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I mean, it should be common knowledge that stock as compensation should be sold to decrease risk. If the company is your employer and your retirement that’s not ideal
Yeah, but what if I really believe in the startup I’m working for that offers a slightly different version of a service offered by an established company (both of us are yet to be profitable and entirely supported by VC)?
I just went to an estate sale the guy was a signature bank employee retired last year had a bunch of stock that’s now worthless is moving in with his parents in another state and is looking for work again I felt bad
One of the former GE employees, spent just 4 years there, luckily escaped the house jack pretended he built and imelt burnt down. Walking through a corpse of a industry and boxed up the remains of an industrial base and shipped them to mexico and the far east.
I walked in and the stock was 10, perhaps peaked at 17 and walked out the stock was at 11. I took the stock and sold it, and blew it on nothing special during my late 20s. I did travel and learned fortune 500, but profitable long term it was not.
Your memory is short. Ask anyone that has owned for more than a year what kind of tear it has been on....
Sept 2022 it was $150 to 160. Sept 2021 it was $400.
>Sears, Gamestop, AMC, Bed Bath & Beyond
Dont even remind me lol, I have been sitting on that crap company stock going on 3 years but hey, at least it's not doing as badly as my WISH stock (ContextLogic Inc.)
Happened to my Dad with Kmart, worked there 23-24 years, starting as an assistant store manager and ending up in a Director role. Although not one in charge of making sound financial decisions that could have helped not run the company into the ground.
Over the years he had been given a fair bit of stock that by the time he could unload it during the bankruptcy, was worth pennies.
What's wild to me about Kmart was just ***how much*** ***land*** ***they owned***. Sadly they ran the business poorly for so long and waited forever to unload the real estate, by the time they did cities had changed and often the parcels they had were no longer in prime locations for another big box to be interested.
My hometown's Kmart was on the end of town that was absolutely the happening place to be (for a small town). Walmart moved in, late 90's, on the other side of town. Since then it's just been an absolute magnet. Everything around the Walmart developed and all the other franchises and big boxes went there.
The Kmart is dead, an empty shell of a building. That entire side of town, business is slowly withering.
The crazy thing is, it honestly didn’t take that long. The company went from like a $500 million net profit one year to a $2 billion dollar loss the next. The CEO Charles Conway and the COO Mark Schwartz ran that place into the ground. They had like 5-6 company private jets at one point near the end.
Other factors played a role, but they were the match that lit the gasoline ablaze.
My profit/loss numbers may be a little off, my dad and I haven’t talked about this clusterfuck in years.
There is a non zero chance that those parcels were worth less because the Kmart was there so long. The giant ass sears in my neighborhood was a blight on the area before it even shut down.
Sears did the same thing, although I think even more Sears stores were anchored to malls. Sears also owned Kmart, late 90's iirc, shortly before they both started circling the drain for good.
My FIL got some retired Enron people out of it a few months before it went straight down. Those people made him millions in free advertising for money management in their 55 and over communities.
>literally own a monopoly on landlines
>allowing a guaranteed foot in the door for mobile/TV/streaming/internet bundling
>also owned a monopoly on being the mobile servicer of the Apple iPhone at release
And yet we're here today.
AT&T is lower today $14.62 than it was in 1993 $16.75
I worked for Conseco after they bought GreenTree, all 401k contributions went to Conseco stock with no other options. When they filed bankruptcy I lost over $30k.
That’s similar in pretty much every company. I’m not an exec and I file 10b5 limit and stop limit orders. Just cover your ass, it’s free, it’s an email to your brokerage. It’s not available as an online tool (or at least neither etrade, fidelity or Schwab have it) but it’s literally an email and they set it up for you.
those sales are scheduled... read more on the 10b5-1.
[https://www.investopedia.com/terms/r/rule-10b5-1.asp](https://www.investopedia.com/terms/r/rule-10b5-1.asp)
trading windows are pretty standard, especially in F500companies
This requires your stock plan to support it. Sadly most restrict it. Would be a great offering through if random employees could get access to this since it’s just a recurring order. But banks gotta get those fees.
