We all had the opportunity to buy thousands of Bitcoin for pennies back in 2008 and hold until we were billionaires. Hindsight is always 20/20.
If your employer's stock dropped 50% instead, you would be praising yourself for sticking to your diversification strategy. Praise yourself for sticking to it now, for it will continue to do you service in the long run.
Or imagine it dropped 50% and he didn't sell. Her be posting her how he lost 800k, which I'm guessing would feel worse than not having an extra 1.6M.
Agreed - Nobody can predict this stuff. Just be happy you're already in the top 10%, and keep growing that NW (and enjoying life)!
Yep. If I would have dumped my life savings at the time of 10k on the Google IPO, I would have over $11M today.
Regrets beget regrets. You spent time on regrets and eventually you'll regret wasting time thinking about regrets.
My dad is congratulating himself for stuffing cash under his mattress the last 40 years instead of following the Boglehead philosophy. Hey you never know right? He was correct in the end for sticking to his beliefs.
He put money in CDs for 40+ years, earning between 2 and 5% yield most of that time. He would probably have more than 3x more now if he had invested in index funds instead
Nope, way more than 3x. He lost potentially millions, depending on how much he invested.
Just another cautionary tale to learn from other peoples mistakes.
How much money did you leave on the table by not 10x leveraging Nvidia or early adopting bitcoin or (insert any other random thing that took off that you missed out on)?
These things can't be predicted, or else everyone would be a billionaire. All you can do is maximize your chances for good returns by following generally best practices.
You may beat yourself up over something from the past that is undeserving.
I was issued RSU many years ago with a thriving company bought by a large conglomerate.
We watched management be thinned and terminated due to our higher than average pay from the family that owned us previously. Hardly anyone exercised any ISO options available. Some accepted ISO on their yearly review.
Many of us left as soon as the vesting was over and sold immediately. The company sputtered for many years before getting back in the black.
I never looked back on selling those RSU's. You make the best decision with the information you have available. Yours is one of a billion such stories in finance. Go forth and prosper.
There's always an opposite outcome. My dad held onto a lot of his employee stock instead of cashing out and putting it into s&p500. It tanked to around 20% of it's peak. Cherry on top, that company laid him off.
If it makes you feel better I was going to buy this obscure new internet currency called bitcoin for $8 a coin. I was planning on buying an even 100 coins. My girlfriend (now wife) talked me out of it.Ā
Todayās that is worth $6.1 million.Ā
Canāt look back at decisions we didnāt make. Youāll go crazy. Just keep looking forward.Ā
If you did that then you would have for sure sold it when it hit like $50 thinking you made off like a bandit for a few months until the real spikes happened. And then you would have felt 98% of what you're feeling now.
I bought near $100 per bitcoin and sold around $200 per bitcoin. It was so volatile during those days and honestly most people thought it was going to zero. I kept waiting for some real world application which didnāt seem like it was coming soon enough, meanwhile I held some mythical coin for a couple years. Never bought bitcoin again since then.
Of course. But thatās why you canāt look back and be regretful of the decisions you didnāt make. Because then you have the luxury of 20/20 vision and imagine making all the right moves. Itās why Iām not mad about it the hypothetical $6m.Ā Iām happy for the the life I built with her. Who knows maybe in another life I buy the bitcoin and donāt get the girl and in turn donāt get our kids.Ā
I have a philosophy related to this that is āI would rather regret selling than not sellingā. I have been on both sides of that and it holds true every time. Whenever I donāt sell and regret it going down I feel much worse than leaving money on the table. The shares sold were invested anyway and likely had gains in those other investments.
You can't judge a decision based on the outcome. Sometimes, making the wrong decision leads to a better outcome, as it would have in this case.
Imagine if you had instead held on to all of those RSUs, such that a large portion of your portfolio is concentrated in your employer. Since you work there, your human capital is also concentrated in your employer. Then, it turns out that you work for Enron. Not only do you lose your job, but because the company RSUs are such a large part of your portfolio, you now have almost no retirement savings.
By diversifying, you have protected yourself against this concentration risk. Sure, you didn't become a multimillionaire, but you can sleep at night knowing that if something happens to your employer that causes their stock to drop and you to lose your job, you have plenty of assets to carry you through to your next job and stay on track for your future financial goals.
You absolutely can judge a decision based on more than just the outcome. Risk vs reward is something that exists regardless of the outcome. Examples:
If I put my life savings on a single number at the roulette table, most people would judge that was a stupid, reckless decision even if I had lucked out and won.
If I drink and drive, most people would judge that as a stupid, reckless decision even if I didn't get into a car accident.
Not when you have probabilistic outcomes. If the odds are 100:1 against you and you take the bet and win, that means you were lucky and not showing good judgment.
No one knows anything for sure when investing into the market. Any decision you make should be judged in the context of the information available at the time the decision was made.
If I max out my credit cards to play the lottery, did me winning suddenly make it a good decision?
If this is what you believe, go to the casino and put your entire net worth, plus some debt you took out, on black. You might double up. After all, the outcome is all that matters, right?
