Signing Your Credit Card October 14, 1999January 29, 2017 RE: IDIOTS AT WORK Craig Sellers: “Don’t try using an unsigned credit card outside the U.S. If you are lucky, they will simply refuse the unsigned card and request that you use another. If you are NOT lucky, or attempt to sign the card in front of the merchant, they will destroy the card. I first experienced this in Cozumel, Mexico where I was lucky enough to have another signed card to use. I have experienced similar situations and seen others cards destroyed in Europe, including London and Paris. These lessons taught me to always sign my credit cards no matter how ridiculous it seems.” DON’T TRY THIS IN EUROPE David Cook: “The comment from ‘Steve’ today prompted me to write about signing credit cards. I write ‘See Driver’s License’ on the signature line. If my card is stolen, the thief will most likely take off running when a clerk asks to see his/her driver’s license. Of course, only one in ten clerks look at the back of the card and ask for my driver’s license. But it gives me some comfort knowing that, within 10 tries, my stolen card will possibly be recovered. What do you think?” I think it’s brilliant. But based on Craig’s comment, above, I might not try it overseas. Of course, some credit cards now carry your photo — I don’t know why others have been so slow in adopting this — and that should be a good deterrent, too.
Save Fifty Bucks? October 13, 1999February 13, 2017 FIFTY BUCKS OFF A POWER SAW . . . Mark Centuori: “You occasionally highlight certain shopping opportunities. I don’t recall reading about a site called Mercata. It’s a general merchandise site that will give you $50 in Mercata cash if you register (which is free). You can use it for merchandise, I think up to 50% of the purchase price, until Nov. 30. Shipping is currently free. They have things called Powerbuys which can lower the regular price even lower. I have no idea how their pricing usually runs, but with the free shipping & $50, it may not matter. I have no affiliation with Mercata.” IDIOTS AT WORK (Steve’s title, not mine — but it does seem apt) Steve: “I was signing the receipt for my credit card purchase when the clerk noticed that I had never signed my name on the back of the credit card. She informed me that she could not complete the transaction unless the card was signed. When I asked why, she explained that merchants needed to be able to compare the signature on the credit card with the signature I entered on the receipt. So I nodded and signed the credit card in front of her. She then carefully compared that signature to the one on the receipt. As luck would have it, they matched. And that is why that person works as a cashier.” DUMP THAT FUND? As those of you who have registered at Personal Fund already know, we’ve added a new calculator to www.personalfund.com. It helps you figure out whether it’s worth the costs of dumping one mutual fund for another. (Sure, the new one might do better. But what if you incur taxes selling the old one?) We’ve been getting some nice notices for this site — which I should stress redound mainly to the credit of my partner Stefan Sharkansky, who has done the lion’s share of the work and good thinking. An e-mail I particularly enjoyed came yesterday from a former high-ranking S.E.C. official: I was [title deleted until we get permission to identify him] at the SEC when we wrote our own web site’s cost calculator. We couldn’t devote the kind of resources to our calculator that you obviously have devoted to yours. By including data, comparisons, and tax effects, you have done a terrific job. We thought about this problem for a long time, and wanted to include such things, but it was beyond the scope of our budget. Ah, if the United States government only had our resources.
The Height of Compassion Leadership By Example October 12, 1999February 13, 2017 This one’s not about money unless you or a friend or relative happens to need a job to earn some. In that case, it’s about money. Apparently, George W. Bush recently told a Christian group that, if elected, he would not knowingly hire someone who was openly gay . . . but that, being a compassionate conservative, he wouldn’t fire someone later discovered to be gay. Those mistakenly hired would be grandfathered in. This is almost breathtakingly bad policy, when you think about it. If gay folks are unfit for responsible posts, why should they be tolerated once discovered? And if they ARE fit for responsible posts, why discriminate against them? Just to narrow the nation’s talent pool? Could this have been Lincoln’s policy? That Negroes would not be hired . . . but that if some particularly light-skinned Negroes made it through unnoticed, and were later discovered to have some Negro blood, they would be allowed to stay? Lincoln was a Republican — what would he have made of this policy? And what exactly would Bush have young gay kids think? That they are unwelcome, second-class citizens unqualified for decent jobs? That they should kill themselves? That they should just work really hard at faking heterosexuality, lying as necessary, committed to lonely, loveless lives? That they should all become priests or dancers? The power of the presidency is largely the power to lead by example. So is it Bush’s view that IBM and Microsoft and Disney and J.P. Morgan and Chevron and American Airlines and General Mills — and 250 other Fortune 500 companies — are behind the times for explicitly including gays and lesbians in their nondiscrimination policies? That the forward-looking, compassionate, new-vision thing to do is to post notices in all their ads, just above the “Equal Opportunity Employer” logos, saying: “Gays and lesbians need not apply?” If gay graduates are not fit for government service, are they fit for government-subsidized college educations in the first place? George W. told USA Today on August 19 that the New Jersey Supreme Court was wrong — that the Boy Scouts should be allowed to exclude gay kids, just as, we now learn, George W. would exclude gay people from his administration. And just as he stood by as the Texas Republican Party barred the gay Republicans from its convention. How about this — a U.S. Government pamphlet describing just where gay people may and may not apply for work? And in places that do have to employ them (lest millions just go on the dole, which the Republicans surely wouldn’t like), how about separate water fountains? It would be funny if it were not so profoundly unAmerican.