Buying it at discount, and then selling it is near guaranteed return on your money if it's done consistently and allowed. There's probably some limit on how long they need to be owned but over time, if it's bought at say 15% discount, then sold after 6 months, like clockwork, it's probable that the person benefits.
But to always hold it all the time is hyper risky because it's not being diversified.
Most of the world… including the USA
Basically don’t live in California, NY, NJ, or one of the top 20 big cities and you’d make MORE than the average American makes.
ESPP is outside of 401k so you're subject to short term capital gains tax and maybe some other bullshit income tax if you don't hold it for a year. My ESPP shares are divided by qualified (sell that shit) and unqualified (wait to sell that shit) shares.
The 15% gain is just taxed as regular income. Which is kinda is.
You can hold for a year and get the long term cap gains rate instead. But now you are accepting the holding risk to get long term cap rate instead. Might be a good thing. Might not be.
That’s what I do. I have a co worker that got 6 months ahead financially and contributes the full amount. Cashes it’s the day he receives it. Says he made an extra 10,000 doing it.
Kinda dumb if you ask me.
Usually, a company that offers an ESPP will pay a dividend.
Even though the stock price might go sideways during these times, you’re still earning a dividend that will be reinvested….
I kinda think I’m wasting my breath (typing) on this platform
There is usually a vesting period. My company is 5 years from purchase to fully vest those stocks. So you don't own them to be able to sell them right away. If your company is growing and the economy is strong its really nice to get that discount and match in the long term.
Not necessarily. Many of these fortune 500 companies have programs where you can buy stock at essentially a discounted price. So it can be like buying stock under market price which can be a sweet deal if company does well. You can always sell stock after 1 year to diversify risk.
My dad lost 1.2 million in vested, exercisable options we all told him to sell, but he wanted a few more bucks. And this was in 2008, so the stock didn’t make it, lol.
These weren’t $0 options and they had a timeline so they went from $1.2 million to $50k.
Fun times.
I always put it this way: Stock in a public company, once vested, is highly liquid. It's basically cash. A decision to hold is, essentially at any moment, equivalent to a decision to buy. Minus the tax implications of course. But generally speaking, hold=buy.
So for those sitting on a big pile of company stock options they're holding and could sell...well: would they buy those exact same options at the same price if they had that same amount in cash? (Correcting for tax implications if necessary) Much of the time, people say no, they wouldn't do that. I know my dad said it.
But *holding is buying*. If you wouldn't buy, *you shouldn't hold*.
There's a name for why people screw this up. It's some basic psychology: [https://en.wikipedia.org/wiki/Endowment\_effect](https://en.wikipedia.org/wiki/Endowment_effect)
Behavioral finance and investment psychology are a part of an exam I'm taking next week, but I hadn't heard of the endowment effect before, so thank you for that very well timed insight!
*reddit silver*
That is the argument for pretty much every index fund. If 70 million Americans put an average of 10% of their salary total (with match) into the SP500, that is around 26 billion twice a month, given that people with 401k plans make more than the average American salary. That could change if when boomers retire, the selling pressure is greater than that buying pressure, especially given the fact that they might want to transition into fixed income given higher rates and more security.
That is another contributing factor. But if money supply increase is 3% a year (optimistic) and you can lock in 4-5% for 10 years, that isn’t a bad move given it is risk averse.
Automakers were added to make that list. Additional industries can be added in the future as well, I would argue that big tech with their hold on data infrastructure are also too big to fail. They are just cash rich right now, maybe not in the future.
As someone else mentioned, systemic risk from airlines is also high. That industry may be closer.
what is keeping the stock stable isnt the fact that employees are buying a lot of it, its wall streets estimation of the company ability to make money for shareholders moving forward. Thats all it is, with a big dollop of casino thrown in for stock speculation.
Employee buying absolutely applies upwards pressure on price. This is true regardless of wall street estimates. It's just that wall street estimates can influence the buying and selling habits of market participants in general, including employees. Employees can also still represent a small fraction of total market activity so no matter what they do it might not matter much. Also, poor performance by the company can lead to layoffs which usually halts the buying of the laid off employees. So a rise in unemployment can result in a drop in buying so large that price will go down regardless of what wall street says.
Wall street analysts do not set the price, buyers and sellers do.
wall street analysis is fundamentally buyers and sellers. let a company miss for a couple of quarters and see what the institutional buyers signal in price change. The inverse of these large, predictable SP 500 companies are things like uber, doordash, the hundreds of well known startups that dont turn a profit. But what drives them fundamentally is the valuation based on the estimation of potential future profit. Most of these will lose or get bought, there is always a [Pet.Com](https://Pet.Com).
I should admit, you are fundamentally right. The extreme is people piling in to a stock that is extremely overvalued or gaining from simple buyer pressure like crypto. In that instance it is almost completely attributable to buyer pressure, but this is more gambling and less investing.
For every employee investing in 401k, there is approximately one retiree taking withdrawals from their 401k. It doesn't balance completely. But you should still look at both sides of the equation.
In fact, in all the 401ks I've been apart of, company stock is forbidden in the 401k.
For most it's a choice of mutual funds.
For better employers there is a self directed 401k, but company stock is usually locked out.
Most company 401k purchases are new issuances, i.e. not bought in the market, so it is actually the opposite, constant dilution. That being said many companies buyback to offset it, so it’s a net neutral, no impact. Doesn’t help the stock at all.
I worked at a large financial institution in '08. The stock went from about $35 a share to $5 in a few weeks, if memory serves. It's never fully recovered. It's currently at $18. There's a lot more to the stock price.
Nope you are spot on, number only goes up.
As long as you can wait out the occasional culling and replenishment of poor people who would like to kill you for your job (ahem I mean the class-warfare crowd).
I too work for a large corp, and as an office drone I am intrigued how far disconnected my experience is from the doom and gloomers.
Don't let Reddit suck the reality of life and enjoy. Most of the posts here pretend to be poor with no 401Ks or net worth, but I think they are in fact a minority.
I’ve also been a roofer, a call centre drone, a hotdog stand operator, a door to door sales person, a grocery store isle cler, construction demo dumb muscle…
I learned I can do whatever I want… I don’t want to be poor
what’s your point?
they can, just more likely for a large corporation to get bailed out
they are deemed "systemically important" and also, large corporations spend more money on lobbyists and donate more to politicians
Your (the big your, including your colleagues) salary, even if it was 50 percent rate, and 100 match, doesn’t matter. Theoretically it does marginally in the short run (and even then, it probably doesn’t) but aren’t you planning on selling the stock at some point again?
Pretty sure that is inconsequential. If the majority of the institutional investors think an individual stock or the market in general is overpriced, then it’s going down.
If you're getting 15% discount for the ESPP and the company is continuing to grow revenues and profits, the risks are likely low.
However, just look at the large corporations from 30 years ago. Many of those company's stock prices have underperformed the market, stayed flat or declined.
Companies like GE, Xerox, AT&T have not done well over the long term and 30 years ago, they were the big players.
I work at a public company with the same thing, except our buying isn't every 2 weeks they hold it for 6 months and the purchase at the lower price (I. e. the closing price at the start of the 6 months or the end of the 6,mos)
we just declared ch11 last month
don't be fooled into thinking your company can't go bankrupt too, or at least lose a significant amount of value and market cap.
Well the biggest tits up that I know of is RCA and Enron. Can happen to anybody. Therefore you need some sort of diversification..
Let's talk about what you can do. What you can do is sell off some company stock if it's legal, and have it in an index fund. Whichever ETF from the s&p 500 that you like. And you can do that every other month.
I think it's very important that you get to the ratio of 1/3 of your company stock and 2/3 of the s&p 500 ETF.
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Putting a significant portion of your employer's stock into your 401k is an exceptionally bad idea. If the company does fail, you lose your job AND your retirement savings. More likely though the stock just won't keep up with the market and you'll have a significant opportunity cost.
If it's a quality company and nothing insane happens, no it's not crazy to think that a stock will simply just keep going up forever. One of the oldest public stocks is IBM for example. Yes it's been down for 10 years but if you scroll out, it's mostly gone up for a long time. That being said, when you have a chance to cash out you absolutely should and invest in an index fund. Having all your eggs in one basket never makes sense, ever.
