Already mentioned is the vesting period. Although he could have sold out at least a portion of his stock, he was probably still heavilyvested with the company.

That being said, he probably felt loyalty and a sort of ‘invincibility’ within the company as has already been stated. On the outside this seems stupid, but when it’s happening to you and you’re watching your stock options soaring, it becomes extremely difficult to sell.

Finally, and most importantly, what about the greatest investor on the planet? How did he make his money? By NOT diversifying. He invested over half of his partnerships’ money in one company at one point. He did this repeatedly. His whole philosophy is to bet big when the getting is good.

Of course not everyone can follow in Buffet’s foot steps, but obviously being in the industry gives one a feeling that they know what they are doing.

Anyways, just my two cents.

Does the article say what percentage this is from his total assets?

I can see what he was thinking because I am guilty of the same type of thinking myself. It is just basic greed. When your stock is doing well, you think “oh, I probably should sell, but if I sell it, I’ll have to pay taxes on all these gains”. As my co-worker told me when I used a similar line “oh yes, sure, just wait a little, then you’ll have capital loss and will be able to take it off taxes, but not all at once. So I guess now he has a huge capital loss and can continue to deduct it from taxes – $3000 at a time unless he has gains – for the rest of his life.

Bill Gates has quite a bit of Microsoft stock, obviously, but he is well diversified beyond that according to public information easily accessible via Google. If Microsoft tanked like Lehman, that would be bad news, surely, but Gates would still be able to retire in a style many people could only dream about.

Plus, I’ve heard he’s even got a commercial acting gig now. :-)

I mean look at Bill Gates or Steve Jobs – do you really think anybody is telling them “Gah, you’re such an idiot! You should have sold your company stock early on instead of making hundreds of millions by investing all your money in your one company.” It’s hard to cut the cord on a company that’s made you rich and paid you dividends (literally and figuratively) for years.

Like other specific individuals I’ve singled out on Consumerism Commentary before, he may actually find this article at some point and shed some light on his decisions.

Plonkee: It’s easy to believe the company you work for is immune. Constant positive communication from upper level executives encourages employees to ignore the media when it the news is bad, and you feel like you have “insider” information…

Uh…yeah. What the hell was Shorr thinking? He’s in finance and he left himself exposed to that kind of risk? I guess it’s not all that surprising that financial institutions are failing left and right if this is the sort of in-house expertise they’ve been relying on.

You should have diversified there pal!