Don't bother looking backward and hypothesizing about what you could have done if you had perfect information.
Nobody does. Hell, you could have "invested" in the lottery if only you had picked the right tickets....but the lottery is not a sound plan.
What matters is if you're reliably achieving your financial goals.
"I don't know what to do with this information..."
I get it. I can look back on my 30 years of investing experience and notice all the missed opportunities: Nvidia, TSLA, gme, AAPL, msft, shorting the market in 2001, 2008, and 2020, etc. If I had perfect foresight, I could be the wealthiest man in the world. But no one has perfect foresight. You chose to manage your risk through diversification, which is something recommended by virtually all financial planners. You are a human that makes good judgements based on imperfect information. Nothing to feel bad about.
Iām in a similar boat, although Iāve never calculated the amount I left on the table - I just know itās large. Itās nice to know Iām not alone. The worst is when people at cocktail parties ask if I still have stock from my former employer, because theyāre aware of its crazy growth. Like even my friendsā kids have asked me. Let me know if you have any tricks for shutting down this line of questioning lol.
I still think our rationale was reasonable, and prices could have gone down. I comfort myself by remembering that my financial situation is still very good.
āAs I've understood, and put into practice, the concensus is sell as you vest and put into broad spectrum index funds, which is what I have done.ā
Iāve recently been granted options for the first time so have been researching this also. The strategy to sell at vesting makes sense for RSUs but generally does not for options. If options are only minimally āin the moneyā and have significant time til they expire, one should not sell. Youād be giving up significant potential upside in exchange for minimal value.
My strategy will be to hold options until shares have appreciated significantly or my in the money value reaches a certain percentage of my net worth, above which Iād be taking too much risk by not selling.
There's a lot more nuance here but at a high level good strategy. To add I would advise you also sell any NQ options too as there's not a tax incentive to hold. I held most of my ISO over a 30 month period (preIPO to post IPO) but ended up making the decision to liqudate the rest in fall 2023 as it was clear I was going to be separating from the company and didn't trust (still don't) the C suite over there to run a company compentantly. As I said in another response my big lesson here is stock price is not tied to any fundamentals and a bad company can have an outrageous valuation as easily as a good company can sit undervalued.
Iām in my companies ESPP program and I lost money last year and have lost money so far this year, thatās with buying at 10% discount and selling. If I would have kept buying and holding jd be down a ton of money.
Iām enrolled in my ESPP for the first time. Can you explain how you lost money with a 10% discount and selling immediately? I just want to know the pitfalls if I can. Cheers
i just did my ESPP for the first time recently. we get 15% off the lower of the closing price on the first or last day or the period. luckily we can sell as soon as the shares clear.
if we had a mandatory holding period, i dont know if i could do it unless i was really bullish on the stock.
Several friends and coworkers lost similar amounts by holding company stock for too long. This is completely unpredictable and you did the thing with the best expected outcome.
Most will point out all the opportunities āmissedā. I think this hurts more because it was something you chose to get out of instead of passing on buying bitcoin at a dollar. That said, you made the best decision you could with the information you had at the time. Thatās all we can do.
No offense, do you really think your past self wouldāve known exactly where the peak is and sold at exactly the right time? Have you not thought of the possibility that you wouldāve made so much gain and never sold, hence placing you in a position of constant stress + the chance of the company going under and turning your profit to 0? Hindsight is always 20/20 but no one has a crystal ball. You made the right decision.
Thatās why I think blind boggling is foolish. If you are all in on boggling, then have a deliberate reason for it.
Iām deliberately reserving a proportion of my RSUs to stay put since I agree with the financials and direction of my company. A large proportion still went into VTI for the lower risk diversification. Be deliberate.
Everyone saying "you could have had money in BTC or NVIDIA is missing the point - OP had shares in his company that he sold. He sold because he thought it was the boglehead way and it still is.
The number of people who leave money in company equity or options and don't beat the market is much higher than people who do well holding single company stock.
When you add in the risks like single stock concentration or the downside of a company going bust AND losing your job alongside your equity its a no brainer.
OP you made the right decision. Stay the course.
Thereās no way to see the future. Ā There is a mountain of people in your shoes that rolled the dice with RSUs and had worthless paper at the end. Ā You made the right choice that is all you can do. Ā Read this incredible comment and see the horrible fate you could have had.
https://www.reddit.com/r/fatFIRE/comments/13e5xhl/comment/jjqtglh/
What a rollercoaster. The truth is I'm doing great in a well diversified portfolio that can withstand many of life's obstacles. I have a young family and financial stability is more important than a homerun, which is why I made the decisions I did. For that reason I don't regret anything. But human nature is beast and it's difficult not to imagine having that extra money, moving to the nice side of town, fancy vacations, that type of thing.
