A great example of single stock risk

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Topic Author
germark
Posts: 70
Joined: Thu Sep 06, 2018 2:18 pm

A great example of single stock risk

Post by germark »

Today I saw an article that PG&E stock price went down sharply due to a potential development in its bankruptcy proceeding.

3 years ago the stock was at $60
1 year ago it was at $47
Now it's at $8

Times like this I'm glad that I only invest index funds. I can easily imagine an individual investor buying PG&E because it is supposedly a "safe utility company".

For me I would gladly lose out on potential gains to avoid having a substantial amount of my assets in a catastrophic failure like this.
Jack FFR1846
Posts: 13106
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: A great example of single stock risk

Post by Jack FFR1846 »

Polaroid.
Bogle: Smart Beta is stupid
J295
Posts: 2800
Joined: Sun Jan 01, 2012 11:40 pm

Re: A great example of single stock risk

Post by J295 »

Apple
Google
Microsoft
Amazon
dbr
Posts: 34329
Joined: Sun Mar 04, 2007 9:50 am

Re: A great example of single stock risk

Post by dbr »

J295 wrote: Thu Oct 10, 2019 12:21 pm Apple
Google
Microsoft
Amazon
Yep, risk is upside as well as downside. It can be very rewarding or brutally punishing.
jeff1949
Posts: 823
Joined: Mon Mar 05, 2007 10:43 am
Location: Salem, OR

Re: A great example of single stock risk

Post by jeff1949 »

Enron
User avatar
MN-Investor
Posts: 467
Joined: Mon May 02, 2011 9:04 am
Location: Twin Cities

Re: A great example of single stock risk

Post by MN-Investor »

At the end of 2013 Linn Energy was 13% of our portfolio. In Dec 2013 we decided to get out of the majority of the single stocks we owned and adopt a more Boglehead philosophy for our investments. We sold our Linn Energy for $30.89/share. One year later it was trading at about $10/share. They declared bankruptcy in 2016. Thank you Bogleheads for advocating low expense ratio index funds!
The key to success - Save early, save often, invest well.
bgf
Posts: 1534
Joined: Fri Nov 10, 2017 9:35 am

Re: A great example of single stock risk

Post by bgf »

dbr wrote: Thu Oct 10, 2019 12:24 pm
J295 wrote: Thu Oct 10, 2019 12:21 pm Apple
Google
Microsoft
Amazon
Yep, risk is upside as well as downside. It can be very rewarding or brutally punishing.
true. and it can be many times more rewarding than punishing. You can't lose more than you put into PGE, but you made a lot more than what you put in to apple, google, microsoft, and amazon. its just that few people can hold on for that long through that much volatility.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
columbia
Posts: 3023
Joined: Tue Aug 27, 2013 5:30 am

Re: A great example of single stock risk

Post by columbia »

Until things dramatically change: any Chinese stock.
fposte
Posts: 1792
Joined: Mon Sep 02, 2013 1:32 pm

Re: A great example of single stock risk

Post by fposte »

GTAT. People posted as they lost their life savings.

Edit: deleted link, because apparently the Contrarian Investor forum is no more. Dunno whether that's a comment on Contrarian Investing.
StandingRock
Posts: 344
Joined: Sat Feb 02, 2019 6:54 pm

Re: A great example of single stock risk

Post by StandingRock »

I don't know that I have ever heard or seen any advice saying to invest in only one stock.
dbr
Posts: 34329
Joined: Sun Mar 04, 2007 9:50 am

Re: A great example of single stock risk

Post by dbr »

StandingRock wrote: Thu Oct 10, 2019 1:35 pm I don't know that I have ever heard or seen any advice saying to invest in only one stock.
Not invest in nothing but one stock, but employee stock purchase plans and management stock option/RSU plans implicitly urge people to invest significantly in only one stock. Most employers don't suggest that it is mandatory advice to bail as soon as possible from these investments.

Enron, of course, is the poster child for the possible disaster lurking in such situations. Elsewhere there are employees who have done very well indeed piling away stock in their employer.
User avatar
JoeRetire
Posts: 6684
Joined: Tue Jan 16, 2018 2:44 pm

Re: A great example of single stock risk

Post by JoeRetire »

germark wrote: Thu Oct 10, 2019 12:12 pmTimes like this I'm glad that I only invest index funds. I can easily imagine an individual investor buying PG&E because it is supposedly a "safe utility company".
Yup. They're all safe, until they aren't.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
User avatar
anon_investor
Posts: 4526
Joined: Mon Jun 03, 2019 1:43 pm

Re: A great example of single stock risk

Post by anon_investor »

jeff1949 wrote: Thu Oct 10, 2019 12:30 pmEnron
This is the reason you do not have your employer stock as you sole 401k investment... apparently many Enron employees did...
fanmail
Posts: 422
Joined: Thu Sep 20, 2012 5:54 pm

Re: A great example of single stock risk

Post by fanmail »

General Electric
BH+
Posts: 103
Joined: Sat Aug 31, 2019 5:15 pm

Re: A great example of single stock risk

Post by BH+ »

Valeant
marcopolo
Posts: 3880
Joined: Sat Dec 03, 2016 10:22 am

Re: A great example of single stock risk

Post by marcopolo »

dbr wrote: Thu Oct 10, 2019 12:24 pm
J295 wrote: Thu Oct 10, 2019 12:21 pm :beer
Apple
Google
Microsoft
Amazon
Yep, risk is upside as well as downside. It can be very rewarding or brutally punishing.
Oh. I thought maybe he was predicting these stocks would be the next to crash and burn...
Once in a while you get shown the light, in the strangest of places if you look at it right.
barnaclebob
Posts: 4340
Joined: Thu Aug 09, 2012 10:54 am

Re: A great example of single stock risk

Post by barnaclebob »

fposte wrote: Thu Oct 10, 2019 1:31 pm GTAT. People posted as they lost their life savings.

Edit: deleted link, because apparently the Contrarian Investor forum is no more. Dunno whether that's a comment on Contrarian Investing.
That thread on the contrarian investor was quite a read. Heres a news article on the developments since then:

https://www.nhbr.com/ex-gtat-ceo-settle ... pple-mess/

Seems like a similar pattern to Theranos. Over promise, then dig a deeper hole when it all starts to unravel. My jaw hit the floor during the Theranos documentary when they revealed their magical blood analysis box was a hugely complex mechanical device. Up until then I assumed it was some sort of spectroscopy analysis vs a mini version of a hundreds of independent and complicated blood lab processes.
Mr.BB
Posts: 1505
Joined: Sun May 08, 2016 10:10 am

Re: A great example of single stock risk

Post by Mr.BB »

dbr wrote: Thu Oct 10, 2019 2:30 pm
StandingRock wrote: Thu Oct 10, 2019 1:35 pm I don't know that I have ever heard or seen any advice saying to invest in only one stock.
Not invest in nothing but one stock, but employee stock purchase plans and management stock option/RSU plans implicitly urge people to invest significantly in only one stock. Most employers don't suggest that it is mandatory advice to bail as soon as possible from these investments.

Enron, of course, is the poster child for the possible disaster lurking in such situations. Elsewhere there are employees who have done very well indeed piling away stock in their employer.
I know someone who worked at Enron many years before the collapse. Had about $400,000 in company stock at the peak. Held onto it to the end. Eventually they said they received a final check for about $235.00 :oops:
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
MotoTrojan
Posts: 10741
Joined: Wed Feb 01, 2017 8:39 pm

Re: A great example of single stock risk

Post by MotoTrojan »

fposte wrote: Thu Oct 10, 2019 1:31 pm GTAT. People posted as they lost their life savings.

Edit: deleted link, because apparently the Contrarian Investor forum is no more. Dunno whether that's a comment on Contrarian Investing.
If that’s the thread I’m thinking of, it was truly sobering to read.
User avatar
dkdoy
Posts: 546
Joined: Sat Jun 13, 2009 11:07 am
Location: Oregon

Re: A great example of single stock risk

Post by dkdoy »

Mallinckrodt
rossington
Posts: 810
Joined: Fri Jun 07, 2019 2:00 am
Location: Florida

Re: A great example of single stock risk

Post by rossington »

To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
IowaFarmWife
Posts: 256
Joined: Thu Nov 02, 2017 9:42 pm

Re: A great example of single stock risk

Post by IowaFarmWife »

Gateway Computers
“The quickest way to double your money is to fold it in half and put it in your back pocket.” —Will Rogers
User avatar
retired@50
Posts: 4191
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: A great example of single stock risk

