I’m gonna give you a quote I just read on Money.com. You just let it sink in for a minute (emphasis mine):
“At $2 a share, you might as well just let them go bankrupt,” said Fred J. Wallace, a Houston retiree who owns 1,500 Bear Stearns shares, which he bought last month. Wallace, 62 years old, said he bought the stock with his retirement money when he heard a Bear Stearns executive on television saying the company was sound financially. “If I get contacted for a class-action (lawsuit), I’m interested in being involved,” he said.
Ahem. Let me get this straight, Mr. Fred J. Wallace, you bought 1500 shares of a company’s stock because said company had an executive who said the company was sound financially?!? Faulkner couldn’t come up with words to express my level of amazement. People in Houston must be bloody idiots after Enron and now this guy. Wow. Just Wow. You bought a stock that had to have been priced in the $80s that was so overexposed to the subprime market, any idiot with a stock screener could have found it, and you now want to join a class action?
We’re in for some bad times economically speaking, folks. This is the exact kind of crap that happened during the last bubble when Enron and Tyco and Global Crossing blew up in our faces. It’s going to get uglier and IMNSHO, it’s going to be a long recovery. I really hope I’m wrong but when you have average investors like Fred J. Wallace showing up in the articles, I don’t think I can be. I’m no expert but I can tell you that I sure wouldn’t want to be too exposed to the market over the next 12–18 months.