Shortly before Christmas a journalist from a Sunday newspaper telephoned me and asked me how my investment clubs had performed since January 1st 2000 and what lessons we had learned. Telling him was a bit of a learning curve actually; it is only when you sit and analyse it that you realise what you actually have learned. Still, regular readers of this column will know that my main aim for a club is education, so that aim at least has been achieved.
With this in mind, and considering the time of year, let me therefore present...
A Christmas Profit (incredibly loosely based on Dickens' "A Christmas Carol")
Scene: The Pub. Date: sometime in December 2000. An Investment Club meeting is in progress.
"Look at our unit value, it is now just below 1!" cry the masses. "Our club is worth a fraction of what it was in March. Where did we go wrong?"
(From nowhere in particular, there is a sound of telephones, and distant calls of "Buy, Buy", and "Sell, Sell". A ghost in bow tie and braces appears to walk through the wall and hover before the meeting.)
"I am the stockbroker of Christmas past. Let me highlight what could have happened to you..."
In an instant the club's valuation sheet changes and to their horror their existing holdings have been replaced by holdings in Arthur Shaw, Orchard Furniture, Lastminute.com, Birchin, Ronson, Pan Andean Resources, Pacific Media, Interactive Investor International, Character Group, NetB2B2, QXL, African Gold and Eidos. The unit value is 0.095.
"You followed the hot tips on the Bulletin Boards. You did not do your own research. You traded your portfolio, mainly on my advice. You have lost nearly all your money. I must go, my Ferrari is parked on double yellows and I have a big bonus to spend..."
(Exit ghost).
"So it could be a lot worse, then," says the Chairman.
(More distant phones and voices. Another similarly dressed ghost materialises.)
"I am the stockbroker of Christmas future. Let me show you your next Christmas meeting..."
In an instant, the table is cleared. All paperwork, drinks and food vanishes. No member is visible to any other member. All anyone can see is the ghost.
The ghost says "You can see only me because your club is no longer. There will be no meeting next Christmas. You ignored the technology boom and put all your money into gilts, low-risk high yielding shares and other safe stocks like Marks & Spencer and British Telecom. Your portfolio was so dull and boring that the members lost interest and the club was dissolved. You didn't lose much money, but you had no fun and learned very little. I must dash now, I have no more time for you as you don't exist."
(The ghost disappears and all members can see each other again, the drinks and food are back, as is the paperwork and the current unit valuation sheet. Everyone looks at each other in stunned silence.)
"Errrr... what next?" says the Chairman. More phones, more voices, another ghost broker appears.
"I am the stockbroker of Christmas present. What are you all so glum about? You are not winding your club up today, are you? Look at the fun and education you have had in the last 12 months. Your portfolio has had a mixture of stocks in it. You have experienced the highs and lows of the stock market. You have taken risk and also played safe. You can't have it all. You're all still here, aren't you? Relax and enjoy your club. I must go, I have another 3000 clubs to visit with the same message..."
(Everything returns to normal)
"Well", says the Chairman. "There's only one thing to say..."
"BEER BREAK!"
With profound apologies to Charles Dickens and any reader possessing any literary taste, may I wish you all the best for 2001.
Fool On!
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