Closed for Columbus Day October 11, 1999March 25, 2012 A lot can happen in 507 years. Not normally. Normally, nothing happens. Take, for example, the 507 years from 112,520 to 112,003 BC. Nothing happened. So, too, the 507-year period from 21,958 to 21,451 BC. Or even the 507 years from 611 to 1118 AD. Yes, there was great daily drama and suffering and struggle in those years. But in terms of progress . . . imperceptible steps, at best. No more. Now every ten-year stretch is a pretty big deal, never mind 507 years. I’m going to take the day off to contemplate just how North America has changed in the brief time since Chris set sail. And it is a brief time. It’s fewer than ten of the stretches of time I’ve been around; and just about five really long lifetimes, laid end to end. (In Detroit, one of the honorees at the dinner I wrote about Friday was 100 years old. And she danced.) And the pace of our progress is only accelerating. There will be no column today.
Following the Senator October 8, 1999March 25, 2012 The other day I was in Detroit to speak at that city’s annual black-tie Human Rights Campaign dinner. About 1,200 people. I was to speak first, followed by Allan Gilmour, who until a few years ago held the number two spot at the Ford Motor Company. (Back then, as Ford’s Vice Chairman, he felt he could not be openly gay. Retired, and with the world having come a long way, that’s no longer an issue.) Allan would be followed by Elizabeth Birch, who heads the Human Rights Campaign (and who, with her partner Hilary, has adopted two wonderful babies), followed by Senator Bill Bradley, the keynote speaker. Though the average American claims to prefer death to public speaking, I was not overly concerned. It’s easy going first. The audience is fresh; you don’t have to worry about repeating what someone else has said; and then you get to eat. (Bad idea to eat first — all the blood that should be in your brain, thinking, rushes to your stomach, digesting.) As it happened, the Bradley schedule required his leaving as quickly as possible, so the speaking order was changed to put him first. Once everyone was seated after the cocktail hour, and once the pre-set salad had been consumed, the dinner chairs introduced Senator Bradley. Three minutes into his speech, someone with a headset who apparently actually believed that the Senator would be speaking for just 10 minutes found me and took me over to the on-deck area. The Senator spoke — wonderfully — for half an hour. (Let me hasten to say: we at the Democratic National Committee are neutral. The Vice President, as more and more people will come to realize, is also wonderful. Either one of them would be a terrific president.) Bradley’s delivery was measured, as he leaned down, down, down to the lectern mikes. No thumping or shouting or histrionics. But his message rang clear and true: equal rights for all, including gays and lesbians. (You can’t be fired in America just for being Jewish or black. But in most places you can be fired just for being gay. Or consider this: Georgia Congressman Bob Barr’s third wife — or his fourth if he should remarry — is entitled to full spousal Social Security benefits if something should happen to him. But the lifelong partner of a gay man or lesbian receives not a dime, even though the gay couple may have paid more in taxes and been together five times as long.) The crowd interrupted many times for applause and when the Senator was done, he received a standing ovation. Spirits and noise level in the ballroom were high. Bring on the entree! It’s nine o’clock. We’re hungry! At which point, an invisible voice from the ceiling announced, “Pleadh wllcccm the trzhr othe demcrtc natl commi an auth andy tobzhzh” — over the noise, who knows what anyone listening might have been able to make out. And no one was listening. The crowd was excited by the speech they had just heard, excited to be with their friends, and excited by the prospect of the entree. And even if they had heard — can you think of an introduction that sounds duller than, “Please welcome the treasurer of the Democratic National Committee?” (“Please welcome the county auditor,” perhaps?) Up I bound to the stage, and this is not the first time in my life I have ever given a speech. But it is the first time in my life I have been shorter than the microphones. Yes, the Senator had been stooping to reach them, but for me they were at hairline level. And I’m not sure, but I think my hairline may even have begun to recede a little in recent decades. Hours later I would remember that lecterns like this have levers to raise and lower them. But with the bright lights and the need to seize the moment, I was