Small investors plan patriotic trades
99 percent say they won't sell despite expected drop
By Deborah Adamson, CBS.MarketWatch.com
Last Update: 2:40 PM ET Sept. 13, 2001
LOS ANGELES (CBS.MW) -- Patriotic American investors say they'll fight terrorism when the stock markets open by vowing not to sell stocks and even buying more.
Despite widespread expectations that the markets will slide when they first open, a growing number of investors on Internet message boards are vowing to hold and buy stocks to keep prices high and thwart the terrorists' efforts to hurt American markets.
"Terrorists want us to crash. No selling! Long USA." wrote an investor called "Neckbreaker2000" on an Internet message board.
"Don't short. No shorting. Do what's right," opined another.
"I will not short it. I can't in good conscience profit off betting against my nation. I will take the portfolio hit if necessary, but sleep at night."
"Detu10yr"Investor
"I will not short it. I can't in good conscience profit off betting against my nation," wrote "Detu10yr" in another post. "I will take the portfolio hit if necessary, but sleep at night."
They're not alone.
In a survey of more than 4,600 investors released Thursday, 99 percent said they would not sell the stocks they currently own in light of the tragic events in New York and Washington, according to Harris Interactive, a market research and consulting firm.
They plan to hold on despite the fact that 65 percent believe the stock market will drop by either a little or a lot over the next few weeks, the survey found. Slightly more than half think stocks will be a "worse" investment than other securities over the next few months.
Dan Hucko, a Harris spokesman, said the dichotomy shows how strongly many people were affected.
"They expect stocks to drop (but) they were not going to sell individual stocks," he said. "Investors are resilient. They feel we're going to get through this. We won't change our investment habits."
Charles Schwab, founder of the brokerage firm bearing his name (SCH: news, chart, profile), sent a note to clients urging a calm head.
"Successful investing must be based on more than pure emotion," his letter said. "We can say with certainty that the extraordinary and tragic events of Tuesday won't dictate market behavior over the long term. Downturns set the stage for rebounds."
He noted that after the invasion of Kuwait in 1990, the market declined for almost three months but rebounded with a 30 percent return in the following year. During the Cuban missile crisis in October 1962, the market sold off briefly but recovered fully in only a few weeks. After the attack on Pearl Harbor in October 1941, the market dropped for about four months but recovered 10 months later.
What investors say they plan to do
"As someone who trades stocks, I have been racking my brain to come up with a stock trader's response to yesterday's tragedy that will be of some use," wrote "Aloysiusf" in a message board.
Describing himself as a "modest man with a family" who's not looking to be a "hero nor a martyr," the trader said he will commit $2,500 of the $7,000 in his trading account to buying stocks.
"The reason that I will risk my cash is to show the terrorists that American financial buildings may crumble, but Americans don't. If I lose my money, I will consider it a gift to those who have died." If there's a profit, he said, he'll donate it to the Red Cross.
One man, with the handle "Moses_at_intel," said he'd cover his small short position when the markets reopen. By doing so, he curtails any profits he might be making in a market decline.
"Buy stocks for America!!!" screamed another post, by "The_Prophet_of_Profits." "I'm buying at the open. I don't care if I lose everything. This is not about money!!! When the Naz and the Dow close in the green, it will send a message that America is strong and will survive. Don't let the terrorists win!!!"
Another investor urged others to hold their equity positions but cash out their CDs and money market accounts to "buy on the dips."
There were even efforts to start a grassroots campaign for each individual investor to buy stocks.
Logan Darrow, publisher of American Venture magazine, advocates that everyone buy 100 shares of stock and hold it. In what he calls the "Great American Stock Revival," Darrow wrote that it would show the terrorists their attack "failed to destroy America." |
