Re: Sotck Options
mInvestor
5/29/2011 10:36:29 PM
Taking emotion out of equation is the key. Well, it's why we shall pay attention to Behavior analysis, isn't it?
Good insight on this series discussion.
Re: Sotck Options
ProfR
5/29/2011 3:34:14 PM
I agree that you need to be careful when you hold stock in the company you work for and that you do not get too emotional about that. I think it is a good idea to make sure your financial advisor knows how much stock or options you have in the company you work for and helps with how much you should keep or sell. That should take some emotion out of those decisions.
Re: Stock Options
mInvestor
5/27/2011 9:15:13 AM
Great point. Employee shall emotionally detach from his feelings while they make any investment decisions. Lots of other examples, such as Nortel. A company has a wonderful 100 years history. Well, lots of employees didn't make exit decision in time. I also make a similar mistake once. Hopefully we don't do that again.
Re: 20% loss is not that scarry
mInvestor
5/27/2011 9:11:09 AM
You are right, Value Hiker. Thank you for pointing out this. The employee moral and working environment are two important factors. Learned something and getting a little better every day, hehehe...
Its very easy for employees to get emotionally attached to stock options and stock purchase incentives viewing them differently than their other investments. It is critical for an employee to understand that these are just like any other investment and they should make their decisions based on the fundamentals of risk and diversification. Remember Enron employees and their blind faith in the company?
Re: 20% loss is not that scarry
Value Hiker
5/27/2011 1:59:26 AM
There are two kinds of information that employee can have.
Some are short term like current quarter earning, merge or buyout. If employee made trade on these non public information, they are inside trader. But these kind of information are rarely available to regular
employee unless you are at VP or above level.
Other information are more helpful to long term investor, like industry trend, competition pressure, employee morale, management talence etc, which are usually public available information, but unless you work for the company, it is hard to detect it in detail. That is the information that Philip Fisher recommends long term investor to check. Any careful employee can detect these information far earlier than wall street
experts. That is the edge I talked about and it has nothing to do with inside trading.
Re: 20% loss is not that scarry
mInvestor
5/26/2011 10:43:16 PM
Well, that sounds like an inside trader, not a normal employee. A normal employee doesn't always have previligy to get all info. They still need to do their own research. I am not mouth for financial advisors, I don't think they know any better. But anyone shall do their own research for the investment.
Exactly, unless you are clairvoyant, don't venture into territory that you normally wouldn't. Investors should not let greed take over, and end up paying the price at the end.
Re: 20% loss is not that scarry
Value Hiker
5/25/2011 3:13:47 PM
It all depends on which company you work for. If you worked for Cisco at early 1990s, or Google at early 2000s, do you really want to sell your cisco or google stock to diversify into 3com or Yahoo? On the contrary, if you work for 3Com or Yahoo at the same time frame, you know your company is beat down by Cisco and Google, you shall sell your shares and diversify into Cisco or Google, at least to SPY.
Most of time, LONG TIME employees know their company well, and can predict the company's success or failure much better than Wall Street Analysts. Why shall these employee listen to the financial advisor who know barely nothing about their company ?
If you are new to the company, or the kind of employee who know nothing about his company's business environment, major competitors, new product in developing, etc, then you don't have any edge over your financial advisor, please listen to financial advisor's opinion, go diversify.
Stop This Stock...I Wanna Get Off!
Street Smart
5/25/2011 2:59:17 PM
An investor who works for a company where he receives stock dividends needs to be especially careful about more than just diversification. Timing is a real factor to consider, too, because he or she may be restricted as to when options can be exercised, when stock can be sold, etc.
There is also the concern about not so much literal inside information but company loyalty affecting one's investment judgment. Overall, it's tough to apply the same standards of objectivity to such an investment, and that makes having good counsel and overall diversification of portfolio risk all the more important.
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