Post by retired@50 »

rossington wrote: Thu Oct 10, 2019 4:48 pm To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
Someone (or a group of individuals) owns the stock. Your statement about "anyone who invests in utilities would never go near PGE" has to be false, doesn't it? Regards,
This is one person's opinion. Nothing more.
jeff1949
Posts: 823
Joined: Mon Mar 05, 2007 10:43 am
Location: Salem, OR

Re: A great example of single stock risk

Post by jeff1949 »

Mr.BB wrote: Thu Oct 10, 2019 4:42 pm
dbr wrote: Thu Oct 10, 2019 2:30 pm
StandingRock wrote: Thu Oct 10, 2019 1:35 pm I don't know that I have ever heard or seen any advice saying to invest in only one stock.
Not invest in nothing but one stock, but employee stock purchase plans and management stock option/RSU plans implicitly urge people to invest significantly in only one stock. Most employers don't suggest that it is mandatory advice to bail as soon as possible from these investments.

Enron, of course, is the poster child for the possible disaster lurking in such situations. Elsewhere there are employees who have done very well indeed piling away stock in their employer.
I know someone who worked at Enron many years before the collapse. Had about $400,000 in company stock at the peak. Held onto it to the end. Eventually they said they received a final check for about $235.00 :oops:
He did much better than I did. Had about $125k at one time and they sent me a check for exactly one penny. I haven't cashed yet. :twisted:
rossington
Posts: 810
Joined: Fri Jun 07, 2019 2:00 am
Location: Florida

Re: A great example of single stock risk

Post by rossington »

retired@50 wrote: Thu Oct 10, 2019 5:25 pm
rossington wrote: Thu Oct 10, 2019 4:48 pm To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
Someone (or a group of individuals) owns the stock. Your statement about "anyone who invests in utilities would never go near PGE" has to be false, doesn't it? Regards,
The point is the company has not been a good investment for anyone's hard earned money for a very long time. Much better utilities elsewhere.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
mtmingus
Posts: 463
Joined: Sun Jan 07, 2018 4:15 pm

Re: A great example of single stock risk

Post by mtmingus »

Nektar Therapeutics
McDougal
Posts: 227
Joined: Tue Feb 27, 2018 3:42 pm

Re: A great example of single stock risk

Post by McDougal »

CMGI...
Tanelorn
Posts: 1806
Joined: Thu May 01, 2014 9:35 pm

Re: A great example of single stock risk

Post by Tanelorn »

rossington wrote: Thu Oct 10, 2019 4:48 pm To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
Right. I mean, you’ve got to really not be paying attention not to know PCG has been in bankruptcy all year, getting sued for billions for the deadly wildfires over the last few years, etc. there was plenty of time to sell at $20 instead of $7-8 recently, and there may be again if the company’s bankrupt plan is accepted over the rival creditors one (which the judge just allowed to be considered, prompting this selloff). The company’s plan, as far as I vaguely understand it, consists of hoping for a bailout and stiffing the victims legal fund in order to prop up the stock price for the executives.
jrbdmb
Posts: 611
Joined: Tue Oct 06, 2015 4:27 pm

Re: A great example of single stock risk

Post by jrbdmb »

dbr wrote: Thu Oct 10, 2019 2:30 pm
StandingRock wrote: Thu Oct 10, 2019 1:35 pm I don't know that I have ever heard or seen any advice saying to invest in only one stock.
Not invest in nothing but one stock, but employee stock purchase plans and management stock option/RSU plans implicitly urge people to invest significantly in only one stock. Most employers don't suggest that it is mandatory advice to bail as soon as possible from these investments.

Enron, of course, is the poster child for the possible disaster lurking in such situations. Elsewhere there are employees who have done very well indeed piling away stock in their employer.
My previous employer prohibited moving any money out of the company stock until you reached age 55. Since all matching 401K funds were paid in company stock, it wasn't hard to end up with a 401K portfolio with 50% company stock.