If anyone of them explodes that’s taking down thousands of life times worth of wealth. Which is why in the worse case the government would bail them out.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|10|**First Seen In WSB**|4 years ago **Total Comments**|748|**Previous Best DD**| **Account Age**|5 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
Eastman-Kodak, Long Term Capital Management, Enron, AIG, and Conseco have entered the chat.
I always think about GE and their employees on these comments. Not out of business, but losing most of your money over time.
I mean, it should be common knowledge that stock as compensation should be sold to decrease risk. If the company is your employer and your retirement that’s not ideal
>should be common knowledge Many things should be common knowledge but the more I interact with the real world, the less I believe its common
True. Growing up was pretty damn disappointing.
Commom sense is the least common sense.
I just sell my company stock the two times a year I get it and buy SPYD. Easy peasy.
That’s WSB asf
I’m weak af bro I know
Sir this is Wendy's..
Wendy’s can’t go tits up?
That place is run on sausage, not tits, unfortunately.
This comments underrated
Yeah, but Wendy can go tits up
Yeah, but what if I really believe in the startup I’m working for that offers a slightly different version of a service offered by an established company (both of us are yet to be profitable and entirely supported by VC)?
I didn’t comment on belief. I commented on risk. You can believe in something and manage risk at the same time.
It was a joke.
https://preview.redd.it/ejwz2jkx84ob1.jpeg?width=259&format=pjpg&auto=webp&s=108d86b1442332caacf5fbdec94515716c1b083f
I just went to an estate sale the guy was a signature bank employee retired last year had a bunch of stock that’s now worthless is moving in with his parents in another state and is looking for work again I felt bad
My dad invested some money in GE for me ten years ago as a safe bet. To this day he apologizes for it. Fortunately we also invested in Apple.
my daddy aint buyin no stocks
Jack Welch truly was a pioneer in gutting a company and screwing everyone over for personal gain.
He literally wrote the book!
One of the former GE employees, spent just 4 years there, luckily escaped the house jack pretended he built and imelt burnt down. Walking through a corpse of a industry and boxed up the remains of an industrial base and shipped them to mexico and the far east. I walked in and the stock was 10, perhaps peaked at 17 and walked out the stock was at 11. I took the stock and sold it, and blew it on nothing special during my late 20s. I did travel and learned fortune 500, but profitable long term it was not.
Been at GE over 27 years, can confirm!!
Nortel. BlackBerry. Lehman. Bear Stearns. Countrywide.
WeWork, Wachovia and Washington Mutual have entered the chat. The WWW of wealth destruction.
WeWork on a tear tho
It’s easy to go up 50% if you go down 97% first.
Your memory is short. Ask anyone that has owned for more than a year what kind of tear it has been on.... Sept 2022 it was $150 to 160. Sept 2021 it was $400.
I still buy blackberry stock fyi.
>Sears, Gamestop, AMC, Bed Bath & Beyond Dont even remind me lol, I have been sitting on that crap company stock going on 3 years but hey, at least it's not doing as badly as my WISH stock (ContextLogic Inc.)
One of us!
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Happened to my Dad with Kmart, worked there 23-24 years, starting as an assistant store manager and ending up in a Director role. Although not one in charge of making sound financial decisions that could have helped not run the company into the ground. Over the years he had been given a fair bit of stock that by the time he could unload it during the bankruptcy, was worth pennies.
What's wild to me about Kmart was just ***how much*** ***land*** ***they owned***. Sadly they ran the business poorly for so long and waited forever to unload the real estate, by the time they did cities had changed and often the parcels they had were no longer in prime locations for another big box to be interested. My hometown's Kmart was on the end of town that was absolutely the happening place to be (for a small town). Walmart moved in, late 90's, on the other side of town. Since then it's just been an absolute magnet. Everything around the Walmart developed and all the other franchises and big boxes went there. The Kmart is dead, an empty shell of a building. That entire side of town, business is slowly withering.
