Normally I shy away from writing about all the “established” stocks out there, companies like Bear Stearns (NYSE: BSC), especially when they’re covered by the WWF of financial media—CNBC (c’mon guys have me back on, I’ve been working on my eyebrow trick!!!) but this Saturday article speculating BSC will get taken over at $15 or lower or facing bankruptcy really hits home. Not because I have stock—I’d never—or because I know a bunch of people who work there—I know just a few (sorry, my heart truly goes out to you!!)…
No, I bring this tragedy up for three reasons—1) considering the stock tanked from $90 to $30 in less than a month, a $15 takeover will kill those who “bought the dip” on Friday, aka why you should NEVER buy falling knife chart patterns, especially financial / mortgage plays, 2) no matter the final buyout price / bankruptcy, it shows how quickly these “rock solid institutions” can come crashing down, aka they are nothing more than scummy peddlers
and 3) since stockholders are the last to get paid, you gotta realize “investing in a company” is a figment of your imagination, you’re doing nothing more than getting a receipt saying you’ve spent a ton of money on something that isn’t real, aka why it’s so dangerous to “invest” and you should instead think of stocks as chips on a table in Vegas.
Like boiler rooms, maybe they did something illegal, maybe not, but that’s not why I make the comparison—no, it’s because ALL these firms Goldman Sachs, Merrill Lynch, J.T Marlin, the lot of ‘em, they’re all just peddlers. Peddling deals, stocks, bonds, whatever. Some environments are better for peddling than others, some companies are better at peddling than others, some of the crap they peddle is better than others—no matter the variables, they’re all playing the same game. Once investors and other peddlers lose faith in a peddler’s ability to do their job, that being to peddle—especially when highly leveraged, as nearly all peddlers like to do—the jig is up.
No matter how well produced their commercials are, how glossy their marketing materials well trained, experienced or brain washed their peddler employees are—none should be trusted. BSC started back in 1923. 1923 for God’s sake! And now it all comes crashing down in a few weeks.
PS I’m glad their King Peddler was caught lying on national TV (c’mon prison sentence, big prison sentence, get your prison sentence here!!)—this didn’t happen in 24 hours. They dug themselves this hole over many years. Read this damn book and you’ll see how leverage destroys. Leverage is the enemy. Marketing leverage is even worse, now that’s the true enemy.
Now this is coming from somebody who has no corporate experience whatsoever, few corporate contacts, blah blah blah, I’m just a cynical guy who’s learned—the hard way—not to trust anybody or any firm whatsoever. See my cool new video bio, straight from my similarly no BS PennyStocking DVD: