Saturday, October 17, 2009

Naive and Sentimental Investor

The above title was probably the apt desription of yours truly in 2002 when I first started looking at personal shares investing seriously - so seriously in fact that I joined up to Sharecrazy then as well - and have enjoyed using that investment bulletin board ever since.

In 2002 I followed much of the accepted wisdom of investing in the stock market like 'buy and hold', 'think long term', 'only invest in what you know', 'sell in May and go away', 'do as Warren Buffet does' etc etc. I broke a few rules too such as 'never fall in love with a share', 'stick to FTSE100 dividend earning shares' and 'avoid AIM resources stocks'. Like many private investors then and since, especially immediately following the slump in share prices that was part of the global recssion fallout, I saw the value of many of my share holdings fall.

This experience has made me hopefully less naive, more cynical and at least of late, the outcome appears to be that possibly some profits are in sight. Whether the sighting proves to be but a mirage more time will tell but really the only rules I try to stick to now are to avoid investing in companies the ethics of which or of their products or serviecs are patently questionable and to avoid shorting ie selling shares I don't own although the UK government encourages that kind of gaming by taxing the buying of shares with real money and any profits made therefrom but not taxing the selling of other people's shares nor any profits made from that practice.

Although I still harbour the belief that paying ready money for real shares in companies is investing rather than gambling, the distinction between the two is looking increasingly blurred so much so that some recent shares purchases are proving more of a gamble than investments. Sadly too they appear to be proving more profitable than maytrees minor's recent foray into the stock market. Take two examples:

Maytrees minor invested recently in some TESCO shares. Tesco is a FTSE100 co. of good repute with some international presence and paying divis on its shares. He paid around £4 each for his shares and their price is now around £3.75p Shortly afterwards I was looking at an attractively named company - Nostra Terra Oil and Gas Company plc - the shares of which were at that time priced at about 0.35p each and quoted as one of those dreaded resource stocks on AIM. Last week Nostra Terra announced for one of its motley collection of oil/gas hopes that:



Nostra Terra is pleased to announce a hydrocarbon discovery
on the Boxberger property in Kansas, USA.

IE that it had found two gas resevoirs not in some dangerous (for investors anyway) part of the globe but in the USA that moreover have never been produced before.

Despite there being no clue as to amount of gas etc investors piled into NTOG's shares and their price has now soared to 0.86p ie over 100% gain for the early birds and still a tidy gain though less so for those who like myself 'invested' later.

Obviously I'm pleased to have made a gain on paper at least with this share but it saddens me that by the traditional investing yardstick at least, it is more of a gamble than an investment. I wonder if this type of 'investing' will prove more fitting for personal private investors in C21 than the traditional FTSE100 type.

Time will tell.

2 comments:

  1. Well I sold my NTOG shares today at up to 1.31p
    and had I waited they would have been worth 1.70p.
    Still a 116% or so gain in a barely a month is not bad. Sadly it puts TESCO shares to shame.

    ReplyDelete
  2. Did something I don't usually do but upon
    seeing NTOG mentioned in FT today, I invested in the co's shares at just under a ridiculously high 2p at 0801 hours and sold them at
    2.31p+ some 15 minutes later.

    That alas, may be what C21 investing is coming to.

    ReplyDelete

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