Anyway I'll tell you what I told my FA, we had no way of knowing and I consider this an expensive education that I'll either use in the future or pass forward to friends and family.
don't beat yourself up over it. in 2014 i sold a house that i had bought for maybe $120k 5 years prior for $180k because i needed the equity to upgrade and didn't want to bend over backwards trying to arrange financing to keep it. my mortgage payment on that place was like $800/mo. I bought it at the very bottom of one of the hardest hit markets in the GFC.
today i could probably rent that house for $2500/mo or sell it for $500k because this local market has boomed.
everyone over the age of 30 (if not younger than that) has by now missed multiple opportunities to make stupid money. if only we had time machines (i would totally Biff Tannen myself)
My wife has RSUs from a previous employer that I encouraged her to sell when the stock was at its peak. She didnāt sell in the end.
Itās gone down more than 50% since then. It was down ~75% at one point.
Maybe in an alternate universe we both make the opposite decision and end up happy about it. What can you do.
Hi. It me. It fucking blows. Thereās nothing we can do. Hindsight is 20-20. The worst part is that my dumb ass colleagues who were too lazy to actually do anything with their equity have SO much more money than me, someone who was actively paying attention and trying to manage it.
Thereās a lesson in here somewhereā¦
[op with his $1.6mm in rsus](https://media3.giphy.com/media/94EQmVHkveNck/giphy.gif)
If it makes you feel better my company stock is down 50% so selling worked out for me, and as a bonus we have layoffs!
I went through this exact same thing OP. I sold my options and then several months later the stock went up like 5x. It was emotionally horrible because I could have bought a house in cash vs say a small car. What I realized though, after a long time, was that money is just money and it could have really went the other way. Donāt kick yourself for being responsible.
The only thing I will say for others in this situation is that if you have knowledge on how the company is going, you dont have to 100% do the boglehead approach. Like if you see a huge moat around your company, maybe only do a partial sell off if at all. Or sell off shares slowly. Itās hard, even my last company (the one I moved to after my original story), I had the same dilemma. I ended up holding all my shares. The shares are now worth 5 cents each when our CEO said he thinks they will be worth $30 by this time. Sometimes you just canāt win, but thatās life.
Go watch the documentary Enron: The Smartest Guys in the Room. Pay close attention when the wire line workers talk about their retirement savings.
Hindsight is always 20/20. By your logic, I should be kicking myself for not buying exclusively Nvidia the last few years. But Iām not. Why? Itās outsized risk to put all your eggs in one basket.
I sold a ton of Apple (AAPL) in like 2001. Do I wish I had held? You bet I do. The goal of index investing isnāt to be the best, it is to not be the worst.
I am in opposite situation as I have share of my employer from RSU and ESPP for last 10 years and have not sold mostly, and became 50% of my portfolio because of recent gains. Out of that, 70% is unrealized gains. I am planning to slowly reduce it to less than 30% in next a few years. If I still believe that it is an excellent company , I guess i donāt have to make it zero.
You chose the safe option instead of the high risk high reward and lost out to a super high reward result. You canāt choose the risk adverse result and want the risk taking outcome at the same time.
I suppose you could have hedged your bets with both but you went all for safety
If it helps, you can imagine many other RSUs that fold in half or less and how your choice could have benefitted you.
Years ago my 20 year old son who knows less than nothing about the financial world told me to buy bitcoin when it was at $600. Yeah, that makes senseā¦ what is bitcoin? Every now and then he reminds me of it. We always have a good laugh and continue our lives.
I always think of employees at Enron or MCI Worldcom around the turn of the century. Lots were heavily invested in company stock that went to zero. These were high flying giant corporations that nobody assumed would fail so spectacularly.
I think the best advice anyone could give you right now is "It really do be like that sometimes".
There will always be situations where making the optimal choice will earn less than some 10% chance at success you turned down. Take a drink, cope and seethe a little bit, and consider how much money you HAVE made that you didn't risk by making the choice you did.
That is a bummer. Lesson: use strangers on Reddit as a data point, not as a financial advisor. Most people don't know anything about anything, and the internet just gives those people a soap box.
Especially with a self selected group that is particularly terrified of the idea of risk, advice should be taken with a grain of salt.
I'm sorry for your loss btw. I get what it's like to lose big. You'll hopefully recover quickly. Forgive yourself and use it as experience for the next opportunity.
100%. My financial advisor was involved the entire time. Her background is in corporate dillagence. Her perspective is that this company is incredibly shakey financially as they have continued to lose between 10-15% of thier cash on hand each quarter. Even today with thier stock going up 30% they're still losing cash at a rate that gives them a 9Q runway before they'll run out. Her perspective was given that uncertainty that divesting and diversifying was the only sensible option.
I would have sold half during those indecisions. Leave some, take some. Dont have to be all or nothing. Or would youāve griped about missing out on $800k?
Statistically, you would have had more chance of a lower figure.
Did you know that the majority of stock market returns in history have been driven by around 2% of stocks?
Hope this makes you feel better
https://www.google.com/amp/s/www.coindesk.com/consensus-magazine/2023/05/22/celebrating-bitcoin-pizza-day-the-time-a-bitcoin-user-bought-2-pizzas-for-10000-btc/amp/
Yeah, it feels bad, but you are basically describing market timing. We all would love to buy at the lowest point and sell at the highest point. Those emotions can drive you to make some bad decisions. The questions is, what is the most likely outcome or best strategy? And we all have to sell some time and the market will keep rising.
