As I read this story about New Century’s collapse I couldn’t help thinking back to Enron. During their heyday both sat close to the top of their respective fields; Enron with energy trading and New Century with its boatloads of sub-prime mortgage loans. And now both destined to be homework assignments for future MBAs. What ties both of them together for me is that at one time they both caught my investment eye and almost my investment dollars.
I would love to claim that I had the foresight and investment acumen to duck investing in either but the truth is much simpler. Avoiding sinking money into them boiled down to old fashion luck and a few well timed ADD moments. Days before I was to jump on the bandwagon and throw money at Enron I got distracted with Exxon. Then in an ADD blink my money was headed to XOM and their DRIP, with Enron forgotten about till they made the nightly news with their meltdown. A few years back New Century seemed to be making money hand over fist. They had popped up on a stock screen and with a money sense of déjà vu` another bandwagon was going by. Once again my ADD sidetracked me with General Growth Properties (GGP). General Growth had likewise popped up on a screen, they just didn’t seem… I don’t know… as sexy as NEW. Well some how GGP got the check and I got another DRIP.
Sometimes, I wonder if I would have had the presence of mind to jump off the Enron free falling elevator or if I would have had frozen up and crashed to zero with it. Looking back at NEW’s chart I wonder how many felt the end near when it dropped from $30 to $20 in a day and sold? How many bought at $16 thinking there would be a bounce? How many still sit with shares bought at $60 back in ‘05 wondering what just happened?
I don’t wish anyone bad luck in the market, we all have to eat. But… with that being said I am more than willing to learn from other’s mistakes. After all it is alot cheaper and one day the ADD may not be there to save me.
Have any good “near miss” stories? I would love to hear them. E-mail me or add a comment.
That’s it for today. Here’s to near misses, ADD moments, imploding companies, and to keeping an eye on your EveryDay Money.