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Stock Change - The highs and lows of KuteLuvr

About Stock Change

Previous Entry Stock Change Jul. 14th, 2005 @ 10:47 am Next Entry
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From:kuteluvr
Date:July 14th, 2005 11:57 pm (UTC)
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I get what you're saying, but I look at it from a different perspective...

HP's stock is the only thing I track regularly, and have any faith in understanding is going to go up or down... it's something that I've watched so much over time (it helps that it's on the front page of our intranet homepage) that I think I "get". Because of that, I use it as a money-making tool when I think it's going to be effective. When I feel the stock is riding high, it might still make sense for me to have a high investment in the ESPP, since, regardless of the move, I'm going to make 15% off the top... but I don't babysit it so close that the minute the plan purchase happens I can resell it.

The way our plan works, you get the lowest of either the price at the beginning or end of the period, and 15% off of that. Either way, I make money... but if the price is $18 at the beginning of the period, and $25 at the end, I can make more money by investing when I believe the price at the day of purchase will be significantly more than the lowest of the two prices. I find that I'm much more interested in investing in the stock when I feel it's more likely to make me double the money than I am when it's only going to make me 15% (assuming it doesn't go down between the purchase and the execution of my sale request). In the meantime, if I have things that are costing me money in the meantime, I'd rather reduce debt (which I understand it isn't cost effective to rack up anyway) than to hold the money elsewhere with the understanding that it's going to make 15%.

This really boils down to different ways of managing personal finances. It's easy to see that there's a right way and a wrong way, but even people that do it "the right way" lose money... so it's a gamble either way. This way, I feel I'm making an educated decision... it makes me feel more in control, and provides a more immediate ROI.

For long term investments... things that I'm just not looking to make a buck... retirement... I have my 401K, which I invest heavily in, and manage based on my perception of markets and recent and sense of possible fund performance. That has a fairly balanced view, and I've done pretty well at not losing a ton of money (I lost almost nothing at the bust, for example, because I felt the economy was riding high, and I moved everything into mutual funds and bonds).

I see the ESPP as a way to make some quick cash with a fairly guaranteed return... but I don't feel it's worth it unless the return is going to be significant. If it's not going to be a really good return, it's worth taking my paycheck and enjoying it or paying things off, rather than wait for 15%. It may not result in more money, but it provides me with a stronger sense of personal value in my paycheck... and that is a very individual thing.

(We may be saying similar things, and/or come to the same conclusions, even if our perspectives in the process of getting there are different though :))
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