8 ms·

It's the national equivalent of "Don't invest in your employer, because if it goes bust you lose your investments AND your job."

pfortuny 9y ago
You are already paud by your employer, you are not going to get more money or security from him.
- ekianjo 9y ago
  many companies encourage employees to buy stock with special rates.
  - EliRivers 9y ago
    If you're really lucky, as I'm sure you well know, you can ever put your pension into the company, and then when Enron goes bust you've got no job, no investments, no pension!
  - cmpxchg8b 9y ago
    Which any wise person would sell immediately to diversify.
    - simonh 9y ago
      Sure, but until those options vest you’re still doubly exposed. I’m in this position right now. A fixed amount from my pay goes into buying options which vest in 3 years time. Fortunately I could afford to lose that money if it came down to it, but it’s a real issue and in a worst case scenario that’s money I might need. It’s certainly a consideration.
      - rebuilder 9y ago
        There's a reason you get a discount. Are employees who buy options generally unaware of the risks?
      - wolco 9y ago
        Investing in options that vest in three years. Hopefully you are part of a big stable corporation.
    - dash2 9y ago
      That is not necessarily true. As an employee, you may be in a good position to judge whether a firm is likely to succeed, with perspectives not available to the market. This is why markets often react when CEOs buy/sell their own stock.
      - gaius 9y ago
        A CEO is an "insider" in market-speak. Jo(e) Engineer is just a punter like anyone else.
        morgante 9y ago
        That's not strictly true. Depending on the company, it's very possible for mere engineers to have access to material non-public information. There's a reason many companies impose broad blackout dates on trading.
        jessaustin 9y ago
        Mere engineers would be prosecuted long before CEOs for the totally-at-Justice-Dept-discretion crime of "insider trading".
        anigbrowl 9y ago
        That's self-evidently false. Engineers have insight into the internal culture of a firm and how it may differ from public perceptions, not to mention their own opinions on the quality of the back end technology and awareness of future plans or possibilities.
      - Marazan 9y ago
        The average employee would be in a terrible position. Ref: Enron.
      - _ph_ 9y ago
        The advantage of the employee isn't insider knowledge - it would be illegal to deal based on it - but understanding what the company does and which market it works in in the first place. This purely technical knowledge might give investment decisions some better factual support. But
    - morgante 9y ago
      You'd be amazed how many people willingly keep large portions of their net worth invested in their employer.
avar 9y ago
This advice is usually "Don't (only) invest in the industry you're employed in". See e.g. the dot-com bubble and how people who worked in IT and had invested their money mainly in IT were screwed, whereas it wasn't so bad if you just got fired and say invested in an S&P 500 index fund. But yes, investing only in your employer is a particularly bad version of that.
- jessaustin 9y ago
  ...investing only in your employer is a particularly bad... Haha when I worked for Lucent long ago they actually had a program set up exactly for that, so my more foolish colleagues received vastly-overpriced stock in place of some percentage of their salary. Thinking back, the managers must have had some kind of incentive because they hyped it in unseemly fashion.
  - arcticbull 9y ago
    ESPP programs are fairly common, and usually a great decision because they yield a minimum 15% return on the final value of the investment at the end of the program period whether the stock goes up or down. If you sell immediately, you realize a minimum of 90% ARR over the program period. [1] No need to keep it there if you just want to take your gains and walk. [1] https://thefinancebuff.com/employee-stock-purchase-plan-espp-is.html https://thefinancebuff.com/employee-stock-purchase-plan-espp...
    - jessaustin 9y ago
      In some cases one would be better served to run rather than walk. I remember advising colleagues as to the riskiness of this program in late 1999. Three years later LU had lost 98% of its value.
      - mercutio2 9y ago
        ESPP is guaranteed to make money for employees. Everyone should sell ESPP shares immediately, of course, and most don’t, so functionally you’re right, they’re dangerous, but if you can be mildly disciplined, I don’t think there’s a better investment in the world than taking your employer up on discount ESPP shares then selling the moment they’re in your account.