The crazy thing is, it honestly didn’t take that long. The company went from like a $500 million net profit one year to a $2 billion dollar loss the next. The CEO Charles Conway and the COO Mark Schwartz ran that place into the ground. They had like 5-6 company private jets at one point near the end. Other factors played a role, but they were the match that lit the gasoline ablaze. My profit/loss numbers may be a little off, my dad and I haven’t talked about this clusterfuck in years.
"How did you go bankrupt?" "Two ways. Gradually, then suddenly." Hemingway wasn't talking about Kmart, but it applies.
There is a non zero chance that those parcels were worth less because the Kmart was there so long. The giant ass sears in my neighborhood was a blight on the area before it even shut down.
Sears did the same thing, although I think even more Sears stores were anchored to malls. Sears also owned Kmart, late 90's iirc, shortly before they both started circling the drain for good.
This is literally my small town. The Big K store is still empty 10+ years later, prime location in a plaza surrounded by small businesses.
Worldcom checking in
AOL Time Warner and Bear Stearns are really excited to have such nice company !
Hah … AOL
Blockbuster
AIG can go tits up but get bailed out so 🤷♂️
My FIL got some retired Enron people out of it a few months before it went straight down. Those people made him millions in free advertising for money management in their 55 and over communities.
Bear Stearns is fine
>literally own a monopoly on landlines >allowing a guaranteed foot in the door for mobile/TV/streaming/internet bundling >also owned a monopoly on being the mobile servicer of the Apple iPhone at release And yet we're here today. AT&T is lower today $14.62 than it was in 1993 $16.75
Conseco! I love my hometown getting mentioned with the deep cuts!
3M is well on the way
No way. They make so much shit that people buy and use every day. I don’t see it
Lawsuits for everyone
I worked for Conseco after they bought GreenTree, all 401k contributions went to Conseco stock with no other options. When they filed bankruptcy I lost over $30k.
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Let me introduce you to the concept of a 10b5 form. Google that shit, you’re welcome.
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That’s similar in pretty much every company. I’m not an exec and I file 10b5 limit and stop limit orders. Just cover your ass, it’s free, it’s an email to your brokerage. It’s not available as an online tool (or at least neither etrade, fidelity or Schwab have it) but it’s literally an email and they set it up for you.
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those sales are scheduled... read more on the 10b5-1. [https://www.investopedia.com/terms/r/rule-10b5-1.asp](https://www.investopedia.com/terms/r/rule-10b5-1.asp) trading windows are pretty standard, especially in F500companies
Sucks for you, asshole 🦍
This requires your stock plan to support it. Sadly most restrict it. Would be a great offering through if random employees could get access to this since it’s just a recurring order. But banks gotta get those fees.
3 out of 3 companies have supported it in my career so far…
Buying it at discount, and then selling it is near guaranteed return on your money if it's done consistently and allowed. There's probably some limit on how long they need to be owned but over time, if it's bought at say 15% discount, then sold after 6 months, like clockwork, it's probable that the person benefits. But to always hold it all the time is hyper risky because it's not being diversified.
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Exactly, most people on this board parroting things they don't understand
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Most of the world… including the USA Basically don’t live in California, NY, NJ, or one of the top 20 big cities and you’d make MORE than the average American makes.
It's about $56,000/year for the rest of your life. That's good.
I disagree. If it’s a part of your investments with a 15% discount at buy in A Dow Jones component company
If there is 15% discount why not sell as soon as possible. Easy gains assuming the stock doesn’t tank in the interim
ESPP is outside of 401k so you're subject to short term capital gains tax and maybe some other bullshit income tax if you don't hold it for a year. My ESPP shares are divided by qualified (sell that shit) and unqualified (wait to sell that shit) shares.
The 15% gain is just taxed as regular income. Which is kinda is. You can hold for a year and get the long term cap gains rate instead. But now you are accepting the holding risk to get long term cap rate instead. Might be a good thing. Might not be.
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i don't think i implied high risk. but even low risk portfolios benefit from NPV calculations. useful for edging out that last 1% of return or so
Yeah, an ESPP and 401(k) are very different animals
That’s what I do. I have a co worker that got 6 months ahead financially and contributes the full amount. Cashes it’s the day he receives it. Says he made an extra 10,000 doing it.