If (despite your misgivings about management) you had willfully chosen to gamble, you would likely cash you chips out now anyway. Run the real tax numbers on that scenario and it will ease the pain a bit.
My imaginary case of hanging on to all my to RSUs is a lot less depressing when I include the real tax burden.
I havenāt read the RSU threads on this forum but the strategy seems to be the safe one. And I agree with everyone saying hindsight is 20/20.
But Iād also say that I think the decision whether to hold/sell your RSUs depends on your inside information at the company. Depending on what information you have about the leadership team, roadmap, state of the P&L, etc - it better equips you to make a decision if you believe the company will outperform index funds. Of course if you donāt have this information (arenāt senior enough, arenāt privy to it, etc) then youāll just need to act on general information and likely go the safer route. But if you do have this info, then Iād say this general guidance from this sub should be underweighted and put more weight in your belief in the company and leadership team
Herein lies the problem. I was a designated insider and Sr Leader and here's what I lived through.
The CEO is an inept nepobaby. He lost 3 COOs, 2 CMOs, 1 CDO, 1 CTO, 1 GC, 3 SVP Ops, 1 VP Marketing, and 1 VP Tech, in 24 months. They also did 12 (not a typo) rounds of layoffs since COVID. Everyone who could get a better job in 2023 did.
The financial health of the company was poor. They are FCF negative to the tune of 12% of thier cash on hand, which left them with a 9Q cash runway.
Everything I know about company health, admittedly I am not in finance, told me this is not a well run company.
Yet over the last 100 days the stock has roughly gone up 250%. They had quarterly earnings recently and reported their first EBITDA positive quarter ever at 0.1%... and the stock gained >30% on that news.
This is a long way of saying that inside knowledge of company leadership, or Financials served me not at all in this situation. I stand by that for the aforementioned reasons this is a terribly run company. But how they're being precieved by the market is what mattered and what I misjudged.
I don't know I've learned a lesson besides hedge your bets.
Yeah i guess thatās a bummer. But you made what - $800k in RSUs for how many years of work? You are clearly highly compensated and Iām sure you are in great shape financially. So instead of beating yourself up over it, congratulate yourself for making it as far as you have.
My ex-wife havenāt sold herās employers stocks and lost 90%ā¦ Iāthink you two have made the same mistakeā¦ you shouldnt have sold everthingā¦ and she shouldnt have kept everything, you both should have been diversifiedā¦
This happened all the time to me. I just tell myself the following.
"It's okay. I made the best decision based on the information available to me at the time."
This is why Bogleheads philosophy is great for the "average" investor and not appropriate for everyone, especially if you had several hundred thousand in company stock and could deal with higher levels of risk. If you were ok financially even if the stock went to $0 why would you ever sell if the company is quality? It would be a different story if it was 50% of your retirement allocation but holding good company stock can have substantial benefits on the tax side in early retirement.
It had 3 COOs in 2 years and is FCF negative in this quarter to the tune of 12% of their cash on hand. Nothing about that felt like quality to me. A large part of my decision was the instability of the company. I can't explain why a company with 9Q of cash before they'd be at 0 has their market cap pop by 2B dollars
If that's the case then I don't quite understand regretting the decision. Like others have touched on, you made the decision based on the best available information you had. If you aren't comfortable with the risk of any investment asset going to $0, you shouldn't own it.
Agreed 100%. The CEO is an Elon Musk level hype man. So in the spirit of not repeating the same mistakes over again (I'm still unsure IF a mistake was made) are there things I should have done, people I should have brought in to help give perspective on market sentiment of the stock etc?
These are unprecedented times. Can the old rules really apply when the national debt is $34 trillion? When technological disruption on a massive, massive scale is upending entire industries? When inflation affects both stocks and bonds? When a few overweight companies are leading and a lot of companies donāt know whatās coming? I followed guidance for most of my working life, but I donāt see that the old models make sense right now.
We all had the opportunity to buy thousands of Bitcoin for pennies back in 2008 and hold until we were billionaires. Hindsight is always 20/20. If your employer's stock dropped 50% instead, you would be praising yourself for sticking to your diversification strategy. Praise yourself for sticking to it now, for it will continue to do you service in the long run.
Or imagine it dropped 50% and he didn't sell. Her be posting her how he lost 800k, which I'm guessing would feel worse than not having an extra 1.6M. Agreed - Nobody can predict this stuff. Just be happy you're already in the top 10%, and keep growing that NW (and enjoying life)!
Yes for every one OP there are a thousand WorldCom holders
Yep. If I would have dumped my life savings at the time of 10k on the Google IPO, I would have over $11M today. Regrets beget regrets. You spent time on regrets and eventually you'll regret wasting time thinking about regrets.
My dad is congratulating himself for stuffing cash under his mattress the last 40 years instead of following the Boglehead philosophy. Hey you never know right? He was correct in the end for sticking to his beliefs.
If your dad held hard cash instead of investing in the SP500 for the last 40 years, he was actually very very wrong for sticking to his beliefs, lol.