pfortuny 9y ago

You are already paud by your employer, you are not going to get more money or security from him.

ekianjo 9y ago
many companies encourage employees to buy stock with special rates.
- EliRivers 9y ago
  If you're really lucky, as I'm sure you well know, you can ever put your pension into the company, and then when Enron goes bust you've got no job, no investments, no pension!
- cmpxchg8b 9y ago
  Which any wise person would sell immediately to diversify.
  - simonh 9y ago
    Sure, but until those options vest you’re still doubly exposed. I’m in this position right now. A fixed amount from my pay goes into buying options which vest in 3 years time. Fortunately I could afford to lose that money if it came down to it, but it’s a real issue and in a worst case scenario that’s money I might need. It’s certainly a consideration.
    - rebuilder 9y ago
      There's a reason you get a discount. Are employees who buy options generally unaware of the risks?
    - wolco 9y ago
      Investing in options that vest in three years. Hopefully you are part of a big stable corporation.
  - dash2 9y ago
    That is not necessarily true. As an employee, you may be in a good position to judge whether a firm is likely to succeed, with perspectives not available to the market. This is why markets often react when CEOs buy/sell their own stock.
    - gaius 9y ago
      A CEO is an "insider" in market-speak. Jo(e) Engineer is just a punter like anyone else.
      - morgante 9y ago
        That's not strictly true. Depending on the company, it's very possible for mere engineers to have access to material non-public information. There's a reason many companies impose broad blackout dates on trading.
        jessaustin 9y ago
        Mere engineers would be prosecuted long before CEOs for the totally-at-Justice-Dept-discretion crime of "insider trading".
      - anigbrowl 9y ago
        That's self-evidently false. Engineers have insight into the internal culture of a firm and how it may differ from public perceptions, not to mention their own opinions on the quality of the back end technology and awareness of future plans or possibilities.
    - Marazan 9y ago
      The average employee would be in a terrible position. Ref: Enron.
    - _ph_ 9y ago
      The advantage of the employee isn't insider knowledge - it would be illegal to deal based on it - but understanding what the company does and which market it works in in the first place. This purely technical knowledge might give investment decisions some better factual support. But
  - morgante 9y ago
    You'd be amazed how many people willingly keep large portions of their net worth invested in their employer.

avar 9y ago

This advice is usually "Don't (only) invest in the industry you're employed in". See e.g. the dot-com bubble and how people who worked in IT and had invested their money mainly in IT were screwed, whereas it wasn't so bad if you just got fired and say invested in an S&P 500 index fund. But yes, investing only in your employer is a particularly bad version of that.

jessaustin 9y ago
...investing only in your employer is a particularly bad... Haha when I worked for Lucent long ago they actually had a program set up exactly for that, so my more foolish colleagues received vastly-overpriced stock in place of some percentage of their salary. Thinking back, the managers must have had some kind of incentive because they hyped it in unseemly fashion.
- arcticbull 9y ago
  ESPP programs are fairly common, and usually a great decision because they yield a minimum 15% return on the final value of the investment at the end of the program period whether the stock goes up or down. If you sell immediately, you realize a minimum of 90% ARR over the program period. [1] No need to keep it there if you just want to take your gains and walk. [1] https://thefinancebuff.com/employee-stock-purchase-plan-espp-is.html https://thefinancebuff.com/employee-stock-purchase-plan-espp...
  - jessaustin 9y ago
    In some cases one would be better served to run rather than walk. I remember advising colleagues as to the riskiness of this program in late 1999. Three years later LU had lost 98% of its value.
    - mercutio2 9y ago
      ESPP is guaranteed to make money for employees. Everyone should sell ESPP shares immediately, of course, and most don’t, so functionally you’re right, they’re dangerous, but if you can be mildly disciplined, I don’t think there’s a better investment in the world than taking your employer up on discount ESPP shares then selling the moment they’re in your account.