NationStates Jolt Archive

. .Enron woes reverberate through lives


http://news.yahoo.com/s/usatoday/20060126/bs_usatoday/enronwoesreverberatethroughlives

How did it happen? Like many employees, Boyce believed in Enron's stock. He bought and held Enron shares until it was too late to get out...

Enron workers' retirement savings were demolished because their 401(k) assets were mostly invested in company stock, which was considered a sound investment until late 2001...

In 2001, Tom Padgett, 63, was within six months of retiring and was feeling pretty good about his retirement. The former senior lab technician had 11,000 Enron shares - worth about $700,000 before Enron's bankruptcy - in his 401(k)...

[rant font on]

Yes losing any amount of money is any investment sucks, but it is a part of life for any equity investor. These folks are 100% responsible for investing foolishly. Excuse me for not having an ounce of sympathy for them.The golden rule of investing is simple: DIVERSIFY. (http://money.ninemsn.com.au/article.aspx?id=28597)
I have no sympathy for someone who invested 100% of their retirement in ANY stock and got their ass handed to them, be it ENE, LU, KM or whatever.

Most of these folks were not simple minded, they were skilled and educated. They should have known better. Even those who weren't - what nimrod gets a substantial nest egg then does not consult an experienced professional? Especially as they near retirement? Even a semi-competent professional advisor would have told them to diversify. Did they consult one? Of course not. Probably 'too expensive'. (sigh) They found the cheapest way to lose money!

I frankly say tough shit. You put the money on red and lost - quit blaming the table - it was you choice to lay the money there.

These folks had plenty other investment choices in their 401k. The thought that three weeks illiquidity (due to ENEs compliance with a SEC requirement involved when there is a change of plan admin - completely unrelated to the scandal) caused them all to go down the tubes is a farce. The stock had lost 50% before then, and still had value after. The participants had PLENTY of time the fifteen years prior to then to choose to diversify.

Here is the funniest line I read in the story:
...their 401(k) assets were mostly invested in company stock, which was considered a sound investment...
WHAT??? According to whom? Really.. By what standards? A 'sound investment' is a fairly large blanket term which could imply treasury quality to the trashiest of assets. I wouldn't call a $700,000 portfolio invested 100% in ANY one stock a sound investment - unless the sound was of flatulence. The author obviously knows nothing of 'sound investing'.

These sob stories about people feeling bad because they made STUPID investment decisions really irk me. Step up folks and admit YOU mad a stupid decision. Yes, Ken and his gang all deserve everything that the SEC can throw at them, but if these investors had invested with any sense of responsibility they would all still have been able to reach their goals with the other assets - which would have grown quite nicely since then. It is not Enron’s fault, it is their own. Quit crying about it and move on folks.

[rant font off]

Yea damn those idiots for investing in a company that lied about it's numbers!

Bozzy you have defended some strange stuff; but blaming investors the lies of companies is pretty pathetic.

What's next blaming the victims of random attacks? After all if they had taken "personal responsibility" then they would not be attacked.....

It's Enron's fault because they lied and cooked their books so the company looked like it was worth more than it really was. Had Enron been transparent, these people would have taken their money elsewhere years earlier.

I hope that some day some corporate wrongdoings screws you out of thousands of dollars, so I can tell you to suck it up and stop crying as you file bankruptcy.

Playboy had a Women of Enron issue... I think...

I'm one of the few people that deserved the Enron loss.

I gambled and bought 190 shares when the price fell after the fiasco. I was sure that the government was going to bail out the company, and I would be able to have a significant gain. Alas, that did not happen. :(

As for the poor souls that invested in Enron when they were lied to, and had reason to beleive it was a good investment...

well thanks all of you for completely missing the point. This is not about people who invested in ENE and lost - it is about people who invested EVERYTHING in ENE and lost.

For those of you who still don't get it - that is the difference between getting a bad haircut vs a bad full body wax. One just sucks, the other was just a dumb idea that resulted in alot of unneccesary pain.

I made clear that Kenny deserves to be punished - I just don't feel sorry for the dumbshits who put 100% on ENE. Is that so hard to grasp?

And Sdaeriji , what makes you so sure I DIDN'T lose money with ENE? I'm just smart enough not to put 100% in any single position. I'm sure that is not beyond your vindictive mind to grasp.

And Sdaeriji , what makes you so sure I DIDN'T lose money with ENE? I'm just smart enough not to put 100% in any single position. I'm sure that is not beyond your vindictive mind to grasp.

