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Stock Brokers Going Broke
International Forecaster ^ | 31 August 2002 | Bob Chapman

Posted on 08/31/2002 10:55:16 AM PDT by shrinkermd

We are terribly sorry to say our prediction of April 2000 of 50-70% of stockbrokers and stock brokerage firms going under before the bear market is over is sadly coming true. Broker commissions are off 80% and payout has been dropped to 23-35%. We hear many stories of alcohol and drug abuse, and suicide and many of these young men and women, who found transitory fame in their 20’s smashed on the financial rocks.

The cool bachelor pads of the 1990’s have given way to one-room studios in the suburbs. They now struggle through life in menial jobs trying to get their lives and futures together again. Needless to say many have totally lost hope in the system. You might say what goes around comes around. No one ever told these poor souls what goes up must come down and usually does so when you least expect it. 29 months of a bear market has certainly taken its toll.

We figure that if the Plunge Protection Team hadn’t been manipulating the market the Dow would now be near 5500-6000. It is stupefying to review all the scandals, bankruptcies and poor earnings and try to understand why the Dow isn’t 3000 points lower. We guess we’ll have to wait for the real estate, credit and derivative bubbles to break. As we have seen, deregulation has been a nightmare particularly since the Glass-Steagal Act was terminated. Wall Street brokerage firms, investment banking firms and banks have simply run amok. Its no wonder brokers have depression rates over four times the national average.

Its no wonder since brokers who made $100,000 to $3 million a year are out of work. Those left are making 20-35% of what they took home just three short years ago. It now seems like a lifetime ago. We see thousands of arbitrations and lawsuits. Strategists, analysts and bankers have been completely discredited. Worse yet, those of this group who warned of the impending problems have been shuffled into the background or fired. Wall Street and the banking community have fled under fire and are still fleeing and the battle of truth is only 1/3 of the way to being fully discovered. We can tell you that Wall Street won’t be the same again for many years to come.


TOPICS: Business/Economy
KEYWORDS: brokers; doom; gold; goldbugs; recession; stocks
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This is a small excerpt of Mr. Chapman's 50 page, most recent report. I enjoy paying for his services; however, unless you can tolerate big doses of conspiracies from time, you will be put off. He uses inductive reasoning for his investment conclusions and deductive reasoning for his conspiracy and political views. In abbreviated form, sans stock advice, he is usually published again in LeMetropole Cafe. '
1 posted on 08/31/2002 10:55:16 AM PDT by shrinkermd
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To: shrinkermd; Orual; aculeus; general_re; Poohbah; BlueLancer
We are terribly sorry to say our prediction of April 2000 of 50-70% of stockbrokers and stock brokerage firms going under before the bear market is over is sadly coming true.

I am terribly sorry to say that I don't believe he's sad about it.

Struggling-one-room-studios bump.

2 posted on 08/31/2002 11:10:21 AM PDT by dighton
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To: dighton
Notice how there are NO sources for the claim that commissions are down 80%? Ditto with the reports of alcohol and drug abuse; ditto with the reports of suicide.
3 posted on 08/31/2002 11:14:45 AM PDT by Poohbah
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To: dighton; aculeus; general_re
It's no wonder since brokers who made $100,000 to $3 million a year are out of work.
4 posted on 08/31/2002 11:23:41 AM PDT by Orual
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To: Orual
They would not be in bad shape if they had saved some of their earnings. Or do you think they invested themselves in the stocks they were recommneding? Nah, they couldn't have been that dumb...
5 posted on 08/31/2002 11:27:11 AM PDT by proxy_user
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To: Orual
A lot of people would be very happy to make $1 million during their entire lifetimes.
6 posted on 08/31/2002 11:33:52 AM PDT by Dog Gone
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To: shrinkermd
The cool bachelor pads of the 1990’s have given way to one-room studios in the suburbs. They now struggle through life in menial jobs trying to get their lives and futures together again.

