Carolyn, why you needn't feel sorry for Enron employees...this from a post at GWBush board:
"One of the most common lies about the 401K collapse is that the stock went from $90 to pennies DURING the time that the 401K plan was frozen. The truth is that the 401K plan was frozen for a very short time indeed. A few facts: In February of 2001, in order to improve its 401K plan, Enron requested proposals from third-party benefits firms to take over administration of its plan.
After selecting a new 401K administrator, Enron notified all affected employees in a mailing to their homes on October 4, stating that a transition period would begin on October 29. Between the first notification and the first day of the transition period, the company sent several reminders to employees over the internal e-mail system.
The transition period during which employees were unable to change investments in their 401K accounts lasted just 10 total trading days, beginning on October 29 and ending on November 12, 2001. The transition applied to all plan participants, including senior executives.
From October 29, the first day of the temporary shutdown, through November 13, the first day participants could transfer funds, the Enron share price went from $13.81 to $9.98, a drop of $3.83. On five of those trading days, Enron’s share price closed below $9.98.
Outside of the brief transition period, Enron employees have always been able to transfer their own contributions in the 401K, at any time. They have 20 investment options to choose from, Enron stock being one of them.
Now, how does that square with what you have been hearing? Again, look at the chart. Notice how long the stock price has been falling before you fall for some of the sob stories you keep hearing in the Media.
Now, many of you have heard that Ken Lay sent a memo stating that things were good at Enron. This is tricky, but listen up. What Lay did, what express confidence in the Enron BUSINESS PLAN. There was NOTHING in the memo about profitability, nothing about earnings, nothing about stability, it was just a statement of basic belief in their IDEA, nothing else.
Now, most decent investors run for the hills from statements like that memo, because I business that is doing well DOESN'T need to express confidence, its all over the balance sheet. I celebrated the memo as proof that my short selling was a good idea.
These are the kind of confidence statements that you heard from companies like Webvan, Lucent, Compaq, HP and others that were doing badly in the marketplace.
In the case of Enron, I would suspect it was a statement necessary for a company trying to secure additional lines of credit. Ever hear Microsoft come out and say: “Hey things are just great!” except for earnings reporting periods? They don't have to. Profit speaks for itself.
This leads to the next point; PROFIT.
For a company with the supposed earnings of an ENRON, where were the profits? We all know the story of Amazon.com, for whom profits are rare as sunshine in Seattle, but why didn't all these investors see that in light of all the supposed earnings, there were TONS of reasons to dump the stock. Here is a chronological order of significant events from an Enron Powerpoint presentation:
Ok, now, does anyone see any reasons to sell the stock since February; or at the very least a reason to start paying attention?
This is not going to be a lesson on investing. It is to point out that a number of significant public knowledge events occurred last year that could have shown ANYONE with an ounce of sense, that Enron was a dog, and dropping like flies. Now; I realize that stock analysts were still talking up the stock, and for that they should be shot, because any fool could have seen from the charts, the footnotes, the EVENTS and the trend, that it was time to get out.
Every Enron employee had the opportunity to get out and those who didn't are silly, stupid, greedy, or too naïve to be investing in the first place. They would like you to believe that they lost ALL their money during the 401K freeze but that just is NOT TRUE, in any way shape or form. So, why do you keep hearing it?
BECAUSE IT SOUNDS GOOD. The message is geared to illicit the maximum amount of sympathy from YOU. This will help their Class Action Lawsuits, poisoning the Jury pools to the truth, it will help Congress consider a bailout, based on lies and deceit; using YOUR tax money to pay for the ineptitude of others; instead of letting these people learn their lessons."
Message 16904085 |
