It looks like JP Morgan is going to buy Bear Sterns for $235 Million dollars. I put the question mark above because I can't it would drop that much - Bear Sterns closed on Friday at $30 a share. It seems that JP Morgan is getting Bear Sterns at more than 90% off. Even more amazing the stock's 52 week high is over $159. That means if you invested a million dollars in the company last May, you'd have around $12,500 today.
This is another great reason why it's important to diversify. I'm sure there are people who were heavily invested in Bear Sterns and not properly diversified. These people would have watched a lifetime of investing disappear in less than a year.
In other related news, the Federal Reserve dropped the interest rate a quarter point - quite a rarity on the weekend. From the report, "The 'discount' rate cut announced Sunday applies only to the short-term loans that financial institutions get directly from the Federal Reserve. It doesn't apply to individual borrowers."
If the Bear Sterns news came out a couple of weeks from now, I would have pegged it for an April's Fool Day prank.
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