Holy schadenfreude Batman!

7 posted on 08/31/2002 11:38:16 AM PDT by Mentos
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To: shrinkermd
Not only are Brokers earning less, so are their employers, which causes them to cut back in things they do - which means other companies that do business with brokerages have less business - and people end up unemployed. People like me for example...
8 posted on 08/31/2002 11:43:36 AM PDT by Keith in Iowa
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To: shrinkermd
This guy sounds so bitter. Who pissed in his Wheaties?
9 posted on 08/31/2002 11:45:37 AM PDT by Isle of sanity in CA
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To: shrinkermd
Why don't they enlist in the Army? In a year or so they can be in Afganistan or Iraq or Kosovo making 20 grand a year, full benifits.

Friggen yuppie pukes.
10 posted on 08/31/2002 11:50:02 AM PDT by Leisler
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To: Leisler
I hate to break it to you, Buckwheat, but the author is all wet. While my income is down, I’m still making more money than 95%+ of Americans. By the way, I am not a Yuppy … or a puke. You sound bitter. You need a hug.
11 posted on 08/31/2002 12:48:11 PM PDT by moneyrunner
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To: moneyrunner
By the way, I am not a Yuppy … or a puke.

Exhibit A. "While my income is down, I’m still making more money than 95%+ of Americans.

Exhibit B. "moneyrunner"

I'll take you at your word, you're just a plain old, boorish greedhead.

12 posted on 08/31/2002 12:59:39 PM PDT by Leisler
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To: Leisler
Hey, Buckwheat, I’ll OWN that place on the beach you’re fantasizing about. How are you going to get yours? Your good looks or your winning smile?
13 posted on 08/31/2002 1:05:06 PM PDT by moneyrunner
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To: moneyrunner
What's a good online source of gauging where one's annual income ranks one, percentile-wise, in the overall U.S. population please?
14 posted on 08/31/2002 1:13:50 PM PDT by End The Hypocrisy
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To: moneyrunner
Thanks for exhibit C.

You sound a little bitter about good looks and winning smiles. I won't mention charm.

Sadly, you only have one place on the beach? Most economically successful people I know have two, one up north and the other down south. Keep grinding.
15 posted on 08/31/2002 1:18:06 PM PDT by Leisler
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To: Mentos
Holy schadenfreude Batman!

I'm stealing this line, I hope you don't mind. Too funny! Too useful. Many thanks.

16 posted on 08/31/2002 1:29:04 PM PDT by muleboy
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To: Leisler
I find ego, insecurity and income such an obnoxious combination. Moneyrunner appears to be a less-than-clever example of this.
17 posted on 08/31/2002 2:57:33 PM PDT by WoofDog123
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To: moneyrunner
This guy has no idea how brokers make $$$. He thinks they get rich when the market goes up. Not necessarily true.

Here's a hint for him: Friday's NYSE volume was about 900,000,000 shares.

18 posted on 08/31/2002 3:05:20 PM PDT by Senator Pardek
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To: Senator Pardek
Now, now, now, you're talking far too much common sense.
19 posted on 08/31/2002 3:09:57 PM PDT by Poohbah
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To: Poohbah
That's why they keep me here.
20 posted on 08/31/2002 3:12:24 PM PDT by Senator Pardek
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To: Senator Pardek
That's why they keep me here.

Ah-HA! You're obviously one of THEM! Probably a Trilateralist, a member of the CFR, the Bild-A-Burgers (with bacon and cheese), the Committee of 300, the Freemasons, the Kiwanis and Rotary Clubs, and all of the OTHER secret conspiracies! :o)

21 posted on 08/31/2002 3:15:26 PM PDT by Poohbah
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To: shrinkermd
We hear many stories of alcohol and drug abuse, and suicide and many of these young men and women, who found transitory fame in their 20’s smashed on the financial rocks.

In the great tradition of the Bully in the Simpsons: Ha ha!

