then they can say, "see i told you so now lets put the gov't in charge", it's obvious and i know you guys know it too. Of course i'm very happy they got convicted because they are crooks and because lots of people got hurt, i heard an interview with two former employees and one older employee had 90% of his savings in Enron, not good, also it helps the confidence of the market if bastards go away for awhile. I also think if it truly didn't have any left/right in it that syker wouldn't have gotten something like 100 recs for his rebuttal and enticed the PA board faithful to chime in. Like i said, i think there is a little extra glee from the left, i'm glad but not gleeful, i'm gladful or full of glad, i also think Skilling is really smarmy and cocky. Oh and the George Bush calling Ken Lay "Kenny Boy" and being a contributor also adds to the dem glee, deny all you want but you guys are playing CatherineCoy, and where is she by the way.

2828

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Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296714 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 2:06 PM
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>> Of course i'm very happy they got convicted because they are crooks and because lots of people got hurt, i heard an interview with two former employees and one older employee had 90% of his savings in Enron, not good, also it helps the confidence of the market if bastards go away for awhile. <<

One of the few good things to come out of the Enron mess is that it taught some people not to put too many of their eggs into the company stock basket. Hopefully they'll remember that as the Enron memories fade, lest they repeat the mess.

#29

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Author: GringoFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296716 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 2:50 PM
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One of the few good things to come out of the Enron mess is that it taught some people not to put too many of their eggs into the company stock basket. Hopefully they'll remember that as the Enron memories fade, lest they repeat the mess.

#29



Don't count on it. Maybe some of the ones who actually got burned, maybe. Most of the rest will continue on with the same thinking as usual, that "it's different this time / with this company / etc."


Regards

G.F.


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Author: ogrecat Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296719 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 3:20 PM
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One of the few good things to come out of the Enron mess is that it taught some people not to put too many of their eggs into the company stock basket. Hopefully they'll remember that as the Enron memories fade, lest they repeat the mess.

#29

===========================
Don't count on it. Maybe some of the ones who actually got burned, maybe. Most of the rest will continue on with the same thinking as usual, that "it's different this time / with this company / etc."


Regards

G.F.


Does the possibility exist that employees, who do not invest in company stock, are seen as disloyal or not 'team players'?

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296723 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 3:28 PM
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because then they can say, "see i told you so now lets put the gov't in charge",

Could be. That's where I would disagree with "most dems". However, there should be enough regulation and corporate oversight by the gubmint so that when people do things like this, their butts are nailed to the wall, their ill gotten assets are stripped, and they spend a lot of time watching out for Bubba, so that anyone else thinking of going down this path just shakes their head and says , naaaaaa. As it is, even if they get time, I bet it is at a relatively comfortable federal prison and not Leavenworth.

We'll see how the sentencing part goes, and then the appeals, etc.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296726 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 4:15 PM
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<<One of the few good things to come out of the Enron mess is that it taught some people not to put too many of their eggs into the company stock basket. Hopefully they'll remember that as the Enron memories fade, lest they repeat the mess.

#29
>>


Keep in mind that this advice would have prevented tens of thousands of employees from becoming millionaires at Microsoft, Home Depot, Apple Computer, and other such growing companies.

The Federal government adopted tax policies that encouraged formations of Employee Stock Ownership Programs in the 1980s, which gave company stock to employees for no cost, and more for little cost. That proved to be a great deal for millions of people.


The founders of Home Depot talked about million dollar couches some of their employees bought. These were people who were issued or bought cheap shares as employees and then sold them promptly, just as you suggestt. The price of a couch that they gained later became worth a million dollars.

While there can be value to diversification, it can also be worthwhile to concentrate your investments in a rapidly growing company. That's what most business owners do, and business owners tens to acquire a lot more wealth than most other people.


I'll agree that diversification is a good strategy once you have wealth and want to hang onto it. But many employees would be better off taking some risk to develope enough wealth that it's worth protecting.


In short, your advice would help 1 person while harming ten or a hundred others.



Seattle Pioneer

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Author: Commodore64 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296732 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 5:32 PM
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"While there can be value to diversification, it can also be worthwhile to concentrate your investments in a rapidly growing company. That's what most business owners do, and business owners tens to acquire a lot more wealth than most other people."

Umm, no.

MOST businesses fail. For every Dell or Walmart or Home Depot where the first janitor hired put all his money in company stock and eventually became a millionaire, there are hundreds of companies that either went belly up or never achieved anywhere near that level of success.

The fact that a TINY number of people became wealthy by "putting all their eggs in one basket" does not make it a good investment strategy, anymore than saying playing the lottery is a good investment strategy because some people who play the lottery become millionaires.

If you, as an employee, put all your money into company stock, you're an idiot. You have a small chance of becoming a wealthy idiot (just like the lottery winners), but you will more likely end up an idiot with no money (like those who sunk everything into Enron, most of dotcoms, Boston Chicken, Krispy Kreme, Lucent, and hundreds of others that were going to be the "next big thing" but ended up flaming out).

No matter how good I think a company is, I will never put all my money into it. Thats just prudent investing...

jb







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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296734 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 6:03 PM
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No matter how good I think a company is, I will never put all my money into it. Thats just prudent investing...