just too stupid to think that fast. “That’s a tough act to follow,” I shouted, hoping to get people’s attention, “and the great thing is — it wasn’t an act! The Senator means it! And so does the Vice President! And the President! And the Democratic party!” . . . my thought being to capture the enthusiasm in the room and segue straight into my own remarks, about being so proud of all that the Democratic Party has accomplished for millions of gay Americans and their families. “I will be brief,” I continued — eliciting a cheer from a table someplace in the back. This turned out to be my only applause line. I have no idea what else I said, as I raced through my notes to get out of the way of the sliced chicken Kiev. I think I may have mentioned that the Log Cabin Republicans (the gay group) had been barred from the Texas State Republican convention, and that the Governor of Texas — his name escapes me — did nothing to reverse that. Anyway, here’s my advice. Vote for either Gore or Bradley — enthusiastically — but do anything you can to avoid following them at the podium. Also, not to get too personal, but be sure to check a new formal shirt for pins everywhere before you get all tuxed up and cummerbunded. Talk about surprises! But that’s another story.
Specifying WHICH Shares – Part 2 October 7, 1999February 13, 2017 Recently, we discussed how to specify which shares of a stock or fund you’re selling — if you’re not selling your full position — so you sell the shares with the smallest taxable gain. (Each separately-purchased set of shares is called a “tax lot.”) Unless you are willing to accept the IRS presumption that you are using the “first in, first out” method . . . which often means selling the shares you bought cheapest . . . you have to let the broker or fund company know which shares you want to sell by specifying a “versus purchase” (VSP) date. As in: “Sell the 50 shares I bought on April 3, 1986.” And you have to get and keep written confirmation from your broker or fund company. Mike Watts, Associate Professor of Accounting at the University of Arkansas, has pulled up the actual regulations . . . Treasury Reg. Sec. 1.1012(c)(3): (i) Where the stock is left in the custody of a broker or other agent, an adequate identification is made if — (a) At the time of the sale or transfer, the taxpayer specifies to such broker or other agent having custody of the stock the particular stock to be sold or transferred, and (b) Within a reasonable time thereafter, confirmation of such specification is set forth in a written document from such broker or other agent. As a practical matter, some brokers aren’t set up to do this very well. Mike recounts his own experience . . . “I’ve had problems, both myself and with clients, where the broker or mutual fund management company did not provide any type of confirmation. The issue has never come up in an audit, but it seems to me that the brokerage houses and the mutual fund companies should be doing all that they could to ease any potential problems for their customers.” Realistically, as I suggested last time, if you make a good faith effort to specify the shares, by faxing in a note and keeping a copy of that with your records, you should be able to sleep well. There’s only a remote chance you will be audited and that, if audited, this will be an issue, and that, if you are and it is, your auditor will decide to be a complete [expletive deleted]. Tomorrow: Something — anything! — less boring
Wanted: A Trustful Mutual Fund October 6, 1999March 25, 2012 Rachil T: “I am a layman on investment. I graduated from college three years ago. Today, my manager, co-workers and I talked about personal investment. My manager suggested as a young person as I am, I should start investing. Since I am a kind of person who does not want to take the risk, a stable Mutual Fund will be suitable. My manager gave me your name. Thus, I found your web site. I would like to know if you can provide me some suggestions of seeking a stable, reliable, and trustful mutual fund. Thank you for your times and helps.” Being young, Rachil, you can afford to take some risk and not pay for too much stability. (Stability doesn’t come free.) Just put away something every year, and down markets will be great for you in the long run, because they’ll allow you to buy even more shares when the price is low. Remember: when buying, you hope for low prices. It’s 40 years from now, when you start selling, that you hope for high prices. Just be sure not to put money into the stock market, either directly or through mutual funds, that you might actually need in a year or two or three. That’s too short a time horizon for the stock market.