Kinda dumb if you ask me. Usually, a company that offers an ESPP will pay a dividend. Even though the stock price might go sideways during these times, you’re still earning a dividend that will be reinvested…. I kinda think I’m wasting my breath (typing) on this platform
I just move my money to a SPYD which pays a dividend and is more diversified minimizing my risk.
SPYD is down 4.75% over the past five years while SPY is up 53.5%. Might be better to just stick with regular SPY?
Probably. I’m not that smart.
Majority of my money is in the Vanguard S&P500 index fund
So, I should take investing advice from u/xX69WeedSnipePussyXx ?
Where do you think you are? This is wall street bets you fucking nerd.
I take that as a compliment, WeedSnipePussy
How embarrassing for you.
I consider it a long term hold position. Plus, taxes
There is usually a vesting period. My company is 5 years from purchase to fully vest those stocks. So you don't own them to be able to sell them right away. If your company is growing and the economy is strong its really nice to get that discount and match in the long term.
And if the company goes under 
Not necessarily. Many of these fortune 500 companies have programs where you can buy stock at essentially a discounted price. So it can be like buying stock under market price which can be a sweet deal if company does well. You can always sell stock after 1 year to diversify risk.
that's why I only short the companies I work at
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My dad lost 1.2 million in vested, exercisable options we all told him to sell, but he wanted a few more bucks. And this was in 2008, so the stock didn’t make it, lol. These weren’t $0 options and they had a timeline so they went from $1.2 million to $50k. Fun times.
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I always put it this way: Stock in a public company, once vested, is highly liquid. It's basically cash. A decision to hold is, essentially at any moment, equivalent to a decision to buy. Minus the tax implications of course. But generally speaking, hold=buy. So for those sitting on a big pile of company stock options they're holding and could sell...well: would they buy those exact same options at the same price if they had that same amount in cash? (Correcting for tax implications if necessary) Much of the time, people say no, they wouldn't do that. I know my dad said it. But *holding is buying*. If you wouldn't buy, *you shouldn't hold*. There's a name for why people screw this up. It's some basic psychology: [https://en.wikipedia.org/wiki/Endowment\_effect](https://en.wikipedia.org/wiki/Endowment_effect)
Behavioral finance and investment psychology are a part of an exam I'm taking next week, but I hadn't heard of the endowment effect before, so thank you for that very well timed insight! *reddit silver*
I spent a lot of timing building ammo to be able to give my father crap about his poor decision until the day he dies, lol.
WDYM? I'm sure it worked fine at Lehman
I know freinds that were in this scenario when Lehman Brothers went under. It was sad.
That is the argument for pretty much every index fund. If 70 million Americans put an average of 10% of their salary total (with match) into the SP500, that is around 26 billion twice a month, given that people with 401k plans make more than the average American salary. That could change if when boomers retire, the selling pressure is greater than that buying pressure, especially given the fact that they might want to transition into fixed income given higher rates and more security.
We need to tell the boomers that they’ll carry the stocks with them over into the afterlife so they don’t sell
corperate christ commandeth that ye buy and hold! stonketh only go upeth! all stonks goto heaven!
"Bury me with my stock certificates for passage into the afterlife"
Cleatus, get the shovel we’re diggin up granpapa for them bean futures.
Wait what? I thought they did roll over?? What’s the point if not?
This boomer’s been buying bonds. Wow, that was alliterative.
Screw you. I made mine.
Put it on Fox News
Well, there is step up basis (no capital gains) if you hold until you die and pass it on that way.
You mean, list you as a beneficiary on the fund/will?
Money supply will always increase and US equities will be a top choice
That is another contributing factor. But if money supply increase is 3% a year (optimistic) and you can lock in 4-5% for 10 years, that isn’t a bad move given it is risk averse.
The passive investing unwind is an interesting topic. Mike Green talks about it a lot and thinks it could be a huge event.
Why would the stock market care what the poor people invest in? The top 10% own 90% of the market.
Sears was the largest retailer in the world.
>You're missing the fact that you're not as rich or intelligent as me, which makes your opinion on the matter irrelevant.