Tuor

22 posted on 08/31/2002 3:23:30 PM PDT by Tuor
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To: Senator Pardek
Surely you admit that personal stock brokers are being laid off in droves as more and more people bypass them to trade on-line.
23 posted on 08/31/2002 3:32:16 PM PDT by Southack
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To: Southack
I do - but the author suggests it is due to a downturn in the equities market, which we both know is not the case.
24 posted on 08/31/2002 3:37:52 PM PDT by Senator Pardek
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To: proxy_user
They would not be in bad shape if they had saved some of their earnings. Or do you think they invested themselves in the stocks they were recommneding? Nah, they couldn't have been that dumb...

I remember a cousin of mine trying to sell me a stock
I asked him how much he owned

End of conversation
25 posted on 08/31/2002 3:42:39 PM PDT by uncbob
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To: shrinkermd
Its no wonder since brokers who made $100,000 to $3 million a year are out of work.

My advice to these dudes & dudettes is to get off the pity pot and switch careers. Go into MLB where the AVERAGE annual wage is $900,000 plus you have a union that provides job security even if you suck ;-)

26 posted on 08/31/2002 3:50:36 PM PDT by varon
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To: Senator Pardek
I couldn't help egg moneyrunner on.

Na, I wouldn't know what Grants Intrest Rate Observer or IBD was, if my life depended upon it. I wouldn't know how to short a stock just to cover myself. That would be too hard. I keep to vice stocks. Vice seems to do a steady buisness year after year, and I know it. Enron, the dot com., I could never figure out what they did plus all that" no money this year bit". I am too stupid.

What it is that I don't like is professionls, as in the article, supposedly, having to tough it out.
27 posted on 08/31/2002 3:59:14 PM PDT by Leisler
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To: Senator Pardek
In respect MER the findings are:

NEW YORK (Reuters) - Profits at securities firms fell 29 percent in the second quarter as stocks slumped, and an earnings rebound isn't coming until next year, a U.S. industry trade group said on Thursday.

Brokerages and investment banks earned $2.0 billion in pre-tax profits in the second quarter, the third-worst quarter in three years, according to the Securities Industry Association, which represents more than 600 firms.

The trade group predicted a $10.0 billion profit for 2002, compared with $10.4 billion last year and $21 billion in 2000.

"With little hope for any revenue improvement near term, cost cutting, mainly employment and compensation cuts, will remain the main tool to simply maintain today's thin margins," George Monahan, director of SIA industry studies, said in a report.

The SIA is forecasting 2003 industry profits of $12.5 billion.

Big firms like Merrill Lynch & Co. Inc. (NYSE:MER - News) and Morgan Stanley (NYSE:MWD - News) are hurting as the 2-year bear market has choked off lucrative stock underwriting and merger advisory deals. Bond offerings, which have bolstered results somewhat, are also starting to dwindle.

Analysts have begun to cut their earnings estimates for the upcoming third quarter, as activity in the traditionally slow summer months has been more anemic than usual.

"Both equity and debt origination dropped significantly (in the third quarter), reversing improved results from the first and second quarters," Prudential Securities analyst Dave Trone said in a research note on Wednesday.

The industry has already cut 54,000 jobs since the beginning of 2001, but more layoffs are likely on the way.

"Layoff announcements are now occurring among those firms that tried to maintain employee talent for the expected rebound which is not likely to occur in any meaningful fashion for the near-term," Monahan said.

In respect to the discount brokers, Charles Schwab is the largest. Their problems are highlighted below:

SAN FRANCISCO (Reuters) - Discount broker Charles Schwab Corp.(NYSE:SCH - News) on Monday said it will lay off 375 employees, or about 2 percent of its staff, and close its Austin, Texas, customer service center, to slash costs in the prolonged stock market downturn.

