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Corporate Let Downs

March 5th, 2009 2 comments

I’ve watched many of the stocks I own drop by unimaginable percentages – some of them around 75 to 80 percent.  The only upside is that I’ve learned a great deal.

I’ve learned that a CEO of a company can claim loudly that “The dividend is safe!” only to turn around the next week and cut the dividend by 68%.

I’ve learned the government (Senators) can make speeches about the stability of Freddie Mac and Fannie Mae, yet have to take over them to keep them from going bankrupt within that very month.

I’ve learned GM really had no chance of staying “a going concern” even though the executives said they were in the process of a turnaround.

I’ve learned executives at Merrill Lynch still got a bonus even though they lost billions of dollars before they were sold to Bank of America.  And speaking of Bank of America, it turns out they paid way way way too much for both Countrywide and Merrill Lynch and knew it at the time.

I guess the point of all this is that when people are out for themselves (whether trying to make money or save their reputation) you can pretty much take what they say with a grain of salt. 

…just another thing to try and keep in mind.

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