When people panic, they do things they normally wouldn't do. It's basic human nature. Not everyone, however, issues a press release detailing their irrational behavior for posterity's sake.
With this week's news about Lehman Brothers filing for Chapter 11 bankruptcy protection and AIG (NYSE: AIG ) getting bailed out by the U.S. government, all coming on the heels of the Fannie Mae (NYSE: FNM ) and Freddie Mac (NYSE: FRE ) debacle, investors are understandably concerned about the market's future.
While we at the Fool have urged investors to remain calm and focus on the long run, we'd much rather have you put your cash under your mattress than do what NBA player Doug Christie and his wife, Jackie, suggest. On Tuesday, they issued a press release announcing their intention to purchase 3,000 shares of AIG in hopes of using their self-proclaimed "star status" as a "power couple" (all their words) to "encourage all our fellow men and women to buy at least two stocks to help with the global economic crisis."
For those of you without enough fingers, this press release trumpets the purchase of about $6,000 in stock. Although, in fairness, they also announced intentions to hold a financial workshop, as well as to use their media power to bring awareness to the financial crisis.
We suppose no one else noticed that we're in a financial crisis. Huh, how about that.
We cannot deny the magnanimity of this gesture, but we can't help making this observation: The Christies apparently have no idea how the stock market works.
Buying shares in AIG does exactly nothing to help AIG. It's not as if the company gets the money. The person who sold the shares to you gets the money. And frankly, given that the government has decided to give AIG a loan at credit card-level rates, I'm pretty sure that person was relieved to get much at all for his or her shares.
AIG has billions and billions of dollars in exposure to mortgage-backed securities. Trying to support AIG by buying its stock is kind of like trying to boil the ocean. You're not making a difference, the gesture is futile, and you look a little bit ridiculous. More so if you put out a press release about it.
Look, Doug and Jackie -- if you want to do something worthwhile, go and buy a tract of semi-built homes outside Stockton, Calif., bulldoze them, and give the land to a farmer. You could even make an episode of Committed: The Christies about it. Better yet, you could make a donation to a charity dedicated to improving actual financial literacy, like JA Worldwide.
But more to the point, we beg you: Please, please, please webcast your financial workshop. It will bring all sorts of awareness to this crisis that no one else seemed to be aware of before you committed $6,000.