Republican Activist Judge Throws out Charges against Ken Lay.. - Page 2 - New England Patriots Forums

***BelichickFan*** · 10-18-2006, 09:14 AM

Quote:

Originally Posted by Pujo

They had no choice, it was a retirement fund and Enron got to invest it however they wanted, including into Enron.

We've been through this, that isn't true. They could invest their money in whatever they wanted. I think I heard the money Enron MATCHED (in other words, totally free) had to go into Enron but no company can force an employee to put their 401K contributions into that company. There was also a short lockout period when the employees couldn't move it out of Enron but that was a short period near the end.

Pujo · 10-18-2006, 09:23 AM

Quote:

Originally Posted by BelichickFan

That basically sums it up. The people who lost money don't deserve anything. I have all my retirement money in diversified mutual funds. So I only average about 10% a year. Poor me. I could pick a company, Exxon, Wal Mart, take your pick, and put it all in there. Maybe I'd win big. Maybe I'd lose big. But that's no different than the Enron employees. They gambled and lost. Too bad, they should have played it safe with their money instead of thinking Enron was a golden goose that would give, give and keep giving. The only thing stupider than investing all your money in one company is investing all your money in the company you work for.

So this is your basis for defending Lay? If one of your fund managers stole your money and you were out 10% of your investment, would you say "too bad, I should have known better" or would you want him rightfully prosecuted?

***QuiGon*** · 10-18-2006, 09:23 AM

Quote:

Originally Posted by BelichickFan

That basically sums it up. The people who lost money don't deserve anything. I have all my retirement money in diversified mutual funds. So I only average about 10% a year. Poor me. I could pick a company, Exxon, Wal Mart, take your pick, and put it all in there. Maybe I'd win big. Maybe I'd lose big. But that's no different than the Enron employees. They gambled and lost. Too bad, they should have played it safe with their money instead of thinking Enron was a golden goose that would give, give and keep giving. The only thing stupider than investing all your money in one company is investing all your money in the company you work for.

What cracks me up the most is their mentality that they should be compensated for the maximum value of their investment, and not the investment itself... For example:

Employee X invests $50,000 in Enron in 1997.
In 2000, that investment is worth $1,000,000 (on paper).
In 2001, ***** hits the fan, investment now worthless.

So what do you suppose Employee X wants...? He $50,000 back, or his $1,000,000..? Obviously he is going to talk about how he lost $1,000,000 when he really only lost $50,000.

Lesson: When you hear or read about how much money an individual lost on Enron, they are usually taking the sensationalistic view and using the maximum value of their investment, not the original investment itself.

Pujo · 10-18-2006, 09:25 AM

Quote:

Originally Posted by BelichickFan

We've been through this, that isn't true. They could invest their money in whatever they wanted. I think I heard the money Enron MATCHED (in other words, totally free) had to go into Enron but no company can force an employee to put their 401K contributions into that company. There was also a short lockout period when the employees couldn't move it out of Enron but that was a short period near the end.

Their company's 401K plan only allowed them to invest in Enron. True, they could have taken the money and invested it themselves, but then they would lose the ability to invest pre-tax, which you can only do with an affiliated 401K plan.

***QuiGon*** · 10-18-2006, 09:26 AM

Quote:

Originally Posted by Pujo

So this is your basis for defending Lay? If one of your fund managers stole your money and you were out 10% of your investment, would you say "too bad, I should have known better" or would you want him rightfully prosecuted?

This is a horrible analogy. Furthermore, no one is defending Ken Lay. He's a scumbag who deserves a fate worse than the one he got. But that isn't the issue at hand... the issue at hand is reparations to the investors.

Like I said before, nobody deserves to lose their life's savings, but when you put all your eggs in one basket, you have no right to complain when that "basket" goes belly up.

Pujo · 10-18-2006, 09:29 AM

Quote:

Originally Posted by QuiGon

What cracks me up the most is their mentality that they should be compensated for the maximum value of their investment, and not the investment itself... For example:

Employee X invests $50,000 in Enron in 1997.
In 2000, that investment is worth $1,000,000 (on paper).
In 2001, ***** hits the fan, investment now worthless.

So what do you suppose Employee X wants...? He $50,000 back, or his $1,000,000..? Obviously he is going to talk about how he lost $1,000,000 when he really only lost $50,000.

Lesson: When you hear or read about how much money an individual lost on Enron, they are usually taking the sensationalistic view and using the maximum value of their investment, not the original investment itself.

When you lose $50K that you invested years ago, you've lost way more than the original $50K. You've lost the interest, too, which is meant to protect you against inflation risk. Would you want your money sitting in a mutual fund for a decade, only to get your original investment back when you withdraw it? If so, I have some real estate I'd like to sell you.

***QuiGon*** · 10-18-2006, 09:29 AM

Quote:

Originally Posted by Pujo

Their company's 401K plan only allowed them to invest in Enron. True, they could have taken the money and invested it themselves, but then they would lose the ability to invest pre-tax, which you can only do with an affiliated 401K plan.

Bullcrap. There are other ways you can invest money pre-tax (or, better yet, pay taxes up front and receive it tax free on the back end).

But essentially you are saying that their own greed enticed them to invest all their money in just one company. So why should anyone but them be blamed for their own stupidity and greed...?

***BelichickFan*** · 10-18-2006, 09:30 AM

Quote:

Originally Posted by Pujo

Their company's 401K plan only allowed them to invest in Enron.

I don't think that's true. But I can't prove it without investing more time than I want to. But any 401K is typically allowed to be rolled over into a tax deferred IRA of the employees' choice.

***QuiGon*** · 10-18-2006, 09:31 AM

Quote:

Originally Posted by Pujo

When you lose $50K that you invested years ago, you've lost way more than the original $50K. You've lost the interest, too, which is meant to protect you against inflation risk. Would you want your money sitting in a mutual fund for a decade, only to get your original investment back when you withdraw it? If so, I have some real estate I'd like to sell you.

Pretty weak response Pujo - even by your standards. What's the interest on $50,000 over 4 years...? At 5% annual interest, you would have about $60,000 instead of $50,000. So my point stands.

***BelichickFan*** · 10-18-2006, 09:34 AM

Quote:

Originally Posted by Pujo

So this is your basis for defending Lay? If one of your fund managers stole your money and you were out 10% of your investment, would you say "too bad, I should have known better" or would you want him rightfully prosecuted?

It would suck but not only do I have my money in mutual funds, I have it spread through about 10 different ones. Lower upside, lower risk. Others go for higher upside and higher risk. Good luck to them.

Bottom line, though, I have half my retirement in the S&P 500 which is about as sexy as a 65 year old woman weighing 300 pounds. But it averages 12% over the past 70 years and it can't be "stolen" from bad investments as they have to invest it in a balanced way through the S&P 500 companies. Safe. But secure.