Yuccas and Suckas October 5, 1999February 13, 2017 Recently, I passed on to you news of a stock-picking yucca plant. When it beats the averages, it is rewarded with water and light. When it lags, its owner moves it into the closet. To which James Schaefer responded: “Yucca? We do it better in Texas. At the start of each year The Fort Worth Star-Telegram newspaper marks a grid on the floor of a cow pen. ‘Rusty’ eats and drinks. The financial editors then keep track of where the chips land and those are that year’s pick for the portfolio. In 1998 the cow beat the market. Here is Rusty’s portfolio of local companies.” Reason enough to move to Ft. Worth. Thad Fenton, meanwhile, lives one town over. His comments have nothing that I know of to do with yucca. “While riding into work this morning in our car pool,” Thad writes, ” . . . probably the only car pool in North Texas, from the looks we get on the North Dallas Tollway . . . we hear a radio ad for a dot-com company that promises to get you four loan commitments within hours. This generates a discussion about the benefit consumers are reaping from the Internet in general, and from all these dot-com companies specifically. We marvel that we can save money by buying from Amazon.com versus the local stores. And that a copy cat dot-com, Booksamillion, sells the same books cheaper than Amazon. And there’s probably a copy-copy cat that’s selling the book even cheaper than BAM. Which is even more amazing considering the fact that Amazon is still losing money on each book it sells. Which means BAM must be losing even MORE money, and the losses must magnify down the line to each copy-copy cat. “I comment that consumers are really saving money, for free, and the cost is borne by these dot-coms, but at some point we’ll probably have to pay a monthly fee to support these cost comparison and price shopping Internet services. Then Wayne, our driver, makes a comment that hits me like a bolt from the blue. ‘Yeah, as long as investors capitalize these Internet companies, I’ll buy the products they sell at a loss.’ “His comment crystallized for me the zero-sum equation. The dot-com companies aren’t subsidizing the tremendous savings on consumer goods via the Internet; it’s the dot-com ‘investors’ who are. The dot-com investors form the reservoir of money; the dot-com officers/employees drink heavily from the cash stream as it flows out of the reservoir; and the end consumers get sips downstream until the stream eventually dries up. As long as someone props up Amazon’s stock, my book purchase is subsidized. As long as I don’t buy any Amazon stock, yet buy books from that company, I’m ahead of the game. “It’s so simple, but it never dawned on me until Wayne hit the nail on the head. All the dot-com investors/speculators are transferring their wealth to consumers via Internet companies that have no net profits due to impossible business plans. As long as the dot-com stock speculation continues, consumers will reap extraordinary savings. When the bubble bursts, the subsidies will cease and consumer prices will go up on the Internet, and perhaps in brick and mortar stores too.” Are Thad and Wayne right? Are investors in Internet stocks suckers? (“Suck-Ah’s!” as W.C. Fields had it.) Only the yuccas know for sure.
OK — Stupid October 4, 1999February 13, 2017 You are such a tough crowd. Friday, I responded to one of you who was considering participating in his company’s Employee Stock Purchase Plan. His wife thought he shouldn’t do it. But like many such plans, this one offered two incredible things — hindsight (by allowing him to purchase shares in his company’s stock at the lower of the current price or the price six months earlier); and free money (by giving him yet a further 15% discount off that price). In other words, worst case, he’d have an instant 15% gain on the shares. “So, what do you think?” he asked me. “Am I better off staying out of the plan as my wife thinks or am I stupid not to be investing to the hilt, as my co-workers say?” “Well, I wouldn’t use the word stupid,” I replied, not wishing to offend. “But it does sound like a very good deal.” Several of you thought I was being much too polite. Dan H.: Well, I’d use the word “stupid.” You hit a pet peeve: people who don’t enroll in their ESPP programs because they think they can’t afford it. The plan that your correspondent describes is pretty typical for those of us that work in the high tech field. Consider the ROI [return on investment] of investing in the aforementioned ESPP. He gets a 15% discount. Ok, so his ROI is 15%. No, wait. He only had the money tied up for six months, so the ROI is 30%. No, wait. He started out with no money invested and in a linear progression invested the full amount over those six months. On average, he only had half of the money invested for those six months, so the ROI on his investment is really 60%!! [No wait. If you do it on an annualized basis using the IRR function of your calculator or Excel spreadsheet, it comes to more like 93%.] What other investment guarantees you 60% [let alone 93%] ROI with no risk?? If he’s concerned about the market volatility, he can always short the shares on the day the ESPP period ends (assuming that he has a margin account) and then deliver up the shares to close the position when he actually gets them. If liquidity is the issue, he should take note that one is better off borrowing against a credit card at 