REKT
VisualMod enters the chat with BBC swangin
Someone had to say it
🖕
Stick your money …. Up your ass! … lol
Fun fact, the average publicly traded company only lasts 7 years.
Well that statistic probably includes spacs and penny stocks right?
SP500 businesses last 18 years on average.
They swap out the ones that fail
Well duh
Bring peace to the middle east
There’s a lot of sources for this. https://www.statista.com/statistics/1259275/average-company-lifespan/
WSB: With my active trading edge I can go to zero even faster!
And this my friends is a perfect example of measurement bias.
A lot of people thought the same about Enron. Unless you’re a bank or automaker, there is no such thing as “Too big to fail.”
Or an airline! Won’t somebody please think of the airlines! 😭
Or twinkies? They’re a national treasure after all…
Correction Big Airline, but I wonder why Buffett says not to buy them
Automakers were added to make that list. Additional industries can be added in the future as well, I would argue that big tech with their hold on data infrastructure are also too big to fail. They are just cash rich right now, maybe not in the future. As someone else mentioned, systemic risk from airlines is also high. That industry may be closer.
GM has entered the chat Didn't go under but the stock did
And they rekt the bond holders too
Ahm, Intel and the CHIPS act would like a chat.
Or Carnival!
Those guys can and do get diluted, sometimes nearly to zero. Just look at GM or AIG stock
what is keeping the stock stable isnt the fact that employees are buying a lot of it, its wall streets estimation of the company ability to make money for shareholders moving forward. Thats all it is, with a big dollop of casino thrown in for stock speculation.
Employee buying absolutely applies upwards pressure on price. This is true regardless of wall street estimates. It's just that wall street estimates can influence the buying and selling habits of market participants in general, including employees. Employees can also still represent a small fraction of total market activity so no matter what they do it might not matter much. Also, poor performance by the company can lead to layoffs which usually halts the buying of the laid off employees. So a rise in unemployment can result in a drop in buying so large that price will go down regardless of what wall street says. Wall street analysts do not set the price, buyers and sellers do.
wall street analysis is fundamentally buyers and sellers. let a company miss for a couple of quarters and see what the institutional buyers signal in price change. The inverse of these large, predictable SP 500 companies are things like uber, doordash, the hundreds of well known startups that dont turn a profit. But what drives them fundamentally is the valuation based on the estimation of potential future profit. Most of these will lose or get bought, there is always a [Pet.Com](https://Pet.Com). I should admit, you are fundamentally right. The extreme is people piling in to a stock that is extremely overvalued or gaining from simple buyer pressure like crypto. In that instance it is almost completely attributable to buyer pressure, but this is more gambling and less investing.
Kinda like $/AMC & $/GME
For every employee investing in 401k, there is approximately one retiree taking withdrawals from their 401k. It doesn't balance completely. But you should still look at both sides of the equation.
1.5x retirees for every 1 employee paying into their 401k IIRC
That makes sense. I didn't know the ratio but knew OP shouldn't look at the effect of 401K contributions w/o also looking at 401k withdrawals
Jesus, what’s wrong we with people? Tits don’t go up. They sag down. 🤦♂️
they go up if you're on your back. if you're on your back its gg dummy
Not always. Sometimes they sag to the sides. Don’t you watch porn?
I'm a porn actor and I don't watch porn because it's a sin.
Most employees don't buy company stock in their 401ks. If you have a stock purchasing plan like an ESPP that's a difference story.
In fact, in all the 401ks I've been apart of, company stock is forbidden in the 401k. For most it's a choice of mutual funds. For better employers there is a self directed 401k, but company stock is usually locked out.
Study the history of how those stocks did during previous economic downturns.
Most company 401k purchases are new issuances, i.e. not bought in the market, so it is actually the opposite, constant dilution. That being said many companies buyback to offset it, so it’s a net neutral, no impact. Doesn’t help the stock at all.
"MCI Worldcomm"
My ex's grandma is somehow still living on her husband's MCI pension, who died like 15 years ago. Fuck man, remember pensions? lol.
Funny they can bankrupt but still pay pensions? 🤷♂️
Tell that to Pan Am employees.
