Comments on: The Wonderful World of Employee Stocks, Part 3: Don’t Poo-Poo Your ESPP http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/ Adding a punchline to your bottom line Fri, 21 Nov 2008 11:55:33 +0000 http://wordpress.org/?v=2.6.2 By: Peter Answers http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-187386 Peter Answers Sun, 01 Jun 2008 01:15:45 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-187386 It takes about a week for my shares to hit my account so at the end of the period I calculate how many shares my ESPP will buy and I short that amount - I then cover with the shares when they hit my account. By doing it this way I have ZERO risk and lock in the return. It takes about a week for my shares to hit my account so at the end of the period I calculate how many shares my ESPP will buy and I short that amount - I then cover with the shares when they hit my account. By doing it this way I have ZERO risk and lock in the return.

]]> By: My Company ESPP Has Become My New Property Tax Escrow | Prime Time Money http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-187082 My Company ESPP Has Become My New Property Tax Escrow | Prime Time Money Fri, 30 May 2008 19:42:43 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-187082 [...] pro-ESPP post, ”the wonderful world of employee stocks” (@ Punny Money), which basically says at the 15% discount I’m getting, I’d be [...] [...] pro-ESPP post, ”the wonderful world of employee stocks” (@ Punny Money), which basically says at the 15% discount I’m getting, I’d be [...]

]]> By: PT http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-186960 PT Fri, 30 May 2008 04:17:09 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-186960 Thanks for the info. My company is offering a 15% discount over 6 months. That's a great return. I'm siging up tomorrow and using this as my unofficial property tax escrow. Thanks for the info. My company is offering a 15% discount over 6 months. That’s a great return. I’m siging up tomorrow and using this as my unofficial property tax escrow.

]]> By: Anonymous http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-39 Anonymous Fri, 10 Feb 2006 23:55:00 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-39 tee hee hee. people that think they can predict stock prices make me laugh (e.g. describing a stock as flat/stagnant). if you really think the prices are predictable why even worry about discounts, just trade trade trade. while IBMs price may have been pretty stagnant in the past, i can't see how anyone could state with any confidence that IBMs price couldn't jump UP or DOWN in the next 6 months if you want to make a rational decision, why not just assume that you cannot predict whether IBM is going to outperform any other stock on a risk-reward basis. Then recognize there's a huge amount of risk holding a large stake in an individual stock instead of holding a diversified portfolio. so holding IBM = roughly same expected return but much more risk than diversified portfolio. So that 5% discount must be weighed against the 6 months of excess risk taking. but then again, if you hold for 6 you should probably go the full 12 to get the favorable cap gains treatment (which you would have received anyway if you'd just invested in a diversified portfolio for 12 months). Provided you're not tying up a large chunk of your assets, the 5% discount may just offset the excess risk you are taking, but its a close thing in my book. tee hee hee. people that think they can predict stock prices make me laugh (e.g. describing a stock as flat/stagnant). if you really think the prices are predictable why even worry about discounts, just trade trade trade. while IBMs price may have been pretty stagnant in the past, i can’t see how anyone could state with any confidence that IBMs price couldn’t jump UP or DOWN in the next 6 months

if you want to make a rational decision, why not just assume that you cannot predict whether IBM is going to outperform any other stock on a risk-reward basis. Then recognize there’s a huge amount of risk holding a large stake in an individual stock instead of holding a diversified portfolio. so holding IBM = roughly same expected return but much more risk than diversified portfolio. So that 5% discount must be weighed against the 6 months of excess risk taking. but then again, if you hold for 6 you should probably go the full 12 to get the favorable cap gains treatment (which you would have received anyway if you’d just invested in a diversified portfolio for 12 months). Provided you’re not tying up a large chunk of your assets, the 5% discount may just offset the excess risk you are taking, but its a close thing in my book.

]]> By: Nick http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-38 Nick Thu, 26 Jan 2006 02:50:00 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-38 RS, since you can't immediately sell your stock unless you want to get kicked out of the plan, the 5% discount isn't going to do you much good. Couple that with a flat stock price, and I'd say you're better off seeking more diversity than an ESPP can offer. RS, since you can’t immediately sell your stock unless you want to get kicked out of the plan, the 5% discount isn’t going to do you much good. Couple that with a flat stock price, and I’d say you’re better off seeking more diversity than an ESPP can offer.

]]> By: RS http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-37 RS Wed, 25 Jan 2006 22:02:00 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-37 I have such a hard time deciding what to do with my ESPP. As you mentioned, we now only get a 5% discount...so would I be better off taking the money that I would have put into my stock plan and moving that towards my 401(k) or even putting it in a Roth IRA each month? On one hand a 5% discount is almost like free money, except that IBM stock has been stagnant for years now. I have such a hard time deciding what to do with my ESPP. As you mentioned, we now only get a 5% discount…so would I be better off taking the money that I would have put into my stock plan and moving that towards my 401(k) or even putting it in a Roth IRA each month?

On one hand a 5% discount is almost like free money, except that IBM stock has been stagnant for years now.

]]> By: Nick http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-36 Nick Wed, 25 Jan 2006 02:54:00 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-36 Oddly enough, this was the easiest column title I've come up with so far. Some others have taken longer to think up than writing the actual column. Oddly enough, this was the easiest column title I’ve come up with so far. Some others have taken longer to think up than writing the actual column.

]]> By: Caitlin http://www.punny.org/money/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-35 Caitlin Tue, 24 Jan 2006 18:15:00 +0000 http://www.punny.org/uncategorized/the-wonderful-world-of-employee-stocks-part-3-dont-poo-poo-your-espp/#comment-35 Ah...nothing like a good scat pun to start the day! Ah…nothing like a good scat pun to start the day!

]]>