The other thing is that if you work at a company, and you have a large investment in stock in the same company, you are well and truely screwed if something Enron-like happens because you are out of both your job and your nest egg.

And lets face it, for every Home Depot there are 100 dot com busts.


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Author: gurdison Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296744 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 7:36 PM
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<If you, as an employee, put all your money into company stock, you're an idiot.>


I usually have a problem with absolutes. The million dollar couches that SP refers to are very real. That type of thinking can happen when you live paycheck to paycheck. Any source of "found money" tends to get immediately converted into current cash. That shortsightedness often costs people big time.

The point that you make about people who have done well with company stock only to lose it all by "letting it ride" is also very real. There are lots of former Enron employees who fit that bill.

I believe there is a prudent middle ground that one can take. First I assume that most people here would be very aware of their overall financials and make their choices accordingly. Their 401k plan would not be their sole source of savings. I would further expect them to not have to immediately convert any found money into current cash. So, an option grant or company stock bought at a discount (fairly common today) would normally be viewed with a longer term time frame. This would not be an absolute either. So, when enough shares were accumulated, a rebalancing may well take place. If you decide to let it ride, it would be done with your eyes wide open rather than the result of emotions or blind loyalty. The Enron employees who lost everything generally had amounts of company stock that were horribly out of whack with their ages and overall net worth.

It can be a delicate balance figuring out where to draw the line. I remember Intercst talking about how his Dell and Pfizer purchases put him way over the top. Neither one was his employer, but he has often stated that the concentration allowed him to reach his goals much sooner than he otherwise would have. Sometimes it helps to be lucky as well as smart!

The fact that both companies are still more than 50% off their highs has clearly cost him some money. However, that paper loss is nowhere near enough to threaten his retirement. Since he long ago went into the distribution phase, he keeps enough funds in liquid form to cover a number of years of expenses. That way you are not forced to sell into a prolonged downturn. That is a core concept of the REHP.

The level of risk you take on should correlate to where you are in the accumulation/distribution phase and your overall net worth. If you have say 10k shares of company stock @40, you would have 400k. If you are say 45 with a total net worth of 500k, you should recognize the very heavy risk you are taking on by not liquidating some of your shares. Similar employees with the same amount of company stock but a net worth of 600k, 800k or 1200k may well view the risks very differently.



B

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Author: 2828 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296745 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 7:45 PM
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I usually have a problem with absolutes. The million dollar couches that SP refers to are very real. That type of thinking can happen when you live paycheck to paycheck. Any source of "found money" tends to get immediately converted into current cash. That shortsightedness often costs people big time.
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This talk of couches reminded me of a story, a former employee of mine inherited something like 250,000 dollars from his grandfather, he bought a new green leather sectional sofa for something like 5k, later when he blew all his money on coke and totalled his car he sold the couch to someone for 500 dollars, this all in the span of a year.

2828

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296749 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 8:24 PM
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<<No matter how good I think a company is, I will never put all my money into it. Thats just prudent investing...

The other thing is that if you work at a company, and you have a large investment in stock in the same company, you are well and truely screwed if something Enron-like happens because you are out of both your job and your nest egg.

And lets face it, for every Home Depot there are 100 dot com busts.
>>


You need to be reminded of Seattle Pioneer's three rules for acquiring wealth:


1. You need to be able to recognize an opportunity

2. You need to have the cash to take advantage of the opportunity

3. You need to have the courage to buy into the opportunity.



Not many people are going to acquire much wealth by investing in index funds. They may be good ways to keep wealth once acquired, but they aren't going to get you much.

So if you don't want to hold stock in a company you work for, fine. As I noted earlier, quite a few employees given Home Depot stock sold it and spent the money.

But if you want a chance at wealth, the odds increase if you can recognize an opportunity and have the courage to take advantage of it, even if there is a risk. In the case of stock given to employees by companies, you don't even have to have the cash to buy in.


But as I say, if you don't want to take the risk, fine. Lots of people are risk averse. But it's bogus to suggest that your strategy is the only reasonable one for people to follow.



Seattle Pioneer

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296777 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/26/2006 11:10 PM
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Does the possibility exist that employees, who do not invest in company stock, are seen as disloyal or not 'team players'?


I believe there are still 401Ks where the portion of your own contribution that is invested in company stock for some minimum amount of time is matched with more company stock.

(If you're in such a situation, go ahead and take the free money so long as you don't have reason to doubt the long-term stability of the company. But only to the point where you've maximized the matching. Once that's done, stay away from company stock. And as soon as you have serious reason to doubt the company's stability, sell the stock and start shopping your resume.)

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Author: markr33 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 296825 of 749112
Subject: Re: Enron Found Not Guilty! Date: 5/27/2006 9:22 PM
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You need to be reminded of Seattle Pioneer's three rules for acquiring wealth:

1. You need to be able to recognize an opportunity

2. You need to have the cash to take advantage of the opportunity

3. You need to have the courage to buy into the opportunity.


These are good rules and similar to how I do things.

Not many people are going to acquire much wealth by investing in index funds.

But for those who want to acquire a little wealth, this is pretty much the only way they are going to do it - invest monthly into an index (or other) fund for 30+ years, probably in a 401(k) type of account.


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