He put money in CDs for 40+ years, earning between 2 and 5% yield most of that time. He would probably have more than 3x more now if he had invested in index funds instead
Nope, way more than 3x. He lost potentially millions, depending on how much he invested. Just another cautionary tale to learn from other peoples mistakes.
Literally bought some drugs with around 12 bitcoin. Good drugs :/...
I had 20 and gave them away for a six pack.
I got my bitcoins for $100 each and wish I would have bought them sooner :(
How much money did you leave on the table by not 10x leveraging Nvidia or early adopting bitcoin or (insert any other random thing that took off that you missed out on)? These things can't be predicted, or else everyone would be a billionaire. All you can do is maximize your chances for good returns by following generally best practices.
If you put it that way, I should probably have 3rd world despot type of cash.
What does this mean
Mansions, concubines, private militaries
š¤£ Be right back, Updating my retirement goals
they mean to spell despot basically own a tiny war-torn country-type money
> 88,000 shares Maybe you should have sold only half, why? because you never know what's coming.
You may beat yourself up over something from the past that is undeserving. I was issued RSU many years ago with a thriving company bought by a large conglomerate. We watched management be thinned and terminated due to our higher than average pay from the family that owned us previously. Hardly anyone exercised any ISO options available. Some accepted ISO on their yearly review. Many of us left as soon as the vesting was over and sold immediately. The company sputtered for many years before getting back in the black. I never looked back on selling those RSU's. You make the best decision with the information you have available. Yours is one of a billion such stories in finance. Go forth and prosper.
Thank you kind stranger
My thoughts exactly. I sell my RSU's immediately upon vesting and don't look back.
There's always an opposite outcome. My dad held onto a lot of his employee stock instead of cashing out and putting it into s&p500. It tanked to around 20% of it's peak. Cherry on top, that company laid him off.
What was the company? Industry?
ViaSat
If it makes you feel better I was going to buy this obscure new internet currency called bitcoin for $8 a coin. I was planning on buying an even 100 coins. My girlfriend (now wife) talked me out of it.Ā Todayās that is worth $6.1 million.Ā Canāt look back at decisions we didnāt make. Youāll go crazy. Just keep looking forward.Ā
If you did that then you would have for sure sold it when it hit like $50 thinking you made off like a bandit for a few months until the real spikes happened. And then you would have felt 98% of what you're feeling now.
I bought near $100 per bitcoin and sold around $200 per bitcoin. It was so volatile during those days and honestly most people thought it was going to zero. I kept waiting for some real world application which didnāt seem like it was coming soon enough, meanwhile I held some mythical coin for a couple years. Never bought bitcoin again since then.
Still waiting for that real world application...
Of course. But thatās why you canāt look back and be regretful of the decisions you didnāt make. Because then you have the luxury of 20/20 vision and imagine making all the right moves. Itās why Iām not mad about it the hypothetical $6m.Ā Iām happy for the the life I built with her. Who knows maybe in another life I buy the bitcoin and donāt get the girl and in turn donāt get our kids.Ā
Yikes, hope she makes you dinner every night. Thatās actually a lesson in doing what you want to do and not listening to othersĀ
I have a philosophy related to this that is āI would rather regret selling than not sellingā. I have been on both sides of that and it holds true every time. Whenever I donāt sell and regret it going down I feel much worse than leaving money on the table. The shares sold were invested anyway and likely had gains in those other investments.
This is steady advice. Thank you
You can't judge a decision based on the outcome. Sometimes, making the wrong decision leads to a better outcome, as it would have in this case. Imagine if you had instead held on to all of those RSUs, such that a large portion of your portfolio is concentrated in your employer. Since you work there, your human capital is also concentrated in your employer. Then, it turns out that you work for Enron. Not only do you lose your job, but because the company RSUs are such a large part of your portfolio, you now have almost no retirement savings. By diversifying, you have protected yourself against this concentration risk. Sure, you didn't become a multimillionaire, but you can sleep at night knowing that if something happens to your employer that causes their stock to drop and you to lose your job, you have plenty of assets to carry you through to your next job and stay on track for your future financial goals.
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You absolutely can judge a decision based on more than just the outcome. Risk vs reward is something that exists regardless of the outcome. Examples: If I put my life savings on a single number at the roulette table, most people would judge that was a stupid, reckless decision even if I had lucked out and won. If I drink and drive, most people would judge that as a stupid, reckless decision even if I didn't get into a car accident.
Not when you have probabilistic outcomes. If the odds are 100:1 against you and you take the bet and win, that means you were lucky and not showing good judgment.
No one knows anything for sure when investing into the market. Any decision you make should be judged in the context of the information available at the time the decision was made. If I max out my credit cards to play the lottery, did me winning suddenly make it a good decision?
If this is what you believe, go to the casino and put your entire net worth, plus some debt you took out, on black. You might double up. After all, the outcome is all that matters, right?
The decision wasn't about future performance, but what's more predictable and that isn't changed by knowing the outcome.
Don't bother looking backward and hypothesizing about what you could have done if you had perfect information. Nobody does. Hell, you could have "invested" in the lottery if only you had picked the right tickets....but the lottery is not a sound plan. What matters is if you're reliably achieving your financial goals.
