Co-worker putting all $ in the S@P

P

pma

Here is an interesting story for you fellas. My co-worker,a pharmacist,was advised by his broker on monday to sell all of his Boeing stock that he has been building for 10 years and buy a load of big S&P contracts. Well,he did just that today. I did not ask how many contracts he bought-but it must be something major. Now-let me tell you this-his broker has got this guy pumped up bigtime!!! When he came into work tonite he was(and is ) as giddy as a schoolgirl with all the cash he is going to make. The question is this-why would his broker advise him-strongly- to unload his awesome performing Boeing stocks???
 
Quote from pma:

Here is an interesting story for you fellas. My co-worker,a pharmacist,was advised by his broker on monday to sell all of his Boeing stock that he has been building for 10 years and buy a load of big S&P contracts. Well,he did just that today. I did not ask how many contracts he bought-but it must be something major.
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This seems very odd. Does your friend normally invest in futures? Does this represent a significant portion of his portfolio? At least he will have easy access to anti-depressants and sedatives should the broker be wrong. By the way, how is business at that pharmacy?
 
Elated-I know nothing about his "broker." The pharmacist I mentioned liquidated ALL of his Boeing stocks. I do not know (yet) if he took all of that money and put it in the index. He seems like a happy camper-very stoked about having his money in the S&P. I really hope it all works out for him,he is a really nice guy.
P.S.-business is great,we work at a major hospital in Seattle,Wa.
 
Well, Boeing has already had a great run... it's not necessarily a bad thing to take profits.

I dunno about putting it ALL into the S&P tho, that's a bit scary since he's at the whim of the entire market. With a 4 year buildup already, it could be a rocky road.
 
Quote from pma:

The question is this-why would his broker advise him-strongly- to unload his awesome performing Boeing stocks???
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This question is meaningless without knowing the total size of the guy's portfolio. Maybe his Boeing stock represents a small portion of his overall portfolio and his broker is bullish. Maybe his broker has some longs he needs to unload.
 
Does he know about time decay and rollover in every 3 months?

Timing is everything. He should have used a pullback to go long and no leverage...
 
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