Posted on 01/15/2002 1:26:47 PM PST by mjk19
Actually, the stock price had already tanked most of the way BEFORE the lock-down. Over the course of almost a year, the stock price went from a high of around $90 to about $15 or $16 at the time of the lock-down. Employees were warned of the lock-down 1 month before it occured, so they did have time to get out. But I guess if someone is the type of person that could watch it drop from $90 to $16 and sit by and do absolutely nothing, then a ten day lock-down isn't going to make them pull out, either. By the time the lock-down was over (around 10 days later), the price had dropped to about $9. So those that sat there and did nothing lost around $74/share before the lock-down, $7/share during the lock-down, and $9/share after the lock-down.
You mean all the way from 14 to 10?
What would you call the period when it dropped from 90 to 14?
I'll take my 401(k), you can stick with social security.
The ugly truth is that ENRON employees had gotten rich on paper during the run-up and didn't have the sense to divest on the way down. Incidentally employee stock holdings were 89% in employee option and 11% in ENRON matching restricted stock. I'm sorry these people got hurt, but I've yet to see any evidence that the company was responsible, except for their overall management incompetence.
You have been misled and/or are misleading others. Enron stock dropped all year long. The frozen window was quite small compared to the rest of the year when they could have bailed out. Anyone with a brain would have got out in the spring. I suggest you check out the stock chart before you pontificate further.
Something tells me your company doesn't offer one and you are just jealous of the rest of us!
It certainly is possible to build up a fortune of a million dollars or more in a 401(k). There is no "scam" about it. You are simply using the principle of dollar cost averaging to build wealth gradually. A method of wealth creation as old as capitalism itself.
There is. It's called COMMON SENSE.
Now tell me, with all that government and NASD oversight how could this have happened? Maybe Enron employees should sue the NASD.
I've been saying it till I'm blue in the face: whoever puts all of their retirement eggs in one basket deserves what they get. I remember when Nokia's stock tripled during a 6-8 month period I was temping there: the exuberance, the plans people made on unrealistic projections, it was something to see. Nokia's a great company to work for, and their stock will bounce back, but they took a big hit just like the other telecoms.
Sheesh, over 60% of employee assets was in company stock? That's crazy!
And the Dallas Morning News doesn't want any restrictions on the amount of company stock in a 401K? I was shocked!!! Oh, I get it, they're employees of Belo, whose stock must be doing pretty well now...let's see how they change their mind when THEIR company experiences a downdraft.
Conversely, we each 'contribute' 6.2% of my salary into Social Security every year. I have ZERO choice on how to invest that money.
Despite my bad picks over the past two years, I feel confident that I will get much more value from my SEP at retirement than from Social Security.
Anybody care to disagree with me?
Additionally, trustees are not held personally liable for the performance of individual accounts; only that the plan give enough options to allow participants to be properly diversified, and the particpants be given enough education to make ann informed decision.
In most cases the underwriters of the investment options provide the education to the emp-loyees through open meetings, newsletters and inserts in paychecks.
Again, 99% of the fault in the 401k Plan losses MUST be that of the individual particpant - that is the law and the consequences!!!!!
Additionally, the price of the stock declined from 16.94 to 9.69 during the blackout period. Anybody could have sold their unrestricted ENE, and those over 50 could have sold all their ENE at any time prior to the blackout.
In fact, I would advise my clients to hold their entire 401k balance in money market (cash) during a blackout period, just in case . . .
In fact, I would advise my clients to hold their entire 401k balance in money market (cash) during a blackout period, just in case . . .
Excellent advice...I can't recall of a major spike to the upside during a blackout period, although I'm sure that has happened in the past.
Does this strike anyone else as too big a coincidence? Just at the time that the stock price was tanking, the company, who knew the stock price was going to tank when they went public with the real financial situation, just happened to be switching record keepers at that very moment in time and the employees had no access to their accounts. But the execs all dumped their shares before the blackout?
That's quite a stretch.
First, please understand that I am not apologizing for the Enron exec's. But this is a website which treasures freedom, and with freedom comes reponsibility. My entire point on this thread is that we are posting without knowlege of the facts - and 401k's are my business.
Changing adminstrators is quite a common practice in corporate America. It takes as long as 18 months to set up a change at a Fortune 500 company. This change was likely scheduled LONG BEFORE even Enron Executives knew something was happening. The blackout was only ten days. During those ten days the price of Ebron declined from $16.46 to $9.69.
Everyone could have sold at least some, if not all of their ENE holdings anytime before the blackout.
The 401k losses just aren't the issue - the issue is the intentional actions of senior management to cook the books to fool the ENTIRE INVESTMENT COMMUNITY.
I have an acquaintance at a major mutual fund company who controlled 40,000,000 (YES !!) shares of the stock and was forced to sell into the decline. So, you see, we ALL suffered from these greedy jerks to some degree or another.
bump.
Almost all investors are more afraid of a major loss in value than they are of a major loss of opportunity. Advising people often requires telling them that they must choose between fear and greed - fear usually wins.
In the case of Enron greed won, with the predictable result.
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