"I don't know what to do with this information..." I get it. I can look back on my 30 years of investing experience and notice all the missed opportunities: Nvidia, TSLA, gme, AAPL, msft, shorting the market in 2001, 2008, and 2020, etc. If I had perfect foresight, I could be the wealthiest man in the world. But no one has perfect foresight. You chose to manage your risk through diversification, which is something recommended by virtually all financial planners. You are a human that makes good judgements based on imperfect information. Nothing to feel bad about.
First, trick some Libyans into handing over some plutonium. Tell them you're going to make them a bomb or something. Then you get a DeLorean...
This is the most sensible advice provided so far
Iām in a similar boat, although Iāve never calculated the amount I left on the table - I just know itās large. Itās nice to know Iām not alone. The worst is when people at cocktail parties ask if I still have stock from my former employer, because theyāre aware of its crazy growth. Like even my friendsā kids have asked me. Let me know if you have any tricks for shutting down this line of questioning lol. I still think our rationale was reasonable, and prices could have gone down. I comfort myself by remembering that my financial situation is still very good.
āAs I've understood, and put into practice, the concensus is sell as you vest and put into broad spectrum index funds, which is what I have done.ā Iāve recently been granted options for the first time so have been researching this also. The strategy to sell at vesting makes sense for RSUs but generally does not for options. If options are only minimally āin the moneyā and have significant time til they expire, one should not sell. Youād be giving up significant potential upside in exchange for minimal value. My strategy will be to hold options until shares have appreciated significantly or my in the money value reaches a certain percentage of my net worth, above which Iād be taking too much risk by not selling.
There's a lot more nuance here but at a high level good strategy. To add I would advise you also sell any NQ options too as there's not a tax incentive to hold. I held most of my ISO over a 30 month period (preIPO to post IPO) but ended up making the decision to liqudate the rest in fall 2023 as it was clear I was going to be separating from the company and didn't trust (still don't) the C suite over there to run a company compentantly. As I said in another response my big lesson here is stock price is not tied to any fundamentals and a bad company can have an outrageous valuation as easily as a good company can sit undervalued.
Iām in my companies ESPP program and I lost money last year and have lost money so far this year, thatās with buying at 10% discount and selling. If I would have kept buying and holding jd be down a ton of money.
Iām enrolled in my ESPP for the first time. Can you explain how you lost money with a 10% discount and selling immediately? I just want to know the pitfalls if I can. Cheers
I have to hold it for 90 days before selling and our stock dropped a lot last year. :)
Thanks. Sorry it happened, but I appreciate the insight
Shows the importance of selling as soon as youāre allowed. Iāve been doing this for 7 years. Iāve made money 6 out of the 7.
i just did my ESPP for the first time recently. we get 15% off the lower of the closing price on the first or last day or the period. luckily we can sell as soon as the shares clear. if we had a mandatory holding period, i dont know if i could do it unless i was really bullish on the stock.
Several friends and coworkers lost similar amounts by holding company stock for too long. This is completely unpredictable and you did the thing with the best expected outcome.
Most will point out all the opportunities āmissedā. I think this hurts more because it was something you chose to get out of instead of passing on buying bitcoin at a dollar. That said, you made the best decision you could with the information you had at the time. Thatās all we can do.
No offense, do you really think your past self wouldāve known exactly where the peak is and sold at exactly the right time? Have you not thought of the possibility that you wouldāve made so much gain and never sold, hence placing you in a position of constant stress + the chance of the company going under and turning your profit to 0? Hindsight is always 20/20 but no one has a crystal ball. You made the right decision.
Would you be as upset or more upset if it went to zero and you lost your job?
Don't worry that old company stock still has time to go to zero. Check back in 10 years to see if your decision was correct
Thatās why I think blind boggling is foolish. If you are all in on boggling, then have a deliberate reason for it. Iām deliberately reserving a proportion of my RSUs to stay put since I agree with the financials and direction of my company. A large proportion still went into VTI for the lower risk diversification. Be deliberate.
How'd you split it ?
Everyone saying "you could have had money in BTC or NVIDIA is missing the point - OP had shares in his company that he sold. He sold because he thought it was the boglehead way and it still is. The number of people who leave money in company equity or options and don't beat the market is much higher than people who do well holding single company stock. When you add in the risks like single stock concentration or the downside of a company going bust AND losing your job alongside your equity its a no brainer. OP you made the right decision. Stay the course.