Thankfully those rules were changed after the Enron debacle.
dbr
Posts: 34329
Joined: Sun Mar 04, 2007 9:50 am

Re: A great example of single stock risk

Post by dbr »

jrbdmb wrote: Fri Oct 11, 2019 8:07 am
dbr wrote: Thu Oct 10, 2019 2:30 pm
StandingRock wrote: Thu Oct 10, 2019 1:35 pm I don't know that I have ever heard or seen any advice saying to invest in only one stock.
Not invest in nothing but one stock, but employee stock purchase plans and management stock option/RSU plans implicitly urge people to invest significantly in only one stock. Most employers don't suggest that it is mandatory advice to bail as soon as possible from these investments.

Enron, of course, is the poster child for the possible disaster lurking in such situations. Elsewhere there are employees who have done very well indeed piling away stock in their employer.
My previous employer prohibited moving any money out of the company stock until you reached age 55. Since all matching 401K funds were paid in company stock, it wasn't hard to end up with a 401K portfolio with 50% company stock.

Thankfully those rules were changed after the Enron debacle.
Yes, my company originally had the same rule and changed it. Fortunately that company was and is successful enough that many retirees with lifetimes of company contributions and masses of ESOP purchases over the years have lived handsomely on their portfolios. But it is only luck that stands between them and the poorhouse.
jrbdmb
Posts: 611
Joined: Tue Oct 06, 2015 4:27 pm

Re: A great example of single stock risk

Post by jrbdmb »

Tanelorn wrote: Fri Oct 11, 2019 7:17 am
rossington wrote: Thu Oct 10, 2019 4:48 pm To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
Right. I mean, you’ve got to really not be paying attention not to know PCG has been in bankruptcy all year, getting sued for billions for the deadly wildfires over the last few years, etc. there was plenty of time to sell at $20 instead of $7-8 recently, and there may be again if the company’s bankrupt plan is accepted over the rival creditors one (which the judge just allowed to be considered, prompting this selloff). The company’s plan, as far as I vaguely understand it, consists of hoping for a bailout and stiffing the victims legal fund in order to prop up the stock price for the executives.
If this is all true and "well-known" why isn't PG&E already a penny stock? Enron, Valeant, and many others were also great stocks until they weren't.
User avatar
cheese_breath
Posts: 10093
Joined: Wed Sep 14, 2011 7:08 pm

Re: A great example of single stock risk

Post by cheese_breath »

General Motors
WorldCom
Global Crossing
The surest way to know the future is when it becomes the past.
singledigit12b
Posts: 12
Joined: Tue Feb 17, 2015 9:56 pm

Re: A great example of single stock risk

Post by singledigit12b »

jrbdmb wrote: Fri Oct 11, 2019 8:07 am
dbr wrote: Thu Oct 10, 2019 2:30 pm
StandingRock wrote: Thu Oct 10, 2019 1:35 pm I don't know that I have ever heard or seen any advice saying to invest in only one stock.
Not invest in nothing but one stock, but employee stock purchase plans and management stock option/RSU plans implicitly urge people to invest significantly in only one stock. Most employers don't suggest that it is mandatory advice to bail as soon as possible from these investments.

Enron, of course, is the poster child for the possible disaster lurking in such situations. Elsewhere there are employees who have done very well indeed piling away stock in their employer.
My previous employer prohibited moving any money out of the company stock until you reached age 55. Since all matching 401K funds were paid in company stock, it wasn't hard to end up with a 401K portfolio with 50% company stock.

Thankfully those rules were changed after the Enron debacle.

Before I retired my company ESOP was 70% of my NW. Was only permitted to sell 25% at age 55 while still employed. When I retired the first order of business was to sell most of it. I still have too much (10% of NW) in the stock all in capital gains I will sell gradually.
RetiredArtist
Posts: 165
Joined: Wed Aug 26, 2015 4:38 pm

Re: A great example of single stock risk

Post by RetiredArtist »

If a single stock is a large part of your portfolio, wouldn't you follow it in the news?
PG&E had a big gas line explosion in San Bruno in 2010, due to incompetence if not greed. I think this was an early warning to shareholders. This article in today's Chronicle reviews PG&E problems. It does not mention that after the explosion & fire, there was no way to turn off the gas that was feeding the fires. They burned for hours.

https://www.sfchronicle.com/business/ar ... 512194.php

Being overweight in a single stock in a very poorly run company enhances risk.
fposte
Posts: 1792
Joined: Mon Sep 02, 2013 1:32 pm

Re: A great example of single stock risk

Post by fposte »

MotoTrojan wrote: Thu Oct 10, 2019 4:45 pm
fposte wrote: Thu Oct 10, 2019 1:31 pm GTAT. People posted as they lost their life savings.

