1,387 Enrons?
from Investors Business Daily
May 2002
Enron's holders weren't the only losers. IBD files show that there are 1,387 companies that lost 90% or more from their five-year highs.
Does that mean Congress should start holding hearings, with cameras rolling, to get some answers? Should the Justice Department start whipping up subpoenas for all the manager of those public companies? Should officials start demanding explanations for the 1.49 million bankrupcies in 2001?
After all, of the 1,387, there were some stellar stocks where holders took a beating. Marketing Services Group once fetched $360. It's now at $0.99. Online search engine Ask Jeeves once fetched $190.50 a share. Now it trades at $1.64. Investors in these and the other 1,385 lost all or nearly all in this bear market.
But don't call for the process servers just yet. These losses are the product of one of the most severe bear markets in our history. The drop in the NASDAQ since March 2000 rivaled the collapse of the Dow in 1929-1930. Whether the losses come from shaky accounting, fraud, or just the bear, they are just as devastating.
Rather than at government, then, investors need to look inward and take responsibility for their trades.
During the late-1990s bull market, everyone focused on the buy side. The sky was the limit. Brokerages pumped up every firm that even sniffed of tech. Many in the financial media, especially TV, were almost gleeful in their reportage of the gains to be made by buying - even after the bear started.
And little thought was given to the essential other side of the transaction: the sell side. Exit strategy was not a phrase heard too often - except by IBD readers perhaps.
So the quickest way for individuals to avoid Enron-sized losses? Sell. |
