The Old Thrift Plan

[mattwtrs]

I seem to remember that if you started in the early 70's & put in the $6 a week you had about $165,000 when they wanted to end the Plan. A lot of guys converted it to stock & it became $300,000. They almost doubled their money and most seemed happy! I don't want to look up how I did. I just wish UPS had started the 401K sooner!

 

[1989]

On 11/12/1996 I could damn near fill up my SUV for $14.25!!!!! Run that through your time machine and see how much UPS stock has grown!

Why didn't you buy oil in 1996?

The fact is, if you had stock pre IPO you did very well. july of 1998
S&P 500 was at 1121 today it's 1361 that's a 21.5% return. UPS stock was $17 (adjusted for the IPO split) today it's $69. That's a 406% return

 

[hseofpayne]

Why didn't you buy oil in 1996?

The fact is, if you had stock pre IPO you did very well. july of 1998
S&P 500 was at 1121 today it's 1361 that's a 21.5% return. UPS stock was $17 (adjusted for the IPO split) today it's $69. That's a 406% return

I bought oil every 3 months or 3,000 miles! My point was this, if you took one share of stock to the gas station in1998, you filled up your tank, or close ; If you take that same one share to get gas today, you still won't quite fill up your tank. UPS stock growth has become stagnant, cost of living outpacing growth.

 

[JonFrum]

Share price adjusted for split is about 5 times more now than when the thrift plan was converted.

On 11/12/1996 the stock price was $14.125

The fact is, if you had stock pre IPO you did very well. july of 1998
S&P 500 was at 1121 today it's 1361 that's a 21.5% return. UPS stock was $17 (adjusted for the IPO split) today it's $69. That's a 406% return.

Can someone explain the above quotes a bit further. I clicked on BrownCafe's Investor Relations link on the left of the page and was only able to look up the stock price back to 11/10/99. The stock has gone from $68 on November 10, 1999 to $68 on Friday, June 13, 2008. (The price fluctuated up and down between those dates, of course.) But clearly no four or five fold increase.

That leaves just the 1996 through 1999 period to account for any four- or five-fold increase.

BTW, when a stock splits, a stockholder does not make any money on the split itself. It's like splitting a $100 bill into two $50 bills. You aren't any richer. (Though stocks that split are said to be accessible to more future investors because of their lower price.)

 

[JustTired]

BTW, when a stock splits, a stockholder does not make any money on the split itself. It's like splitting a $100 bill into two $50 bills. You aren't any richer. (Though stocks that split are said to be accessible to more future investors because of their lower price.)

While you don't make any money at the time of the split, you do end up with twice the shares of stock if it splits 2-1. So you will make money if it rises at some point in the future.

Say you have 100 shares at $80. That's $8000. It splits 2-1. So you end up with 200 shares at $40 = $8000. Now if shares go up $10, in the pre-split scenario you would have $9000(100x$90). After 2-1 split, you would have $10,000(200x$50). Plus, when a dividend is paid, you would be receiving a dividend on 200 shares instead of 100.

 

[UpstateNYUPSer(Ret)]

Stock splits are the result of a company which is performing well and is sharing its' good fortune with its' shareholders. Stock splits, which have little or no impact initially, can have profound effects over the long haul, both in terms of stock value (price) and the dividends received which, as JT explained, you are now receiving dividends on twice (in a 2 for 1 split) the number of shares.

Stock splits and dollar cost averaging are two of the concepts which every person who has a 401k or likes to invest in the stock market should become very familiar with.

 

[JonFrum]

While you don't make any money at the time of the split, you do end up with twice the shares of stock if it splits 2-1. So you will make money if it rises at some point in the future.

Say you have 100 shares at $80. That's $8000. It splits 2-1. So you end up with 200 shares at $40 = $8000. Now if shares go up $10, in the pre-split scenario you would have $9000(100x$90). After 2-1 split, you would have $10,000(200x$50). Plus, when a dividend is paid, you would be receiving a dividend on 200 shares instead of 100.

JustTired,

I agree.

But when a stock splits, there are now twice as many units of stock in the market. So any increase in the value of the Company must now be distributed over twice as many shares. In other words, to use your example, it's unlikely that the share price would increase $10 for the original (pre-split) shares, and the same $10 for the post-split shares. Since the same overall increase in corporate value is being distributed over twice as many shares in the post-split senario, each share would only increase by $5, not $10!

Likewise with dividends. The same overall dividend distribution must now be spread over twice as many shares. So the dividend per share would be (all other things being equal) only half as much in the post-split senario.

After a split, you have twice as many shares of stock, they are each worth only half as much, and any future increases in stock price and dividend declaration will be only half as great, on a per share basis.

TANSTAAFL [There ain't no such thing as a free lunch.]

