from companies and analysts?
PAYNE: Enron is sort of unique because the company pulled the wool over just about everybody’s eyes. You’re always going to have an Enron out there. There is always going to be one company, every year or so, that we thought had it together, got certified from one of the top-five accounting firms, Wall Street loved it, [and] institutions owned the stock.
You have to listen to what Wall Street says. It’s almost like reading a paper because whoever wrote that paper had an agenda, too. You take the facts out of it. Just like you would take the facts out of a story in the Daily News, you take the facts out of a presentation or an opinion from a Wall Street analyst, and then go and do some work on your own.
GIBBS: The homework is the thing that we won’t do. We don’t take people’s advice [to] buy a Lexus. We go and drive it, kick the tires, go underneath it, [and] read all about it. When you buy a house, you have particular requirements. You want four bedrooms, two bathrooms, southern exposure, [etc.]. We don’t do that when it comes to stocks.
MORRIS: I think that financial information really needs to be processed and made actionable. I think making it actionable is the thing that African Americans haven’t necessarily known how to do. We now are getting it. There is a black presence [on financial television]. Whether we know the answers or not, there is something that happens when people turn on the television and they [see] a face like [theirs]. They will listen not just because we’re African American or we’re going to give them better advice. There is this psychological sense that you know where the hurdles and the obstacles have been, and you know kind of where they want to go.
EPPERSON: One of the things that came from the Enron [scandal], if you don’t understand [the investment], do not buy it. That’s particularly true for individual investors.
One of the things I find really [helpful] is investment clubs. I love the amount of research some of our folks are doing now that this boom has really hit our community. They have pages and pages of documents, and charts they have developed looking into these companies. That is how you buy a stock, and if you can’t do all that, then go to a mutual fund company.
McKISSACK: Mutual funds are a great place for the average investor to start rather than hearing about some stock tip on TV and deciding, OK, I’m going to buy that. That’s pretty hard to do without a certain amount of information and knowledge. However, one can certainly buy into a diversified portfolio of stocks or a mutual fund with relatively low dollars, and you can tailor it to your needs.
Valerie Coleman Morris CNNfn
HER ADVICE TO OUR READERS: African Americans don’t have an investment problem. We have a spending problem, and I think acknowledging that is really important. We