H&R Block Stock Drops To a Nine Year Low

This is almost to the point of being amusing. I read an article this morning that was titled, “H&R Block Plunges to 9-Year-Low After CEO Smyth Quits.” Yeah, I guess the CEO quit. That happens. What are the possible effects when something like this happens? Well, one effect could be that the company stock might drop 7.2%. That could happen if the CEO is a good one. If everyone doesn’t like the CEO, I guess the stock could go up 7.2%. Either way, as I have said numerous times, it is risky to invest in individual stocks.

Hmmmm…where have I said that? Here and here and here…

- One Up On Wall Street by Peter Lynch
- Navigating The Market With MarketRiders
- Investing With MarketRiders

In that last article, I actually wrote”

“We also need to get our money out of individual stocks. I was never actually interested in them because of the risk. One of my favorite lines is, “What if the CEO of that company gets hit by a bus tomorrow?” I really don’t want to check their stock price after that. I don’t have the stomach for it.”

Of course that was just an example. No one really wants to hear of anyone getting hit by a bus. It’s the type of situation that can occur at any moment and actually has over the past few months. Tragedy and unexpected events happen all the time. That’s why I don’t put all my eggs in one basket.

Trust me, I have better things to do than to worry about how the executives at one company are handling their day to day affairs. I sure don’t want them planning the destiny of my money. I might not even like them. I would much rather invest in a wide variety of markets that somewhat balance each other. Let competition and the forces of nature duke it out. I just sit back and relax. Of course, right now I am sitting back and watching my balances fall lower and lower, but I am still relaxed. If there’s one thing that I have learned, it’s that the market can fall rather quickly. It can also jump just as quickly. Just stick to the plan.

So, what’s the moral of this story? Get out of individual stocks. Unfortunately, many of us just aren’t smart enough to predict what’s going to happen to them with any degree of accuracy.