Since stocks are often bought in hundred lot units, reducing the stock price by splitting the stock makes it more affordable to future small investors. But stock splitting does not make the current investor any richer.

 

[UpstateNYUPSer(Ret)]

TANSTAAFL [There ain't no such thing as a free lunch.]

Sure there is--it's called welfare.

 

[scratch]

Has he received a Trial Date yet?

LOL. The only people who became millionaires with the IPO were management. Us lowly hourlies weren't allowed to buy stock for a long time. I had one OnCar that took out a second mortgage on her house and was able to buy a lot of stock right before the IPO. I wish the rest of us had that option. My Center Manager at the time said that UPS stock would never be the same when it went public. He was right, I have never bought any since.

 

[JonFrum]

. . .Stock splits and dollar cost averaging are two of the concepts which every person who has a 401k or likes to invest in the stock market should become very familiar with.

The formula for making money on stocks is: Buy Low, Sell High.

Dollar Cost Averaging replaces the "Buy Low" part with "Buy At The Average Price." This cuts your ability to make money from the start. You could still make some money if you eventually Sell High, but that remains to be seen. In the case of UPS stock, there aren't that many opportunities to Sell High, because there haven't been many Highs.

 

[What'dyabringmetoday???]

Seems to me that the thrift plan actually was UPS stock. It seemed to jump the same as the stock did when it split and went public and all that.

 

[JustTired]

JustTired,

I agree.

But when a stock splits, there are now twice as many units of stock in the market. So any increase in the value of the Company must now be distributed over twice as many shares. In other words, to use your example, it's unlikely that the share price would increase $10 for the original (pre-split) shares, and the same $10 for the post-split shares. Since the same overall increase in corporate value is being distributed over twice as many shares in the post-split senario, each share would only increase by $5, not $10!

Likewise with dividends. The same overall dividend distribution must now be spread over twice as many shares. So the dividend per share would be (all other things being equal) only half as much in the post-split senario.

After a split, you have twice as many shares of stock, they are each worth only half as much, and any future increases in stock price and dividend declaration will be only half as great, on a per share basis.

TANSTAAFL [There ain't no such thing as a free lunch.]

Since stocks are often bought in hundred lot units, reducing the stock price by splitting the stock makes it more affordable to future small investors. But stock splitting does not make the current investor any richer.

I understand where you are coming from. I should have made the point that I wasn't talking about the same time frame. I was thinking more "long term". The stock I had before the split ended up eventually price the same after the split. Sure, it took a while. But I was in it for the long haul then. And I did quite nicely. Especially considering that all the money that was switched to stock out of the thrift plan was not my money to begin with. I received a check for all the money I had contributed when the change was made. We were allowed to take that money out without penalty because it had already been taxed before it was deposited into the thrift plan.

 

[helenofcalifornia]

I chose "not" to get out of my thrift plan when they told everyone to get out. Instead, after about five years they sent me a check for the total amount, cashing me out. I loved the return I was getting with the Thrift Plan.

 

[hseofpayne]

I chose "not" to get out of my thrift plan when they told everyone to get out. Instead, after about five years they sent me a check for the total amount, cashing me out. I loved the return I was getting with the Thrift Plan.

Me too helenofcalifornia! I didn't mean for this thread to digress into a amateur investor hour! I just always felt we had a good thing back then and hated to see it go. I always felt UPS just went public to raise some cash, and once they got that, they had no incentive to increase number or value of shares. I am not as sophisticated as these guys, I just use the ole "tank of gas" formula to see if I am making money!!!!

 

[1989]

Can someone explain the above quotes a bit further. I clicked on BrownCafe's Investor Relations link on the left of the page and was only able to look up the stock price back to 11/10/99. The stock has gone from $68 on November 10, 1999 to $68 on Friday, June 13, 2008. (The price fluctuated up and down between those dates, of course.) But clearly no four or five fold increase.

That leaves just the 1996 through 1999 period to account for any four- or five-fold increase.

BTW, when a stock splits, a stockholder does not make any money on the split itself. It's like splitting a $100 bill into two $50 bills. You aren't any richer. (Though stocks that split are said to be accessible to more future investors because of their lower price.)

I got my prices from an old statement. In July of 1998 the stock price was actually $34 a share. Prior to the IPO (lets say Oct. 1999) they valued the stock at $50. Then they split it 2 for 1 so you would have 2 shares at a $17 cost basis. Now the stock price was split in half (from $50 to $25.) Then the IPO was at $50. (If you got in at the IPO you paid $50.) Overnight you had a 100% unrealized return.

 

[bamasteve]

I left was a sup at UPS from Jan 91 thru June 98. I am no 51 yrs old. Can anyone tell me how to find out if I have thrift plan money out there and how and when I can get to it?