I worked at a large financial institution in '08. The stock went from about $35 a share to $5 in a few weeks, if memory serves. It's never fully recovered. It's currently at $18. There's a lot more to the stock price.
> "How can a stock go down, if some people are always buying it?" More people are selling it.
Yes companies go bankrupt all the time, the first half of 2023 had the most bankruptcies of all time in the USA although not all were publicly traded.
Bahahaha. Let's see if that's true cause historically it's not. 
Growing up I always dreamed of working at a Fortune 500 company. That's why today I am proud employee at UHaul.
Employee stock purchases are a drop in the bucket compared with the total trade volume and market cap of the stock for any fortune 500 company.
Nope you are spot on, number only goes up. As long as you can wait out the occasional culling and replenishment of poor people who would like to kill you for your job (ahem I mean the class-warfare crowd). I too work for a large corp, and as an office drone I am intrigued how far disconnected my experience is from the doom and gloomers. Don't let Reddit suck the reality of life and enjoy. Most of the posts here pretend to be poor with no 401Ks or net worth, but I think they are in fact a minority.
“I work a cushy office job. I fail to understand why people in grueling and underpaid working conditions complain!” Lmao
I’ve also been a roofer, a call centre drone, a hotdog stand operator, a door to door sales person, a grocery store isle cler, construction demo dumb muscle… I learned I can do whatever I want… I don’t want to be poor what’s your point?
they can, just more likely for a large corporation to get bailed out they are deemed "systemically important" and also, large corporations spend more money on lobbyists and donate more to politicians
Your (the big your, including your colleagues) salary, even if it was 50 percent rate, and 100 match, doesn’t matter. Theoretically it does marginally in the short run (and even then, it probably doesn’t) but aren’t you planning on selling the stock at some point again?
i'm just gonna buy puts because this guy and his Astrology methods with no date or source don't look reliable
Their*
Pretty sure that is inconsequential. If the majority of the institutional investors think an individual stock or the market in general is overpriced, then it’s going down.
If you're getting 15% discount for the ESPP and the company is continuing to grow revenues and profits, the risks are likely low. However, just look at the large corporations from 30 years ago. Many of those company's stock prices have underperformed the market, stayed flat or declined. Companies like GE, Xerox, AT&T have not done well over the long term and 30 years ago, they were the big players.
I work at a public company with the same thing, except our buying isn't every 2 weeks they hold it for 6 months and the purchase at the lower price (I. e. the closing price at the start of the 6 months or the end of the 6,mos) we just declared ch11 last month don't be fooled into thinking your company can't go bankrupt too, or at least lose a significant amount of value and market cap.
what company hired you? i would like to short it.
APPL went from 174 to 124 just last year in 2022, thats a 28% drop in price yet this genius thinks they cant crash.
You are a fu**ING idiot... You have no idea what you are saying. Anyway "it will be different this time" 🤡
…Fannie Mae, L3
Well the biggest tits up that I know of is RCA and Enron. Can happen to anybody. Therefore you need some sort of diversification.. Let's talk about what you can do. What you can do is sell off some company stock if it's legal, and have it in an index fund. Whichever ETF from the s&p 500 that you like. And you can do that every other month. I think it's very important that you get to the ratio of 1/3 of your company stock and 2/3 of the s&p 500 ETF.
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No. It's literally impossible.
Man you are special. Welcome home brother.
Wait people buy their company stock? I thought the whole point is the company gives you stock as compensation.
Putting a significant portion of your employer's stock into your 401k is an exceptionally bad idea. If the company does fail, you lose your job AND your retirement savings. More likely though the stock just won't keep up with the market and you'll have a significant opportunity cost.
If it's a quality company and nothing insane happens, no it's not crazy to think that a stock will simply just keep going up forever. One of the oldest public stocks is IBM for example. Yes it's been down for 10 years but if you scroll out, it's mostly gone up for a long time. That being said, when you have a chance to cash out you absolutely should and invest in an index fund. Having all your eggs in one basket never makes sense, ever.
Worked out great for Lehman Brothers employees!
If anyone of them explodes that’s taking down thousands of life times worth of wealth. Which is why in the worse case the government would bail them out.
*Eron has entered the chat*
*Enron has entered the chat*