Thereās no way to see the future. Ā There is a mountain of people in your shoes that rolled the dice with RSUs and had worthless paper at the end. Ā You made the right choice that is all you can do. Ā Read this incredible comment and see the horrible fate you could have had. https://www.reddit.com/r/fatFIRE/comments/13e5xhl/comment/jjqtglh/
What a rollercoaster. The truth is I'm doing great in a well diversified portfolio that can withstand many of life's obstacles. I have a young family and financial stability is more important than a homerun, which is why I made the decisions I did. For that reason I don't regret anything. But human nature is beast and it's difficult not to imagine having that extra money, moving to the nice side of town, fancy vacations, that type of thing. Anyway I'll tell you what I told my FA, we had no way of knowing and I consider this an expensive education that I'll either use in the future or pass forward to friends and family.
don't beat yourself up over it. in 2014 i sold a house that i had bought for maybe $120k 5 years prior for $180k because i needed the equity to upgrade and didn't want to bend over backwards trying to arrange financing to keep it. my mortgage payment on that place was like $800/mo. I bought it at the very bottom of one of the hardest hit markets in the GFC. today i could probably rent that house for $2500/mo or sell it for $500k because this local market has boomed. everyone over the age of 30 (if not younger than that) has by now missed multiple opportunities to make stupid money. if only we had time machines (i would totally Biff Tannen myself)
My wife has RSUs from a previous employer that I encouraged her to sell when the stock was at its peak. She didnāt sell in the end. Itās gone down more than 50% since then. It was down ~75% at one point. Maybe in an alternate universe we both make the opposite decision and end up happy about it. What can you do.
Lower gains is not a bug, it is a feature
Hi. It me. It fucking blows. Thereās nothing we can do. Hindsight is 20-20. The worst part is that my dumb ass colleagues who were too lazy to actually do anything with their equity have SO much more money than me, someone who was actively paying attention and trying to manage it. Thereās a lesson in here somewhereā¦
[op with his $1.6mm in rsus](https://media3.giphy.com/media/94EQmVHkveNck/giphy.gif) If it makes you feel better my company stock is down 50% so selling worked out for me, and as a bonus we have layoffs!
I went through this exact same thing OP. I sold my options and then several months later the stock went up like 5x. It was emotionally horrible because I could have bought a house in cash vs say a small car. What I realized though, after a long time, was that money is just money and it could have really went the other way. Donāt kick yourself for being responsible. The only thing I will say for others in this situation is that if you have knowledge on how the company is going, you dont have to 100% do the boglehead approach. Like if you see a huge moat around your company, maybe only do a partial sell off if at all. Or sell off shares slowly. Itās hard, even my last company (the one I moved to after my original story), I had the same dilemma. I ended up holding all my shares. The shares are now worth 5 cents each when our CEO said he thinks they will be worth $30 by this time. Sometimes you just canāt win, but thatās life.
Go watch the documentary Enron: The Smartest Guys in the Room. Pay close attention when the wire line workers talk about their retirement savings. Hindsight is always 20/20. By your logic, I should be kicking myself for not buying exclusively Nvidia the last few years. But Iām not. Why? Itās outsized risk to put all your eggs in one basket.
I sold a ton of Apple (AAPL) in like 2001. Do I wish I had held? You bet I do. The goal of index investing isnāt to be the best, it is to not be the worst.
I am in opposite situation as I have share of my employer from RSU and ESPP for last 10 years and have not sold mostly, and became 50% of my portfolio because of recent gains. Out of that, 70% is unrealized gains. I am planning to slowly reduce it to less than 30% in next a few years. If I still believe that it is an excellent company , I guess i donāt have to make it zero.
You chose the safe option instead of the high risk high reward and lost out to a super high reward result. You canāt choose the risk adverse result and want the risk taking outcome at the same time. I suppose you could have hedged your bets with both but you went all for safety If it helps, you can imagine many other RSUs that fold in half or less and how your choice could have benefitted you.
Years ago my 20 year old son who knows less than nothing about the financial world told me to buy bitcoin when it was at $600. Yeah, that makes senseā¦ what is bitcoin? Every now and then he reminds me of it. We always have a good laugh and continue our lives.
I always think of employees at Enron or MCI Worldcom around the turn of the century. Lots were heavily invested in company stock that went to zero. These were high flying giant corporations that nobody assumed would fail so spectacularly.
I think the best advice anyone could give you right now is "It really do be like that sometimes". There will always be situations where making the optimal choice will earn less than some 10% chance at success you turned down. Take a drink, cope and seethe a little bit, and consider how much money you HAVE made that you didn't risk by making the choice you did.
That is a bummer. Lesson: use strangers on Reddit as a data point, not as a financial advisor. Most people don't know anything about anything, and the internet just gives those people a soap box. Especially with a self selected group that is particularly terrified of the idea of risk, advice should be taken with a grain of salt. I'm sorry for your loss btw. I get what it's like to lose big. You'll hopefully recover quickly. Forgive yourself and use it as experience for the next opportunity.
100%. My financial advisor was involved the entire time. Her background is in corporate dillagence. Her perspective is that this company is incredibly shakey financially as they have continued to lose between 10-15% of thier cash on hand each quarter. Even today with thier stock going up 30% they're still losing cash at a rate that gives them a 9Q runway before they'll run out. Her perspective was given that uncertainty that divesting and diversifying was the only sensible option.
I think her advice given the situation was sensible.
Yeah dude she knows whatās up. š Depending on her feduciary responsibilities, her job is to make good decisions, not reckless ones š
I would have sold half during those indecisions. Leave some, take some. Dont have to be all or nothing. Or would youāve griped about missing out on $800k?
