Whose responsibility is it when your investment in Facebook or Morgan Stanley declines in value? The company? A broker?
Certainly you’re not to blame.
The current proliferation of lawsuits against these companies makes me ask a straightforward question. Should there be lawsuits against Facebook and Morgan Stanley? (See these articles for more information if you don’t know what I’m talking about: Forbes: Facebook Lawsuits Piling Up.)
I’m reminded of society’s lack of personal responsibility each and every time I drive up the highway to see my mom. I haven’t added all the advertisements up, but there is a certain personal injury lawyer in our town who advertises everywhere. I don’t know this lawyer intimately, but my wife works in the same office building and sees the people who come in and out of the front door. There are all sorts of people trying to sue for anything under the sun. Instead of trying to take over the world, they’ll just take it from someone else, because somehow, they’re “owed” something.
One of my favorite books is The Road Less Traveled by M. Scott Peck, M.D. That book contains my favorite quote from any book:
We cannot solve life’s problems except by solving them. This statement may seem idiotically tautological or self-evident, yet it is seemingly beyond the comprehension of much of the human race. This is because we must accept responsibility for a problem before we can solve it. We cannot solve a problem by saying “It’s not my problem.” We cannot solve a problem by hoping that someone else will solve it for us. I can solve a problem only when I say “This is my problem and it’s up to me to solve it.” But many, so many, seek to avoid the pain of their problems by saying to themselves: “This problem was caused me by other people, or social circumstances beyond my control, and therefore it is up to other people or society to solve this problem for me. It is not really my personal problem.”
This is as true in the investment world as anywhere. As an investor, you must accept responsibility for your own investing decisions. You cannot blame others for your decisions (or indecisions). You won’t help your cause with a “I’m mad I made a bad decision in investing so I wanna sue everyone” mentality. Recent lawsuits against Facebook and Morgan Stanley make me crazy – I don’t believe for a second that if some magical prospectus would’ve fallen from the sky that all these people wouldn’t have bought Facebook stock. There’s all this talk about how Morgan Stanley screwed everyone and how Facebook lied — why didn’t these people do their own research? Take some personal responsibility! I’m pretty sure that had Facebook stock gone from $38 to $75 in one day, Morgan Stanley would not have called all the new shareholders and said “Oops, we priced this incorrectly so we need to sue you to find a more correct price.”
As an investor, you and you alone are responsible for the actions and outcomes of your investing decisions. Whether you have an advisor, a consultant, or are a DIY’er, remember one thing: it’s your money.
Be accountable for it.
These are more reasons to keep me out of the individual stock game. I just see the deck stacked so heavily against me. It’s a shame that the IPO was ruined by Nasdaq; that will be an interesting story to watch unfold.
But was the IPO ruined by NASDAQ? The opening might have gone better, but in the following days Facebook stock traded based on its value to investors. Clearly, investors don’t value Facebook stock as highly as MS and Facebook perceived initially.
While a smooth opening day would have been nice, investing, like baseball, I think of as a marathon. You can win on opening day with a really crappy team.
I think you misunderstand. I am solving a problem, just not the same problem you think I should be solving. I’m solving the problem of “I’m poor” or at least “I’m not rich” by suing someone whose pockets are much deeper than mine. It seems very logical to me…
It certainly seems to be easier than the lottery, Erin…..
Not easier. It’s a little more work, actually. But the odds are better.
Well put, Joe. I also wondered why there wasn’t much focus on personal accountability in the news. I guess a news story is just a lot more interesting if there’s someone to blame.
It’s my responsibility as an investor to make wise decisions. I am accountable for the success or failures of actions I choose to take. I don’t think that Facebook, Morgan Stanley or my broker has any responsibility for my stupidity.
Amen said the choir, Shilpan!
You’re beginning to sound like Penzo with all this personal responsibility stuff.
You are exactly right about the lawsuit business, it might as well be called Lottery 2.
I do think Morgan Stanly and Facebook together screwed up the pricing. They gave the process of an IPO a black eye by over-reaching because of the perception that rabid Facebookers would buy the stock at any price just to have braggin rights.
I’ll have to make sure OG stops this if he’s sounding like Penzo! While I agree with the pricing, did it affect someone’s buying decision? If so, do we sell Barnum and Bailey when they hype a circus act?
It is ridiculous how often people blame others for their problems or mistakes. Very few people own up to anything these days…we’re always passing the buck.
Isn’t that sad? I’m not sure why we do it either….I certainly don’t feel any better when I blame other people for my problems. Actually, Jason, I feel awful when I do that. Is it nature or nurture that creates that reaction in me?
Great post, I remember coming to the US as an 18 year old and there was a separate yellow pages for lawyers and thinking ‘wow, that’s so wrong’
I think there is an area of due care that must be provided but the more we try to shelter people, the more we enable their reliance on that shelter
Ha! “that’s so wrong.” It’s funny how that “outside” perspective is so dead on, Vincent….at 18 you saw “welcome to the US, where we’ll sue the $#%! out of you.”