You win some and you lose some (whence: winsome and loathsome). My smart guy bought more at $30, so maybe he’s buying a lot more at $20 (if they manage to maintain the dividend, which the market seems not to expect them to be able to do, it would be yielding 9.7%) – but so far, all that seems likely to come of my LEAPS suggestion is a suggestion of your own that I go take a flying one. I don’t blame you.

I tend to be stubborn with these things, sometimes even doubling up after a big decline. (With all the talk of ‘homicidal maniacs,’ suicidal maniacs seem to have gotten lost in the shuffle.) This sometimes works out well, often not. A more rational strategy might be to sell for a tax loss, immediately putting the money into Something Else you think may do equally well. Ideally, this produces a short-term tax loss now and a lightly-taxed long-term gain years from now.

There’s always the risk ‘Something Else’ will then begin its own precipitous decline, just as WM – which you no longer own – snaps back. Much harder to take, psychologically, I think, than if you just watched WM go down and down. That’s one of the reasons I too often hold on to my losers.

One Something Else to consider may be Blackstone, BX, down to $23 from its IPO price of $36 this summer, part-owned by the Chinese. The Chinese could be good partners to have as the century progresses.

But with housing prices likely not yet bottomed, gasoline prices not yet topped, foreclosures rising, recession looming, and all manner of other problems (the debt we incur to occupy Iraq rather than to repair our bridges), don’t put any money into stocks you might need to pull out of stocks anytime soon. That’s always true, but certainly true today.


Scott Hoenig: ‘The Citibank account situation is even worse than you described. In February, I signed up for the ‘e-Savings’ account (online and phone signup only – nicely hidden!), when it was offering their highest rate of 5%. They wouldn’t let me keep the same account number, so I had to move my funds from their pathetic Money Market Account, and contact everyone I’ve set up with Direct Deposits to start using the new account number.

‘Month by month, the interest rate decreased, down to 4.16% now. What I didn’t know, and they made no effort to tell me, is that they created differently-branded accounts that work the same way but earn higher interest rates. There’s now an ‘Ultimate Savings Account’ with a 4.4% rate, and an ‘Ultimate Money Account’ with a 4.88% rate. (Again, you’d only see those if you looked for them on their web site – they’re also online/phone signup only.) I’d switch to those, but they’d make me get a new account number again, and I’d have to change all my Direct Deposits again. I think this is a scam. They keep changing the account ‘types’ so that they can lower current customers’ interest rates. The brand-new customers get the high rates (temporarily), and the people with open accounts at the lower rates a) don’t know there are better options, and b) even if they find out, won’t go chasing the rates due to the hassle of switching to a new account number.’

☞ Maybe they should offer a ‘Guaranteed Not-Quite-Super Money Market Rate Account’ guaranteed to pay half a per cent less than whatever is their then-highest come-on rate. You give up the 50 basis points in return for the convenience of never having to call and change accounts.

Ray Merrihew:Another example: Citi recently switched my Dividend MasterCard to a Dividend World MasterCard. No complaints there – with ‘World’ added to the name, it must be better. The problem is that I assumed I would continue receiving e-mail statement notifications. Citi can automatically change your credit card, but apparently they don’t automatically carry forward your preferences because, well, with the word world in the name, how do they know you still want them? Coincidentally, I also failed to receive my paper statement (must have been lost in the mail). So, needless to say, I was hit with a juicy late fee and finance charge. Hmmm, you almost get the feeling . . . ‘


There are a million sordid banking stories – so for balance (I like my Citi relationship, by and large), here‘s one from Chase. (Thanks, Jeff Bauer.) They jiggered a guy’s credit card date to make him two day’s late – then raised his rate from 4% to 30%.


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