Jack recently sent me this link listing eight firms where employee morale is low. The title of the article is "Companies Where Employees are Losing Hope." His email message had the subject line, "Sell if you have any of these." The eight firms are:
- Best Buy
- Research in Motion
- Talbots
- Hewlett-Packard
- US Postal Service (can people sell stock in this?)
- Nintendo
- Cisco
- Eastman-Kodak
But read the article to see why they are listed.
My response, relying on the Efficient Markets Hypothesis was:
Oops. Too late. All the smart money and all the quick traders who had access to this information long before I saw it have already sold the stock. Many have probably even sold it short. As a result the share prices have probably, on average, fallen already to where they belong (in some fundamental sense), and there are no gains left for me to earn and no more losses for me to avoid. All this information (and more) is already captured in the current prices of these stocks. Furthermore, if I had owned any stock in these firms, I would already have suffered a capital loss. Selling now is likely to be no more profitable (or loss avoiding) than selling any other stock.
Which is why I advocate holding index funds for nearly all of us who want to have some equity in their portfolios.