San Francisco-based Schwab, the biggest U.S. discount broker, expects to take a $36 million charge in the third quarter, but cut 2003 operating costs by about $26 million. Schwab said it also plans to consider other steps in the next few months to reduce expenses by $200 million a year.

Sharp declines in stock prices sidelined Schwab's investors, knocking its profits, revenues and trading volumes. A string of U.S. corporate accounting scandals shook investor confidence in Wall Street, making them dump stocks. Customer trading volume dropped 20 percent in the second quarter, and the company's total client assets fell 7 percent after the stock market downturn damaged investor portfolios.

"These conditions, fueled by the continuing investigations of corporate accounting and governance practices at certain firms, have put ongoing pressure on our financial performance and deepened our belief that the environment in which we operate may continue for some time," Chairman and co-Chief Executive Charles Schwab said in a statement,

Schwab, which earlier this month put out a memo forecasting more job cuts from its staff of 19,100, had axed 25 percent of its work force last year in a restructuring. Schwab also shed about 490 jobs in the first half of 2002. Schwab Chief Financial Officer Christopher Dodds last month told Reuters the company would likely end the year with about 18,000 employees.

Shuttering the Austin center would eliminate about 300 jobs. In addition, Schwab said it is cutting about 75 support and administrative jobs at four other client telephone service centers located in Denver, Indianapolis, Orlando and Phoenix.

Over the next 30 to 60 days, Schwab said it executive committee will consider further actions -- including more job cuts and cuts in discretionary spending.

IMHO the retail trade of the brokers has been decimated. Chapman's figures could be on the high side, but, most likely, they are not. The cuts in the brokerage industry have hit the traditional, large brokers as well as the discounters. It would seem the public has a problem with the losses, volatility and all the gossip about the market "being rigged." For these reasons, the retail buyers--individual investors and small retirement accounts --are abandoning the stock market wholesale!

28 posted on 08/31/2002 4:35:22 PM PDT by shrinkermd
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To: shrinkermd
As I stated, the NYSE volume on Friday was 900,000,000 shares. Who's processing these orders and sending them to the floor?
29 posted on 08/31/2002 4:39:30 PM PDT by Senator Pardek
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To: Senator Pardek
"As I stated, the NYSE volume on Friday was 900,000,000 shares. Who's processing these orders and sending them to the floor?"

A couple of weeks ago I noted a report that 44% of all trades on the NYSE that day were program trades (over 1 Million per trade);furthermore, they only counted the smaller financial houses and did not include either JPM or C. This probably means that on any given day half of all the trades are "wholesale." Add in the market makers, those reconciling index options and I think there is a minority of retail trades going on.

30 posted on 08/31/2002 5:20:56 PM PDT by shrinkermd
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To: shrinkermd
Stock brokers make money based on the volume being traded whether the stocks go up or down doesn't affect their commisions( well only to the extent that people sour on the market aren't trading).
31 posted on 08/31/2002 6:58:28 PM PDT by weikel
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To: weikel
"Stock brokers make money based on the volume being traded whether the stocks go up or down doesn't affect their commisions( well only to the extent that people sour on the market aren't trading).

This is true, but the problem is the majority of trades are probably "wholesale" trades with substantially reduced commissions paid to the brokerage house and not to an individual broker who depends on the "retail trade" which is you, I and most investors. Wholesale trades are usually a million plus and instituted by a computer program. My contention is, reading Chapman and the two articles I posted under comments, that brokers are going broke and disappearing en masse from brokerages.

32 posted on 08/31/2002 7:15:31 PM PDT by shrinkermd
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To: moneyrunner
Watch out. They talk about people like you in University classrooms!
33 posted on 08/31/2002 7:35:50 PM PDT by oldtimer
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To: shrinkermd
some amount of the retail listed business goes on in various third markets (I think trimark (nite-owned) is the largest in volume, there are a number of others, many actual floors, i.e. philadelphia, boston, chicago/midwest, Pacific (where i dont know). I don't think Island is signifgant in any listed issues except the amex-listed index stocks); in any event, this volume is not represented in NYSE volume numbers.

most discount brokers will NOT route a listed order to NYSE, even if you raise a fit. Some route to the most penny-ante exchanges (i.e. boston, where they may have done 5 trades all day in your issue, presumably most from your same broker). Trimark used to honor nyse size for auto-executions (maybe they still do for some customers).

