When I heard the news that JP Morgan was buying Bear Stearns for $2 a share, I was just sick over the total evaporation of capital that had just occured for so many people. I was reminded, too, of a conversation I had with a woman who worked for Sears (SHLD). She was close to retirement age, had worked for Sears for many years and had a great deal of her retirement money in Sears stock. The conversation took place in June, when SHLD was still trading around $145, and I asked her if she was going to sell any of her stock since it was down from highs around $190. She said no, she wouldn’t dream of it, because the stock may dip, but would always go back up. The shares are trading now around $92. I hope anyone holding their company stock in a retirement account takes a good look at their total portfolios to make sure they are well diversified. Did people learn nothing from Enron?
The markets, in my opinion, continue to trade as though everything is fine. I’m not surprised. People seem to believe the government will bail out everybody, so the markets will continue to rise unabated.
Update from CNBC: BSC shareholder’s lawyers are already filing class-action lawsuits against Bear Stearns, with more to come, I’m sure.
