Own shares? Wish you didn’t?
There’s something unseemly about talking about money. These days people are more likely to spread details of their sex lives around the globe than talk honestly about how they feel about personal investing, savings or money itself. But like sex, some seem to need it more than others, it’s hard for most to get by without it, and a little more from time to time never hurt.
But with all the news about a panic interest-rate cut following stock market dives around the world on fears of a U.S. recession, because Joe Average American can’t pay his mortgage, because unscrupulous bankers lent money they never had to people who didn’t read the fine print on mortgages whose payments were set to explode months later and doom them to default, mortgages which were then bundled together and sold to suckers investors half-way around the world who also never bothered to read the fine print and didn’t know what they were buying into anyway…
…when you factor in sky-high oil prices coupled with a possible collapse of the shrinking U.S. dollar, it helps to step back, cut through the crap and gain a little perspective on what’s only the latest in a long line of financial crises born of greed and swindle.
One of the things I used to do as a way to make a living was cram myself into a van along with a driver, soundman, cameraman and technician, spin through the green hillsides of the Hong Kong New Territories, past stinky tofu and joss stick hawkers and through a long, dirty tunnel into Asia’s Manhattan to interview stock brokers and company analysts on daily matters financial.
Then I’d go back through the tunnel to the bureau, cut the best two quotes, lay a bunch of wallpaper footage of stock market traders talking on the phone, people buying things, and of course lots of money – people counting out money, bits of change falling out of pockets… well, not quite that bad….
…but anyway I’d put together a little package, gussy it up with little tidbits of what was happening in the markets around Asia and the world, add a few items of business news, go get slapped on so much make-up I’d put a corpse to shame, plunk myself in front of the camera and then try to look and sound like I knew what I was talking about. Sometimes, I even succeeded. It was a great job, paid the rent and then some on a Hong Kong shoebox apartment, and I even got to learn a thing or two.
Like for instance:
- Nothing personal if that’s your line of work, but they’re all full of shit. Next time you see Gordon Gotbucks up there on CNBC Squawkbox blabbering on about where the Hang Seng is going to trend for the next fortnight or next year, throw a brick at it. Can ol’ Gordo predict the next September 11? The 1995 earthquake in Kobe, Japan? A civil war in China? These things have and will move markets up or down, but the thing is, nobody can predict the news.
- All they want is your money. Because at the end of the day, whether you’re buying, selling or watching it melt before your eyes, you will always pay a fee to whoever is doing the buying and selling. With online trading the fees have been cut to a fraction of what they used to be, but there are more playing the game. It always will be the oil that greases the skids and keeps them fat and happy on their yachts. Sure, you will always be given the line that stocks outperform over the long term, but I have yet to see an investment fund brochure that didn’t have a caveat at the bottom in fine print: past performance is no guarantee of future returns.
- The game is stacked against you. I’m not a conspiracy theorist, and I do know there are honest people in the business, but the fact of the matter is that insider trading is what makes the markets go ’round. I had colleagues ask me to give them hot stock tips. When I said I didn’t have any, they didn’t believe me. What? Aren’t you getting any inside dope from them? One of those colleagues, btw, is now anchoring on a well-known financial news channel.
- If you’re reading this on a computer, you’re already rich, you’re just trained to think you’re not. The finance industry has a vested interest in making sure you know that someone else has more money than you do, you should envy him for it, and adjust your portfolio accordingly. Step back. If your pile is small, count your blessings. If it’s large, look where you could spread it around to do some good. Just remember to keep receipts to deduct those donations at tax time.
Oh, and a precious few tips gleaned from some of the sharks:
1. Never catch a falling knife. Translation: never buy shares in a company whose share price is falling.
2. Sell everything when you start to hear cab drivers and fitness instructors giving investment advice.
3. Buy the hell out of the market when there’s blood on the streets.
Only three? Hell, two of them contradict each other. Seriously, I know very little about this. I was only a business reporter for four years. That’s where the cynicism comes from, I guess.
© 2008 lettershometoyou