34 posted on 08/31/2002 11:35:59 PM PDT by WoofDog123
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To: weikel
Customers that get their clocks cleaned trade less, have less capital to trade, hold their losers, buy conservative boring things, leave the market, and in general provide less revenue to brokers than customers who are net making money. So while for a given trade a broker gets paid regardless, how that trade works out, as well as how the broker has done for the customer and how the customer has done overall (with all accounts, not just the one the broker has) will affect how much business the broker gets greatly.
35 posted on 08/31/2002 11:39:16 PM PDT by WoofDog123
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To: Dog Gone
I am working on my second million...gave up on my first...LOL

It ws grate to meet you in Vegas Mr. Chaney...

36 posted on 09/01/2002 12:17:12 AM PDT by Syncro
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To: shrinkermd
Sounds like the extent of Mr. Chapmans education in Wall Street, came from watching the Oliver Stone movie.
37 posted on 09/01/2002 12:45:33 AM PDT by dfwgator
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To: dighton; Poohbah; Orual; aculeus
This article is Chapman's bait. Here's the hook underneath it - "We are still in the embryonic stages of the biggest increase in the price of gold in history."
38 posted on 09/01/2002 2:31:59 AM PDT by general_re
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To: Senator Pardek
Just got up and wanted to see who the peasants were shaking their pitchforks at. [grin].

”This guy has no idea how brokers make $$$. He thinks they get rich when the market goes up. Not necessarily true. Here's a hint for him: Friday's NYSE volume was about 900,000,000 shares.”

Most people have no real idea bout how the brokerage business works today. They thing a modern broker is one that feeds his clients an endless stream of hot stock tips. Those brokers exited the business a few decades ago.

The modern broker creates financial plans (roadmaps?) for his clients designed to accomplish various life goals: buying the fist house, college education for the kids, retirement income, estate planning, multi-generational transfers, etc.

I’ll get to he issue of on-line trading vs. full service investing in a later response.

39 posted on 09/01/2002 5:58:31 AM PDT by moneyrunner
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To: Southack; Senator Pardek
” Surely you admit that personal stock brokers are being laid off in droves as more and more people bypass them to trade on-line.”

Actually, no, not if you define personal brokers as brokers in full service firms. Many brokerage firms are reducing staff, but the staff being reduced is support staff such as back office personnel. Discount and on-line firms have seen the biggest reductions in “brokers” being laid off. This is because of the financial structure of the business. Brokers in discount firms are a cost center; in a full service firm they are a revenue center.

Discount firms saw a huge increase in volume during the ‘90s when everything was going up and the average investor began to believe that they could “do it themselves.” Why pay $100 to buy Lucent though a full service firm when you could do the same trade for $5 on-line, or $25 through Schwab?

The only problem was that your on-line or discount firm never cautioned you about Lucent’s P/E ratio in January of 2000. And CNBC had wall-to-wall buy recommendations on every dot.com stock.

True story: the guy who owns the gas station I frequent asked me about 5 years ago to suggest an investment program for him and his wife. I asked a few questions and made a few suggestions. They decided that I was being too conservative and opened an account on-line. After getting sucked into the Tech bubble and making a few bucks, they are now $200,000 in the hole. But they can proudly say that they did it themselves and the cost to lose 200 grand was very small. But are they giving up? No way. They are now “handcuffed to a corpse.”

So what are the discount and on-line firms now doing when the speculative bubble burst and the day-traders go back to driving trucks? Well, they have to get rid of their people before they shut off the lights.