Edit: deleted link, because apparently the Contrarian Investor forum is no more. Dunno whether that's a comment on Contrarian Investing.
If that’s the thread I’m thinking of, it was truly sobering to read.
I'm sure that's the one. It was chillingly memorable as the various members realized it was true that bankruptcy had been declared. There was one woman who had invested all her money for her disabled son's future with them and lost it all, because it seemed like a sure thing. (A corollary to single stock risk, perhaps, is a bubble all supporting the wisdom of single stock risk.)
rossington
Posts: 810
Joined: Fri Jun 07, 2019 2:00 am
Location: Florida

Re: A great example of single stock risk

Post by rossington »

jrbdmb wrote: Fri Oct 11, 2019 8:15 am
Tanelorn wrote: Fri Oct 11, 2019 7:17 am
rossington wrote: Thu Oct 10, 2019 4:48 pm To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
Right. I mean, you’ve got to really not be paying attention not to know PCG has been in bankruptcy all year, getting sued for billions for the deadly wildfires over the last few years, etc. there was plenty of time to sell at $20 instead of $7-8 recently, and there may be again if the company’s bankrupt plan is accepted over the rival creditors one (which the judge just allowed to be considered, prompting this selloff). The company’s plan, as far as I vaguely understand it, consists of hoping for a bailout and stiffing the victims legal fund in order to prop up the stock price for the executives.
If this is all true and "well-known" why isn't PG&E already a penny stock? Enron, Valeant, and many others were also great stocks until they weren't.
Because: "the company provides natural gas and electric service to approximately 16 million people throughout a 70,000-square-mile service area in northern and central California". As a state regulated Public Utility with an enormous customer base it is obvious they can't just cease operations...some people see value in that fact. But given the company's extremely problematic situation (they also filed for bankruptcy in 2001) it has been a very high risk utility from an investment standpoint for many years.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
User avatar
unclescrooge
Posts: 5515
Joined: Thu Jun 07, 2012 7:00 pm

Re: A great example of single stock risk

Post by unclescrooge »

fposte wrote: Thu Oct 10, 2019 1:31 pm GTAT. People posted as they lost their life savings.

Edit: deleted link, because apparently the Contrarian Investor forum is no more. Dunno whether that's a comment on Contrarian Investing.
Good one!
Carol88888
Posts: 382
Joined: Wed Jan 24, 2018 2:24 am

Re: A great example of single stock risk

Post by Carol88888 »

GE. Kodak JDS Uniphase Pets.com Sears J.C. Penney Worldcom
User avatar
Random Musings
Posts: 5890
Joined: Thu Feb 22, 2007 4:24 pm
Location: Pennsylvania

Re: A great example of single stock risk

Post by Random Musings »

I recall that a reasonably small percentage of individual stocks drive the majority of long term returns in a given index. Hence, the odds are not in your favor to buy a single stock.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
smectym
Posts: 852
Joined: Thu May 26, 2011 5:07 pm

Re: A great example of single stock risk

Post by smectym »

I only have one large single stock position—also a utility! Gulp. Duke Energy
Grt2bOutdoors
Posts: 23240
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: A great example of single stock risk

Post by Grt2bOutdoors »

smectym wrote: Fri Oct 11, 2019 8:40 pm I only have one large single stock position—also a utility! Gulp. Duke Energy
Depending on when you bought it, you’ve made money. The bought Cinergy and Pan Energy(renamed Spectra Energy) - the latter was subsequently sold to a Canadian company.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Grt2bOutdoors
Posts: 23240
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: A great example of single stock risk

Post by Grt2bOutdoors »

Bear Stearns! Just ask Jim Cramer: https://youtu.be/o3FVBKic5Ek
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
smectym
Posts: 852
Joined: Thu May 26, 2011 5:07 pm

Re: A great example of single stock risk

Post by smectym »

