Saturday, September 20, 2008

Financial Casino

The stock market = capitalism casino. In essence people are placing bets on the future direction of companies. Sometimes it works - sometimes it doesn't. Thats the nature of risk.

Of course, taking on extreme levels of high risk is ... well risky and stupid. People are suppose to be thinking carefully about investing in these companies - based upon their earnings, and net worth, etc.. and directing the right sum of funds to them. Most people know of this subconsiously - its just plain common sense. No one goes and pays their entire lives' savings in a single lottery. But the stock market gives the veneer of respectability. Putting large sums of money in crap stocks or not heeding warning signs is just the same as gambling at the casino and leaving your kids in the carpark.

Sometime back I made comments about ANZ Bank - but the real shocker is Macquarie Bank. Check it out when you have the time. It listed at $5 back in the 1998. And it went all the way up to $100 last year. A pretty rock solid merchant bank.

Since then its gone on a roller coaster ride. It was at $50 a few weeks ago then fell 50% to nearly $25 yesterday in the horror crash. Today its risen 30 - 40%.

The chart totally broke down yesterday. All bets were off. But if you had some loose change - and I mean loose change - pennies in your pocket sort of thing - you could have made some good beer money yesterday.

Remember Pigs get slaughtered - cos they're greedy.

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