21.5% and enrolling in the ESPP program rather than not participating in the program!! If his concern is brokerage fees, then open an Ameritrade account and pay the $8. Furthermore, if he holds the shares for 1 year after their receipt and 2 years from the enrollment date for the ESPP, then they qualify for long-term capital gains treatment and only the 15% discount is taxed at the ordinary rate. You may even be able to get away with deferring the payment of taxes on that 15% discount until you sell, depending upon the position that your employer takes with the IRS. (They, being the IRS, argue that the tax is due now. Some high-tech employers argue that is not the case.) Oh yeah, and don’t forget the considerable upside possibility that Sun Microsystems stock may continue to skyrocket during those 6 months [so the 15% guaranteed gain — which is really a 93% rate of return — might actually be a great deal higher]. How else can you invest in a tech stock without personally assuming any risk of loss? Just sign up. Brian Holdren explains very clearly how that minimum 15% turns out to be 93%: I use the following example to try to persuade people that it is foolish not to participate in these plans. [Ah — foolish! That’s a lot less offensive than stupid. Brian is a diplomat after my own heart.] Assume you contribute $100 per pay period (twice a month in this example). At the end of 6 months you have put in $1200. You get a 15% discount on the stock when you buy it, so you’re able to buy $1411.76 worth of stock for only $1200. (This assumes that the stock price has not risen over the 6-month period.) But, not all of your $1200 dollars has been tied up for the full 6 months. In fact, less than half of it has been. Try to figure out what interest rate you’d need from your local bank to turn those $100 twice-monthly deposits into $1411.76 after only 6 months. Input the 12 biweekly payments into Excel, and it will tell you: 93%. The annualized return comes from Excel’s XIRR function (Internal Rate of Return). Of course, not all plans are equally good, so it’s important to understand the rules . . . Clint Chaplin: “I had to interject something: Some companies will not allow you to flip the stock when you purchase it; they require a six month holding period, in which time the stock could go south on you.” And not everyone is enamoured with them . . . Toby G: “I have had experience with these also. I was in one for several years and eventually came out of it just about even. That came from holding on to the shares. I then swore off of such plans for life. [I have withheld Toby’s last name here in order to be able to say it’s really . . . foolish . . . to swear off these plans, let alone swear them off for life.] A more important point about your article today: a company I worked for recently also had such a plan. But their policy was that employees were not permitted to short the stock or to trade in options at all. So, if you were in the plan you were vulnerable to short-term losses if they occurred when you were buying shares. And it did happen, and not just in October 1987. They did make one adjustment to ease this, though: they moved the plan dates to mid-quarter instead of coinciding with the ends of the 2nd and 4th quarters, since the greatest volatility occurred in association with reporting quarterly results.” Plans do differ . . . David D’Antonio: “I read your comment today about Employee Stock Purchase Plans and I was rather taken aback that it took this person 2-3 WEEKS to get his shares. The company I work for has about a 2-3 DAY delay due to much of the work being done by hand. But I still could sell on the day the shares were posted to the account.” David goes on to make a separate point: “There is another way to get burned, as some people have here. Namely: black-out periods [during which you are not allowed to buy or sell shares]. The ESPP buy dates used to coincide with a company-wide black-out due to earnings announcements. When the black-out period expired, the stock was often lower than the buy price. But that’s been fixed by shifting the ESPP buy dates. And then they removed the black-out period for all employees under the Director level so it’s doubly moot for most of us.” But by and large, as I tried to suggest Friday, Employee Stock Purchase Plans are generally a very good deal. Let’s give the last word to ddg (who prefers to be identified only by his initials): Uh, oh, Andy you blew it today. Your advice was below par, not what I expect from you. His company is offering him 17.6% free! [If you get $100 of stock for $85, you’re getting a 15% discount. But your $85 has instantly appreciated 17.6%. And as noted above, the actual internal rate of return comes to more like 93%. And all this presupposes that the stock has not risen during the six-month period. The actual discount could be much higher than 15%.] Should he take the free money? The answer is: It is stupid not to. [Stupid! Cretin-like! Dumb as mud!] The deeper question is: should he sell the shares immediately? His wife’s complaint that he “has no money to invest” is inexcusable [inexcusably stupid!]