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Chapter 13. Sell, Sell, Sell! > Not a Smart Thing to Do

Not a Smart Thing to Do

Entrepreneurs were not the only ones who ended up holding the small end of the stick. The other big losers were small investors who bought shares at valuations that made no sense.

In a previous chapter we discussed how the bubble was funded largely by retirement plans. When the bubble burst, many people were left without savings. For example, two middle-aged women working in clerical positions at a New York financial services firm placed their entire 401(k) retirement savings in annuities with a major mutual fund, believing that because it was a large, well-known firm, their savings were secure. But much of the fund in which they were invested had been placed in Internet stocks. When the bubble burst and the value of their fund began to decline, they did what they'd been told to do—stay invested for the long term. After 12 months their savings were almost gone, and still they held on, saying that they would sell when the technology companies in which they'd been invested regained their share prices of the past. Finally their employer told them that this would never happen, and they began to realize that their nest eggs were gone for good. These working people, and millions like them, had become the road kill of capitalism.


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