11 Oct 2013, 2:20pm
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  • October 2013
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  • the Ermine gets away with not getting struck off the Royal Mail IPO

    I’ll probably get slated as a scumbag capitalist running-dog for this but though I staked £10k on the RM IPO I didn’t get struck off the issue for being a filthy rich bastard, because I used Mr and Mrs Ermine’s ISA allocations and staked £5k on each 1. According to the Grauniad it’s all about the Sids 2, and not those disgustingly rich barstewards who regularly play the stock market. The schadenfreude is already dripping from the headline

    Royal Mail shares: thousands fail in applications for larger stake

    going on to explain

    Anyone who applied for more than £10,000 3 of Royal Mail shares – an estimated 36,500 individuals – will be left empty handed after the government chose to favour small investors over those who regularly play the stock market.

    So There! One in the eye for the 1%. Who of course bought theirs via the institutional offer which covers the majority of the shares but we won’t tell the little people that, shall we 😉

    Nice Royal Mail picture, Guardian - thanks for that, saves me from getting wet taking one and if you are going to call be a capitalist running-dog then I'll pinch your pic ;)

    Nice Royal Mail picture, Guardian – thanks for that, saves me from getting wet taking one in the rain  and if you are going to imply I’m a capitalist running-dog who shouldn’t have got a look-in then I’ll play true to type and pinch your pic 😉

    I can’t say I’m stupendously overwhelmed with two lumps of £750-worth, and an apparent £500 total profit at today’s price but so be it.It’s not a huge compensation for the slow destruction of my cash holdings by the Bank of England’s devaluation of the pound and attendant failure to hold inflation under control for the last five years but I guess every little helps 😉

    I suppose RM does fit well into a high-yield portfolio (HYP), and if I could consolidate the two holdings it would be about right for a single holding in my HYP – with the requirements of diversification I target single holdings at a roughly £2000 purchase price.  But I can’t as I don’t have another share dealing account yet. I did consider making even more applications but though I need to split my ISA soon because it is now well over the FSCS limit I avoided doing so because of the retail distribution review.

    Can I have my money back ASAP because there’s something interesting happening over the Pond…

    Now we have all the Sturm und Drang out of the way about Royal Mail can I have my £8500 back ASAP because our American friends are still playing silly buggers which should be good for share prices if you are a buyer. My ISA is maxed, and I could use some RDSB which has been falling nicely (I have no oilies at all so it’s an obvious hole in my sector diversification). And it’s October, always a great time of year for a jolly good punch-up in the markets. I don’t know what they do for Halloween on Wall Street but it clearly makes ’em nervous this time of year.

    And what exactly is the organisation formerly known as the US government doing at the moment? How did they get here, and how the hell do they get out?

    The American government shutdown beats the hell out of me as far as getting my head round it. They seem to have a genuinely bizarre case when both houses have been democratically elected, it appears at different times. So the electorate presumably felt a bit right wing when they elected the house of representatives and a bit left wing a couple of years later when they elected the senate. And a bit left again when they elected the president. Or the other way round, God knows.

    Now oscillating from a little bit right to a little bit left is fine, it’s how Anglo-Saxon democracies work with first past the post systems. There’s a great big rump of people that always feel one way balanced out against an equal rump who always feels the other way, who are basically deadweight as far as changing things though I guess they are reflected in the two poles, if many of them felt differently the poles would have to shift. There there is a smaller remainder of fickle bastards such as ermines who sometimes vote one way and sometimes another. So the overall direction stumbles like a drunk between two narrow walls, first going one way before the pain gets too much then the other way. And some general directions of the poles go in the same way and the electorate doesn’t get any say in the matter, we need a third dimension for the drunk in the analogy, say going up a hill or something. He doesn’t get a choice about that, so things like State ownership of the means of production is currently out of favour 4 whatever party is likely to get in.

    The trouble is that the time-spaced sampling method of the American system means that we have contradictory views of what the electorate wants, because one lot was voted in a couple of years apart form the other. And the system seems to have ended up with these two opposing views glowering at each other, both with veto control. So we have a situation of a couple of alleycats who have come across each other in the night, and they’re a hissin’ and a-spittin’ at each other and neither can pass. Let’s hear it from some alleycats, shall we –

    There also seems to be a fair amount of argy-bargy and aggravation within one of the cats, as in the back legs and front legs aren’t in tremendously huge agreement about what to do. It seems to be a uniquely American problem – other countries have it set so all the elections happen at once so parties have to agree and set up coalitions before they get to throw their weight around. I can see why the Americans might want to space the elections out temporally, because of the sheer scale and logistics of the place. But it doesn’t seem to be reflecting the will of anybody at the moment 😉

    The stock market has been terribly boring this year, rocketing away from January and no really good buying opportunities, but now the Ermine’s snout is getting twitchy with the scent of a good fight brought on by the Americans, which should hopefully make buying an income cheaper. Hell, I might even be able to diversify with a US tracker is the S&P takes a hammering, and perhaps even the USD. At the moment the S&P500 is just too dear for me. Others markets will take a hit too, perhaps time to consider the FTSE100, which starts off more reasonably priced. It could be like being a stoat in a hen-house 😉

     

    Notes:

    1. in retrospect this was dumb, I should have gone 8k:2k or some such split, to spread my targets and opportunities against political fiddling
    2. Something vaguely disturbs me about encouraging Sids into a single, undiversified stock without at least providing them with the background information – which is that if you really are a new Sid to the stock market perhaps you should stag this issue and invest in a FTSE tracker with the proceeds in the interest of diversification. At least they should be exposed to the idea and why some people consider this a good idea. Unlike commercial IPOs such as the Direct Line one Vince Cable presumably owes his electors some duty of care 😉
    3. The Guardian confused me with the statement “Vince Cable, the business secretary, said that everyone who applied for less than £10,000 of shares would receive shares worth £749.10” which implied I would have been outta luck. However, according to TD direct “all members of the public who applied for shares, up to and including applications of £10,000 will receive an allocation of 227 shares which is equivalent to £749.10 at the offer price.” so I would have just scraped through but with half as much allocated.
    4. I think the Green Party is in favour of that “We support high-quality public services run for people not private profit. We will protect the NHS and Post Office from privatisation and return our energy, water and rail networks to public ownership.” but they aren’t big at the moment
     
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