. If he has a steady income, he must set aside a portion to invest, and you should have emphasized that. It will never be easier to start in the future. The part that gets easier is the amount, not the initial habit. So my advice would have been to squeeze your finances for whatever you can. Eat hotdogs, or rice and beans, or maybe even fast one day a week. Whatever. Start payroll deducting as much of the $4000 as you can. If you can’t do it all this year, add 50% of your next raise, and 50% of the next one until you do get to the “hilt.” (Like I said, it does get easier.) When you get the shares, you will pay taxes on the 15% company contribution, but you won’t have brokerage fees unless you sell. If you absolutely must have some of the money back, then sell what you must. But just as you squeezed to get the shares, you should hold them, too. As long as you believe in your company’s growth, then you should take the opportunity to own part of it. If you don’t believe your company is worth investing money in, then you have a bigger problem — you shouldn’t want to invest your time there either. [DDG may be getting a little carried away here. It’s not easy to hop jobs every time you think your company stock is overvalued, or less attractive than others. And you already have a huge egg in the company basket — your livelihood. Think twice before putting too large a portion of your net worth in the same basket.] Brian must form these habits now. I’ve “been there, done that,” and over my wife’s initial objections, too. She’s a lot more comfortable with it now, particularly since the investment is worth 8 times my total contribution. Please use only my initials if you print this. — David D. Godfrey Needless to say, all this works better when stocks are generally rising than falling. But over the very long run, stocks generally do rise. And, in any event, if your plan allows you to lock in your 17.6% profit instantly, with no risk of loss, it’s stupid not to take advantage of it. There. I said it. (Needless to say, also, I’m kidding about David D. Godfrey. Ddg’s real name is . . . well, I can’t tell you.)
Options, Futures, and Employee Stock Purchase Plans October 1, 1999February 13, 2017 Mike Asato: “I am told that options and futures are taxed differently from stocks and bonds. If that is true, are LEAPS (Long-term Equity Anticipation Securities) — options with two to three year time-to-expiration periods — taxed like conventional options? How long can capital losses that could offset capital gains be carried forward?” With options, the tax treatment is tricky only if you exercise them. Otherwise, you just treat your profit or loss like any other. With LEAPs held more than a year, gains get the favorable long-term gains treatment. (If you do exercise an option, there is no tax due at that time. Rather, the cost of the option is added to the cost of exercising it, and that becomes the “basis” of your holding. When you eventualy sell, the gain or loss is calculated accordingly.) But you’re right: futures (also referred to as “commodities”) are taxed specially. Futures are marked-to-market at year-end and assumed to be 40% short-term, 60% long-term, no matter how long you’ve held your position. I realize that may sound dense to someone who doesn’t know much about this, but I have no interest in explaining it because if you speculate in futures, you will lose your money. So forget it. As to the last part of your question — “How long can capital losses that could offset capital gains be carried forward?” — this isn’t really important, counsels my wise friend Less Antman, “since a person who trades extensively in options will never have any capital gains.” However, you can carry your losses forward indefinitely. Or, as Less puts it, “The carry-forward of unused net capital losses has no expiration date, except for the expiration of the investor.” Brian Utterback: “One thing your book does not mention is Employee Stock Purchase Plans. I am sure you know about these types of plans, where there is a payroll deduction throughout a 6 month period, then at the end of the period the money is used to purchase the company stock at a 15% discount on the lesser of the price of the stock on the first and last day of the period. So theoretically, the worst case scenario is that you could sell the stock immediately for a 15% profit, possibly much more if the stock has gone up over the 6 months. “Unfortunately, it is possible to lose money, as I once discovered. It takes 2-3 weeks to get the shares, during which time the stock could go down. And that is what it did to me. It went down 25% in 3 weeks, after having gone down about 5% over the 6 months. That was in October of 1987. While this is unusual, it has happened to several of my friends as well. “The company I work for is Sun Microsystems, which has had extremely good performance of late; I believe this will continue as I have a lot of faith in it. If I had enrolled in the plan for just the one 6-month period 2 years ago when I started here, and held the stock until today, I would have made a 425% return. “My wife does not think this is so worthwhile (she hasn’t read your book). With the brokers fees, and taxes, she feels that the return is too small. We do not have any extra money to invest and have a car loan at 7%. I can contribute up to $4000 during the 6 months. “So, what do you think? Am I better off staying out of the plan as my wife thinks or am I stupid not to be investing to the hilt, as my co-workers say?” Well, I wouldn’t use the word “stupid,” but it does sound like a very good deal. And if you’re worried about a repeat of 1987, you could even buy puts to hedge your bet while you wait for the stock to arrive after you pay for it.