Many things are to blame for our global ‘recession’. One of them – in Ireland at least – has been the endless vanity splurge for home buyers. In the past five to ten years we have turned into a nation of people hungry to own our own property, at whatever cost. This in turn has ramped up assumed demand, therefore prices, and the end result for some people is a not so good situation where they’re in negative equity. Thank fuck i’m not one of them. But what else causes unease and uncertainty in markets, causes panic in various economies, and puts pension investments – and other funds from the pockets of every day earners – into jeopardy? Stupid stock trading, that’s what.
An uncle of mine, Denis, is a clever bastard. He threw fifty grand at Eddie O’Connor when he was setting up Eirtricity – which was then rebranded Airtricity and sold for billions less than ten years later. My uncle cleaned up on that one to the tune of an eight figure sum or so (i’ve estimated!), because he’s clever, holds his nerve, and looks at investments in the longer term.
I flew to Sligo for a family gathering in October 2006 and Denis was there again as per usual. Looking happy as a pig in shit with his big white beard and a pint of Guinness in his hand, he looked quite delighted with himself. The smug git had just bought stock in Partygaming through his broker, Davy, and was rather happy about it. Remember this was 2006, when the yanks had just banned gambling on the internet, and gambling stocks had bombed because – apparently – the USA rules the world. Partygaming had bombed with all the rest, and was dirt cheap. He bought a shitload of stock at $34.50 a share or so. Nobody was touching it. But my uncle did.
Fast forward to May 2008, not even two years later. Partygaming stock peaked at $278.50. Needless to say my uncle got rid of the stock he’d snapped up when nobody else wanted it, and made back 8 times his initial investment. When he ‘has a go’ at buying a certain stock he doesn’t just throw a few hundred quid here or there – tens of thousands get pumped into it. He held on, had faith in the stock, and did very well from Partygaming. Again. He’s used gambling sites himself, so he could see the long term value in them. Ironically, traders didn’t.
Hands up if you search Google every day? I just put my hand up. Hands up who probably clicks on a Google Adword every day, with or without realising it? I just put my hand up again. Who uses Gmail? My hand is still up. Who uses Google Apps for their everyday business email, collaboration, calendars and so on? I just put my hand up once more – it’s getting tired now. Who watches videos on Youtube at least once a week, if not more? I did it again – my fucking hand is killing me at this stage.
Right, so we’ve established that pretty much every day, a vast majority of internet users around the world use at least some form of Google product in their everyday lives. Yes? Then why, from $741.79 on November 6th, 2007 did Google stock bomb to $328.98 on October 9, 2008?
As of today, 16th October 2008, Google is up 13.85 points on todays NASDAQ trading at $353.02. This is still half of what it was less than a year ago, even though Google has been increasing revenues quarter on quarter, delivering new products to the market with unrivalled pace, and advertising bucks are moving faster and faster from traditional media to online. So why has the stock lost so much value? Because traders don’t know their stocks well enough, and panic under pressure to easily. What they sometimes forget is that the half-value lost is the half-value in pensions, college funds, and nest eggs.
Savvy savers should take a choice today to take the plunge and start some self-managed investing using any of the online share trading services. It can’t possibly be worse than investing in someone with the ‘know how to secure your future’, now can it?
On that note, i’m working on a new share trading and information site at the moment which will hopefully be a valuable tool for self-service investors in future years to come. I don’t think i’ve ever seen a better time for it.
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If you have spare cash now is the time to buy stock (well – the worst day of the recent stock exchange crash would have been the best day.. but you get the idea)
Great article Hugh, couldn’t agree more. I had my eye on Google also and very tempted to take a punt now. This dark cloud of a recession has to have a silver lining, and that comes in the form of a bounce back – history has shown us that no matter what, we always come back stronger – and the savy investor can take advantage of this.
I’m also very glad I’m not in negative equity – but I hope to take advantage of the battered stock market. After all I need to recoup losses of my own – I threw some cash into Rabo Investment funds and they are down 50% last time I looked.
Very interested to hear more a about your new site…
Colly
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