Grt2bOutdoors wrote: Fri Oct 11, 2019 8:49 pm
smectym wrote: Fri Oct 11, 2019 8:40 pm I only have one large single stock position—also a utility! Gulp. Duke Energy
Depending on when you bought it, you’ve made money. The bought Cinergy and Pan Energy(renamed Spectra Energy) - the latter was subsequently sold to a Canadian company.
It’s a DRIP, I’ve had it forever. It’s becoming a large position has sort of snuck up on us
MathIsMyWayr
Posts: 2703
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: A great example of single stock risk

Post by MathIsMyWayr »

Nortel.
Tanelorn
Posts: 1806
Joined: Thu May 01, 2014 9:35 pm

Re: A great example of single stock risk

Post by Tanelorn »

jrbdmb wrote: Fri Oct 11, 2019 8:15 am
Tanelorn wrote: Fri Oct 11, 2019 7:17 am
rossington wrote: Thu Oct 10, 2019 4:48 pm To be honest, anyone who invests in utilities would never go near PG&E. It is in a hopeless situation in possibly the worst regulatory climate in the country. This is a well known fact and nothing new.
Right. I mean, you’ve got to really not be paying attention not to know PCG has been in bankruptcy all year, getting sued for billions for the deadly wildfires over the last few years, etc. there was plenty of time to sell at $20 instead of $7-8 recently, and there may be again if the company’s bankrupt plan is accepted over the rival creditors one (which the judge just allowed to be considered, prompting this selloff). The company’s plan, as far as I vaguely understand it, consists of hoping for a bailout and stiffing the victims legal fund in order to prop up the stock price for the executives.
If this is all true and "well-known" why isn't PG&E already a penny stock? Enron, Valeant, and many others were also great stocks until they weren't.
The company isn’t going away, the question is whether the politicians will decide to bail out the shareholders or just the debt holders by changing the rules for fire liability and/or setting up a bailout debt fund or similar. If the politics go one way, the stock will likely over double in value. If they go they the other way, probably it’s worth very little. This is not inconsistent with this information being widely known, and honestly, if it was not widely known to you, you don’t really have any business owning PCG stock. Well, you can do what you want of course but don’t complain if you’re “blindsided” by some unfavorable bankruptcy outcome.
sambb
Posts: 2967
Joined: Sun Mar 10, 2013 3:31 pm

Re: A great example of single stock risk

Post by sambb »

AAPL. So glad I got in a long time ago and paid off my mortgage with the gains. iPhone is amazing device!
User avatar
zaboomafoozarg
Posts: 2196
Joined: Sun Jun 12, 2011 12:34 pm

Re: A great example of single stock risk

Post by zaboomafoozarg »

fposte wrote: Thu Oct 10, 2019 1:31 pm GTAT. People posted as they lost their life savings.

Edit: deleted link, because apparently the Contrarian Investor forum is no more. Dunno whether that's a comment on Contrarian Investing.
Here's a thread I posted here shortly after the GTAT bankruptcy happened. It had a few of the more noteworthy posts quoted from that thread.
cheesepep
Posts: 957
Joined: Wed Feb 17, 2010 10:58 pm

Re: A great example of single stock risk

Post by cheesepep »

I hate it when people cherry pick a single stock to prove their point. Yes, PG&E is a dead stock and there are many others such as Enron, etc. No one here (especially here) as advocated buying a single stock. Everyone has heard of diversification. Yes, buying the market is overall less risky than buying a single stock. That is not being debated here. Buying a single stock or a small portfolio of good stocks, as others have pointed out, can be even more rewarding.
rasta
Posts: 204
Joined: Fri Jul 27, 2018 4:29 pm

Re: A great example of single stock risk

Post by rasta »

yes, PG&E is a dead stock, just like others here that have been mentioned, like GE, Eastman Kodak, JC Penney, etc.
Yet the "own the whole market" index funds that are pumped on here rode these stocks all the way down along with thousands of other
dogs.
User avatar
mrspock
Posts: 1395
Joined: Tue Feb 13, 2018 2:49 am
Location: Vulcan

Re: A great example of single stock risk

Post by mrspock »

germark wrote: Thu Oct 10, 2019 12:12 pm ...

Times like this I'm glad that I only invest index funds. I can easily imagine an individual investor buying PG&E because it is supposedly a "safe utility company".
...
I could not agree more, I’m so thankful I learned about this style of investing. My only regret is that I seem incapable of convincing friends/family to seriously consider it over the various high cost advisor driven approaches. :?
Post Reply