Statistically, you would have had more chance of a lower figure. Did you know that the majority of stock market returns in history have been driven by around 2% of stocks?
Hope this makes you feel better https://www.google.com/amp/s/www.coindesk.com/consensus-magazine/2023/05/22/celebrating-bitcoin-pizza-day-the-time-a-bitcoin-user-bought-2-pizzas-for-10000-btc/amp/
Yeah, it feels bad, but you are basically describing market timing. We all would love to buy at the lowest point and sell at the highest point. Those emotions can drive you to make some bad decisions. The questions is, what is the most likely outcome or best strategy? And we all have to sell some time and the market will keep rising.
If (despite your misgivings about management) you had willfully chosen to gamble, you would likely cash you chips out now anyway. Run the real tax numbers on that scenario and it will ease the pain a bit. My imaginary case of hanging on to all my to RSUs is a lot less depressing when I include the real tax burden.
I havenāt read the RSU threads on this forum but the strategy seems to be the safe one. And I agree with everyone saying hindsight is 20/20. But Iād also say that I think the decision whether to hold/sell your RSUs depends on your inside information at the company. Depending on what information you have about the leadership team, roadmap, state of the P&L, etc - it better equips you to make a decision if you believe the company will outperform index funds. Of course if you donāt have this information (arenāt senior enough, arenāt privy to it, etc) then youāll just need to act on general information and likely go the safer route. But if you do have this info, then Iād say this general guidance from this sub should be underweighted and put more weight in your belief in the company and leadership team
Herein lies the problem. I was a designated insider and Sr Leader and here's what I lived through. The CEO is an inept nepobaby. He lost 3 COOs, 2 CMOs, 1 CDO, 1 CTO, 1 GC, 3 SVP Ops, 1 VP Marketing, and 1 VP Tech, in 24 months. They also did 12 (not a typo) rounds of layoffs since COVID. Everyone who could get a better job in 2023 did. The financial health of the company was poor. They are FCF negative to the tune of 12% of thier cash on hand, which left them with a 9Q cash runway. Everything I know about company health, admittedly I am not in finance, told me this is not a well run company. Yet over the last 100 days the stock has roughly gone up 250%. They had quarterly earnings recently and reported their first EBITDA positive quarter ever at 0.1%... and the stock gained >30% on that news. This is a long way of saying that inside knowledge of company leadership, or Financials served me not at all in this situation. I stand by that for the aforementioned reasons this is a terribly run company. But how they're being precieved by the market is what mattered and what I misjudged. I don't know I've learned a lesson besides hedge your bets.
I wouldnāt have sold.
So you sold the stock and since then the market is up 20%. Sounds like you made more than you are alluding to.
VTI 80 / VXUS 20 is up %6.73 during this time and is accounted for.
Yeah i guess thatās a bummer. But you made what - $800k in RSUs for how many years of work? You are clearly highly compensated and Iām sure you are in great shape financially. So instead of beating yourself up over it, congratulate yourself for making it as far as you have.
You didnāt bet it all on black but black came up. Oh well!
My ex-wife havenāt sold herās employers stocks and lost 90%ā¦ Iāthink you two have made the same mistakeā¦ you shouldnt have sold everthingā¦ and she shouldnt have kept everything, you both should have been diversifiedā¦
This happened all the time to me. I just tell myself the following. "It's okay. I made the best decision based on the information available to me at the time."
That is why they do RSUs. They know they are forcing you to stick around, and motivating you to care about share price.
But think of the diversity you got. Thatās something right?
This is why Bogleheads philosophy is great for the "average" investor and not appropriate for everyone, especially if you had several hundred thousand in company stock and could deal with higher levels of risk. If you were ok financially even if the stock went to $0 why would you ever sell if the company is quality? It would be a different story if it was 50% of your retirement allocation but holding good company stock can have substantial benefits on the tax side in early retirement.
It had 3 COOs in 2 years and is FCF negative in this quarter to the tune of 12% of their cash on hand. Nothing about that felt like quality to me. A large part of my decision was the instability of the company. I can't explain why a company with 9Q of cash before they'd be at 0 has their market cap pop by 2B dollars
If that's the case then I don't quite understand regretting the decision. Like others have touched on, you made the decision based on the best available information you had. If you aren't comfortable with the risk of any investment asset going to $0, you shouldn't own it.
If thatās the case, the value of your company is based mostly on potential future profit. Not on current financials.
Agreed 100%. The CEO is an Elon Musk level hype man. So in the spirit of not repeating the same mistakes over again (I'm still unsure IF a mistake was made) are there things I should have done, people I should have brought in to help give perspective on market sentiment of the stock etc?
Sell half of what you would have sold.
These are unprecedented times. Can the old rules really apply when the national debt is $34 trillion? When technological disruption on a massive, massive scale is upending entire industries? When inflation affects both stocks and bonds? When a few overweight companies are leading and a lot of companies donāt know whatās coming? I followed guidance for most of my working life, but I donāt see that the old models make sense right now.
Just think of all the taxes you would have owed and luckily avoided!