Interesting story heard today. Guy works for a good solid transportation

[Thickasabrick]

company. Profits are good - increased over year ago, etc. But...because of the "perception" out there, the company's stock is tanking....not because of the company not being profitable but because of the "fear".

So what are they doing? They are going to layoff people to "demonstrate" that they are serious about cutting costs to make the stockholders happy - even though they are profitable. How fucked up is that?

I wonder how many other companies are just like this?

[tangent90]

1. What's the company? Why wouldn't you identify it?

:eyes:

[Thickasabrick]

2. Well, it's not my company and I don't think he would appreciate me

blabbing all the details on a public board. My point was that this was the first time I realized that actual "fear" was playing a significant role in all this.

[amandabeech]

3. Lemming-like behavior in humans is not unknown.

There is a lot of panic out there and a lot of people are taking money out of the market, including out of mutual funds.

Those redemptions will continue for awhile, and mutual funds will sell those stocks that are worth the most, including the stock of your friend's company.

What I think will happen is that sometime this year the complete panic will subside, and withdrawals will taper off.

At that point, investors, be they mutual funds, state pension funds or folks with 401k's will start looking around for bargains.

Then the stock of well-run companies will go up, and the market will stabilize at some level below the bubble high, and then edge up.

Unfortunately, brokerages that follow your friend's company may start screaming for cuts in employment in the meantime. Smart management will ignore them and hang onto good people, and it sounds like your friend's company has at least reasonably astute folks in charge.

If I were your friend, I would brace myself as best I could for a bout of unemployment sometime in the next year and a half.

Things will get better. The last severe recession, the low point of which was 1982, did not last for years and years. I was looking for my first job out of school then, and I did find something. Things improved, and by '85 I had a much better job. I think that this recession will go about the same.

[TexasProgresive]

4. Just so you know

lemmings don't behave like humans are even sheep. It was humans (Disney) who stampeded the lemmings off the cliff for their film. Check it out at snopes.com.

Now we humans are quite capable of following the herd over a cliff.

[amandabeech]

6. Thanks! A light point to my day! n/t

[Thickasabrick]

5. Thank you. Your post is very encouraging and I'm really interested

in hearing from people who don't think we will be in a depression for the next decade. Will pass this along.

[amandabeech]

7. You're welcome.

We will pull out of this.

It won't happen right away, but I don't think that it will take a decade for things to start improving. Really.

[tangent90]

12. Well it's apparently a publicly traded company so their financials are public record.

I don't think simply identifying it would violate any SEC rules...

[Horse with no Name]

8. Well to start with (transporation company and all)

Profits are better from a year ago because of the gas prices.
Most companies increased their prices to make up for the $4/gallon gas, yet now that it is back down under $2, have not decreased their prices. So, that is why his profit margin is higher.
Seriously--this "guy" sounds like someone who sips the Koolaid and is out there spreading fear because of his desire to see Obama fail.

[rvablue]

9. Microsoft did the same thing. It sucks! n/t

[killbotfactory]

10. A corporation can never generate enough profit

There is no limit to the amount of profit shareholders expect to make from a company, they want the rates of profit to constantly increase.

[bertman]

11. You are exactly right, killbotfactory. That's why we're in the frickin' mess we're in now.

[leftofthedial]

13. happens all the time

the stock market is a con game.