The truth is, the wealthier people become, the more they rely on professionals. You may see a multi-millionaire have an on-line account, but it’s for his “play money.” And that is why I have more job security than almost anyone working right now.

40 posted on 09/01/2002 6:27:09 AM PDT by moneyrunner
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To: shrinkermd
”A couple of weeks ago I noted a report that 44% of all trades on the NYSE that day were program trades (over 1 Million per trade);furthermore, they only counted the smaller financial houses and did not include either JPM or C. This probably means that on any given day half of all the trades are "wholesale."

This has been the case for many years. After all, how much do you think the typical mutual fund or pension fund pays to trade? Most of the volume has been institutional for many years, done at pennies a share.

41 posted on 09/01/2002 6:32:34 AM PDT by moneyrunner
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To: oldtimer
”Watch out. They talk about people like you in University classrooms!”

Do they compliment me on my wit, my good looks, my charm or my money?

42 posted on 09/01/2002 6:35:40 AM PDT by moneyrunner
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To: moneyrunner
The truth is, the wealthier people become, the more they rely on professionals.

Bingo! My wife's CPA firm predominantly caters to high-net-worth individuals and family groups. They have a couple people in a related firm (under the same roof) that do fee-based financial planning, no commissions or brokerage fees involved.

You get what you pay for. They do excellent work.

43 posted on 09/01/2002 6:56:03 AM PDT by FreedomPoster
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To: general_re; Orual; aculeus; Poohbah
This article is Chapman's bait. Here's the hook underneath it - "We are still in the embryonic stages of the biggest increase in the price of gold in history."

Exactly, which is why his sorrowful words -- terribly sorry to say our prediction ... is sadly coming true -- rang so comically false.

Let us bow our heads and recite the Goldbugs' Prayer:

"Dear Lord, please send us war, famine, pestilence and death, so thy Sacred Metal may rise above $800."

44 posted on 09/01/2002 7:45:41 AM PDT by dighton
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Comment #45 Removed by Moderator

To: moneyrunner
Moneyrunner, here is an article from the NY Post(28 July 2002) which gives anecdotal reports of the problem. It supplements the two articles --Merrill Lynch and Schwab -- that I posted previously. It would seem the brokerage business is in trouble. What do you think?

It used to be about fine dining, buff bodies and a fistful of dollars - but now it's a few beers, a knotted stomach and lots of frowns for the formerly high-flying traders of Wall Street.

In bars and restaurants across the Financial District, the scene is the same.

As the stock market plunged in recent weeks, the drinking sessions immediately after the four o'clock bell suddenly were no longer "happy" hours for the men and women whose lifeblood is tapped out by the ticker.

"I used to go straight to the gym every day after work, and now I'm drinking every night," said trader Kevin Cooke, 30, of Manhattan. "Work sucks, the money sucks, everything is just horrible right now, and I want to get drunk faster."

Cooke last week was drowning his sorrows with workmates at Fraunces Tavern - a popular hangout for those who trade on the stock- exchange floors.

The traders and brokers reminisced about last summer, when average bonuses were healthy six-figures, and sometimes more.

With a seemingly endless well of cash, they partied in the Hamptons, purchased flashy cars and tried to outdo each other with new Palm Pilots.

Sept. 11 and the corporate crisis of recent months changed all that.

Last Thursday, Cooke and his pals, whose company cannot be named for professional reasons, were coming to grips with how the money they had made that day had disappeared in the final half-hour when the market plunged.

The same story was being told down the road at Beckett's Bar & Grill, another popular watering hole for financial-types.

"My money's shrunk to a fraction of it's original worth," said Joe Bowler, 39. "And now I'm worried about my job."

At Fraunces, George Fernandez, 33, of Yorktown, said the market plunge had prompted him to curtail his wife Ellen's shopping sprees.

"I've told my wife to cut the spending," he said. "She buys anything and everything - armoires, furniture, clothes. It's out of control."

