By: Revanche

A Twitter-like conversation about the stock market

September 29, 2008

Some months ago, a friend and I discussed how buying banks is currently A Bad Idea. Considering Wamu had dropped to about $12/share, it definitely seemed like banks were in for a wild ride. Friend recently confessed to buying more financials: more Wamu, Citigroup, Wachovia, Amex. Given our conversation and conviction with which “banks are bad” was previously stated, I couldn’t resist ribbing Friend today.

Revanche: Did you hear about Citi + Wachovia?
Friend: Don’t remind me about Citi + Wachovia.
R: Why, isn’t this a good thing? Doesn’t this mean at least one set of stocks won’t be worthless? *blink blink*
F: I hate you.
R: Hey, good news: current bailout plan voted down! (Friend was unhappy about the bailout.)
F: Hm, modified bailout (less money) will probably come up for vote soon. Maybe they’re waiting for my financials portfolio to become insolvent first.
R: That’s not going to take long. Are you really going to hold on to them?
F: What choice do I have?
R: Do you have a good reason to hold on? “Hope” isn’t really a strong strategy.
F: Locking in my losses isn’t a good strategy, either. Any other advice, Ms. Buffett?
R: My logic sucks less than yours, Wamu.
F: Grrr…..

I wanted to point out that selling at a loss and having a tax credit seems better than having more worthless stock (a la the Wamu shares) at the end of the day. Buuut I think Friend was no longer in the mood to chat. And what do I know, anyway? I don’t play in the stock market.

2 Responses to “A Twitter-like conversation about the stock market”

  1. I kind of subscribe to the theory that regular people (I assume your frined falls into this category) should not be investing in individual stocks.

    I feel for your friend, though. I saw how Wachovia shares plummeted…

  2. Revanche says:

    paranoidasteroid: If you mean by “regular” that he’s not an investor by trade, then yes.

    He’ll be ok, it’s not like he went crazy buying the stock up (or if he didn’t, he didn’t admit it).

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