Saturday, May 8, 2010

I understand how bookies work... not legalized gambling

So… during Thursday's nose dive of the stock market one companies stock, apparently because of computer error, fell dramatically.

“For individual stocks, the drops were mindboggling. Procter & Gamble tumbled from $61 to $48. It closed at $60.75. At least for a short time, Accenture plummeted from $41.50 to 1 cent — meaning someone was forced to sell for $0.01. The buyer was more fortunate, because Accenture closed at $41.09.

Note the Accenture piece of this… Accenture went to as low as $.01 penny a share. So if you had bought $500 dollars worth at a penny a share, you would have had 500 x 100 shares or 50,000 shares. Friday morning that stock was worth $41.09, so for your $500 investment you would have had $2,054,500. Just imagine for a moment if you had done $5K instead of $500, or were feeling really wacky and rolled over the entire $100K in the 401K plan… ah to dream… BUT

Is this a tale of opportunity lost? Or is this a tale about how most Americans are banking their entire future by investing in mutual funds and stocks… oblivious to the fact that crazy ass stuff like this can happen at any moment and the experts have absolutely no idea what happened?

Ultimately, I think there is a lot of bullshit in these two books, but at their core, I think, is brilliance. Poor Dad did what he was supposed to and stayed vested and had mutual funds and Ferris is absolutely right, most of us do the same and live a deferred life...

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