In the days when money was plentiful, Fernandez and fellow broker Sam Nifkin, 32, teamed to form a musical band called G-5. But what used to be a fun hobby has turned into necessary activity to help them relax, they said.

"I've become more aware of my musical talents - there's more important things in life than money," Fernandez said.

46 posted on 09/01/2002 8:29:25 AM PDT by shrinkermd
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To: marujo
”I assume you are a broker. Bully for you if you are making money. Please tell us if your clients are making money also.”

They are doing remarkably well, considering.

First, I truly am a financial planner. That is, I determine what my clients’ objectives are and the resources they have. I then determine how to achieve their objectives with the lowest risk. If someone comes to me with impossible objectives (e.g. “make me a lot of money with no risk.”) I refer them to someone else.

I generally deal with my clients’ “serious money.” My clients typically are either retired or planning to retire. So we determine their retirement income needs and the sources of that income (pension, social security, interest, dividends, annuities, etc.). It is almost always possible to assure their income requirements without speculating in the stock market.

That is not to say that I don’t invest in stocks. However, I don’t gamble. It’s like going to Las Vegas. You can choose to be the gambler or you can choose to be the “house.” I choose to be the house.

I counseled my clients to stay out of the technology bubble during the 1990s. Some listened and some didn’t. I have to admit that I bought some of the tech stocks after they were off by 50% or more. They went down more. The ironic thing was that the Blue Chip stocks that I favor for the equity portion of my portfolios did relatively poorly during 1997-2000 because everyone was dumping International Paper and Philip Morris to buy Yahoo and Lucent. That being said, I’m doing better than the broad averages, but still down for the last 2 years.

So the question each client must answer for himself is: is an advisor who keeps me out of serious trouble during the worst Bear market since World War 2 worth keeping? Is it worthwhile to have a trusted advisor around if I should die and my wife is faced with the challenge of making the serious financial decisions, when I’ve done it for all of our married lives? Most of my clients have answered in the affirmative.

47 posted on 09/01/2002 11:37:38 AM PDT by moneyrunner
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To: shrinkermd
The brokerage business is a cyclical business, just like autos, paper, housing and lots of other industries. It does have it’s growth component since as people get richer, they usually go for professional advice. And, despite the last 3 years, people have gotten a lot richer in the last few decades. Poor people typically change their own oil. As we get richer we take it to Jiffy Lube. When we get even richer, we take it back to the dealer.

Different people in the investment business are paid differently. The people you are reading about in the NY Post article get paid a base salary, but most of their annual income is in the form of a bonus, usually determined by the profitability of their department, or their particular contribution. Bonuses the last years have been way down.

But notice something, Fraunces Tavern is not some neighborhood dive that serves boilermakers for $1 a pop. To go there to get loaded requires some serious cash. So we’re not talking about people with minimum wage jobs here. And, yes, the yuppies in the article were probably living on the edge of their incomes and speculating in the dot.coms. Young people do foolish things. My own 24 year old son has dropped a few thousand in learning the lesson that speculation is for fools. But I let him, because you only really learn by making mistakes. The time to make mistakes is when you’re young and you have plenty of time. That’s how you become wise.

48 posted on 09/01/2002 11:53:07 AM PDT by moneyrunner
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Comment #49 Removed by Moderator

To: proxy_user
They would not be in bad shape if they had saved some of their earnings. Or do you think they invested themselves in the stocks they were recommneding? Nah, they couldn't have been that dumb

On the other hand, if they were telling all of those investors who trusted them to put their money in stocks, and did something saner with their money, that would've been really, really hypocritical.

The stock analysts deserve an awful lot of the blame. They are the ones who collected the big bucks to dig into companies and find things that diminished the value of these stocks. I don't want to see them commit suicide or become drug addicts or anything, but time spent at some menial job might give them a clue of the damage they've done to the financial security of others.

50 posted on 09/01/2002 12:28:02 PM PDT by grania
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