The UnIntelligent Investor

today’s Wall
Street Journal
comes an article about two guys who just
don’t get it. One, Jonathan Wurfel of Rolling Meadows, Illinois,
doesn’t seem to understand even the most rudimentary thing about
being an investor in common equity. “Should common shareholders now
serve as the final scapegoat for others’ flaunty egos and suffer a
total and complete loss?, he asks the Federal Bankruptcy Judge.
YES, that’s what common equity is, the last place money goes after
lenders get paid on their claims.  The people from whom CIT borrowed money
accepted stock in lieu of cash.  That’s
the way it works when
you owe more than you can repay.  That’s the definition of
“bankrupt.”  If there’s no equity, owners get nothing. You,
Mr. Wurfel, were and owner and you get nothing. In a fitting piece
of irony, Wurefl’s letter head is reported to be adorned with an
image of Wile E. Coyote from Looney Tunes.  I would have
suggested Porky Pig.  “Abedee, abedee, abedee That’s all
folks!” This is why people know there’s money to be made in the
stock market.  You’re not picking company stocks, you’re
taking money from fools.e

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