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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: of 19738  
Subject: Re: Living of dividends or growth Date: 1/23/2002 12:59 PM
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<As a result of the Enron disaster, I believe there is a move afoot to outlaw the forcing of company stock on employees.>

As with many government fixes, the medicine may kill the patient. Many companies (among them Ford) have already announced if matches in company stock are not going to be allowed they will no longer make company matches. The matches are often the main selling point to get people to participate.

Similarly, the other change being talked about is limiting one to a maximum of 20% company stock in their accounts. I can hear the screams already from those who want to be protected from losses, but will be very po'd by the government limiting their gains. Every time the stockgoes up and your percentage goes over 20%, a block will have to be sold off to bring it back under 20.

We have a free market. It is most often driven by fear and greed. People are free to make their choices. If one makes a calculated decision to take on the risk of going 100% in their company stock it should be allowed. They are free to maximize their gains. If they figured wrong they are just as free to lose the entire nest egg. A lot of new people came into the markets in the late 90's and bought into the "it's different now" thinking. They bought the high flyers at very high prices (often on margin) thinking that they would continue on even higher. Those that bought in heaviest got taught a very hard and valuable lesson. Their money is gone too.

I do not want to minimize the possible illegal acts committed by ENE and Anderson management. I also recognize that ENE had strong retrictions on the company match portion. What that screams out to me is that every 401k participant should have been extreemly careful in deciding what to invest their portion of their contributions into. Obviously, most were not. That is no ones fault but their own.


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