Because I have no reason to believe a word you ever say, so naturally I don't believe that you had Enron stock. I don't believe you'd be so hostile to people who invested in Enron if you'd lost any considerable amount of money, unless you are the most uncompassionate person ever.

hindsight sure does make you brilliant

its my understanding that not only was enron touted as a great investment but its inhouse 401K plan allowed ONLY investment in enron stock. AND when the price was dropping as enron fell apart, those 401K holders were barred from selling (while the execs sold all their own holdings)

oddly enough, most people arent experts in investments so they take the advice of others. turns out that "others" were dead wrong when it came to enron. i do feel sorry for people who's retirement has been ruined by unscrupulous executives at enron. they werent the only ones caught having put too much money into what turned out to be a sleazy scam.

hindsight sure does make you brilliant

its my understanding that not only was enron touted as a great investment but its inhouse 401K plan allowed ONLY investment in enron stock. AND when the price was dropping as enron fell apart, those 401K holders were barred from selling (while the execs sold all their own holdings)

survey says! .... BZZZZT

Sorry, you would be wrong. 401ks strictly prohibit a plan sponsor from offering only company stock. Sorry, care to guess again?




oddly enough, most people arent experts in investments so they take the advice of others. turns out that "others" were dead wrong when it came to enron. i do feel sorry for people who's retirement has been ruined by unscrupulous executives at enron. they werent the only ones caught having put too much money into what turned out to be a sleazy scam.
These 'others' they took advice from, were any of the real financial advisors? Umm, apparently not. You don't need to be an expert investor to understand the simple concept of diversification.
YEs, I do think that ENEs unscrupulous behavior is reprehensible and the people who sufferend portfolio losses as a result have a valid grievance, but I have no remorse for greedy folks who stupidly put everything they have in one stock, regardless of which company it is. You summed it up best with "too much money into what turned out to be a sleazy scam"

survey says! .... BZZZZT

Sorry, you would be wrong. 401ks strictly prohibit a plan sponsor from offering only company stock. Sorry, care to guess again?



You are easily the most obnoxious poster ever.




These 'others' they took advice from, were any of the real financial advisors? Umm, apparently not. You don't need to be an expert investor to understand the simple concept of diversification.
YEs, I do think that ENEs unscrupulous behavior is reprehensible and the people who sufferend portfolio losses as a result have a valid grievance, but I have no remorse for greedy folks who stupidly put everything they have in one stock, regardless of which company it is. You summed it up best with "too much money into what turned out to be a sleazy scam"

So people who only lost part of their portfolio have valid grievances, but people who invested all of their money are greedy and deserve what they got? If you call Enron investors greedy, what word do you use to describe the people responsible for the whole Enron scandal?

Having worked in accounting, I'd like to see draconian punishments and much more rigorous reporting standards (buttressed with more diligent auditing, internal and public).

That said, I think Bozzy's overall theme of the investor being responsible for diligent portfolio management (particularly diversification) is good advice.

If some drunk driver nails you and kills your baby, the drunk driver should be punished in all circumstances. If you had your baby sitting loose on the dashboard instead of in the back in a carseat, you might share some responsibility.

You should never invest in your primary employer - for a variety of reasons.

That said, Enron execs were touting ENE to the employs so they themselves could dump that POS at a higher price. This of course is completely reprehensible, illegal &c. Frankly, this is one case where I would advocate piercing the corporate veil, so the courts can attach the assets of the board of directors as part of a settlement for the stock holders. It's the very least that can be done to punish them for putting those criminals in charge.

Won't ever happen though.

Frankly, this is one case where I would advocate piercing the corporate veil, so the courts can attach the assets of the board of directors as part of a settlement for the stock holders. Won't ever happen though.


I'd sign on with that. Of course, I have no power...

You are easily the most obnoxious poster ever.
and you are a ninny. Your point?


So people who only lost part of their portfolio have valid grievances, but people who invested all of their money are greedy and deserve what they got? If you call Enron investors greedy, what word do you use to describe the people responsible for the whole Enron scandal?
Crooks. Oh, and people who invest all of their money in ANY one stock are fools. Greedy fools.

You should never invest in your primary employer - for a variety of reasons.

That said, Enron execs were touting ENE to the employs so they themselves could dump that POS at a higher price. This of course is completely reprehensible, illegal &c. Frankly, this is one case where I would advocate piercing the corporate veil, so the courts can attach the assets of the board of directors as part of a settlement for the stock holders. It's the very least that can be done to punish them for putting those criminals in charge.

Won't ever happen though.

I am curious to see if the US refunds all the taxes that ENE paid on those inflated numbers to the shareholders / creditors...

Meanwhile... I understand part of the reforms put in effect after the scandal is that all CEOs must sign all financial statements of a corporation. This introduces a new level of liability...

That said, I also think Arthur Anderson should also be held responsible. Lets face it - tax code is complicated. IF a CEO had to sign of on everything their companby does there would be no CEOs because there is nobody who knows everything. Tax codes are among the most complicated. A CEO should be able to trust their accountant rather than BE their accountant. Just as a CPA can go to court to represent an individual taxpayor (and be liable for underpaid taxes if caused by their error)

BTW - word of advice and caution - this applies ONLY to CPAs - not tax preparers. There IS a difference...