Thursday, December 3, 2009

A share tip from a certified sucker who is otherwise highly sceptical of ‘a sure thing’

Looking through this blog and the different entries in order to track down any literals and other cock-ups which have so far remained unspotted, I notice that, apart from the interminable account of the various decrepit cars I have owned - one last instalment still to come, but don’t hold your breath because even I am becoming a little bored - many of the most recent entries have centred on newspapers, journalism, newsroom and hack. So it’s time for a little respite: I should like to give you all a share tip.

I am not at all wealthy, but I do own some shares after transferring my miniscule pension pot from Abbey Life (motto: Trust Us, We’re Not Quite As Bent As The Rest) to a SIPP (self-invested pension plan). Years ago, in fact as long ago as the recession in the early Nineties, I reasoned that one of the few companies actually to thrive in a recession would be pawnbrokers, and that were I ever in a position to buy shares, I would invest in a pawnbrokers. I didn’t take all my money from Abbey Life to invest in the SIPP until about 2005, but once I had decided to do so, I looked up (the posh, rather, pompous technical term is researched, but I will stick with the phrase ‘looked up’) which of the pawnbroking firms was listed on the stock exchange, and I came across Albemarle & Bond. I bought 3,117 when they were around 158p and they immediately shot up to 220p (well, not immediately, over a matter of weeks). In 2007, when they hit 240 I sold 2,000. Over the next to years, they were up and down, but generally hovered around the 210 mark. In the late autumn of last year, they were even over 270, but I wasn't paying attention and missed out on selling (the theory being to sell, wait for the price to plummet, then to buy again. That’s the theory.)

However, in recent weeks, they have taken another lead up and are now at 248, while the rest of the market, though recovering, is lagging a little behind such enthusiasm. We all know, or think we know, what the business of pawnbrokers is, and it might strike my more sensitive readers as being a bit - well, off - to profit from the misfortune of others, but, in fact and by chance, I have discovered that pawnbrokers are also largely engaged in the business to lending money to people who are by no means on their uppers.

So my tip for the day: buy Albemarle & Bond. I doubt very much that they will be going bust in these next few years.

If you want to find out more about the company, you can do so here.
A while ago, I came across a firm of bailiffs who were also quoted on AIM and was considering buying into them. But I had a word with a chap on the City desk who pointed out that firms of bailiffs do not always attract characters of the highest moral fibre, mainly because of the kind of work they are engaged in, so it would not be unfair to assume that when it came to their bookkeeping, they might not be as scrupulous - and, crucially, might not treat their shareholders as fairly - as they should do. I took heed of his warnings.

By way off illuminating why I am otherwise rather sceptical of ‘sure things’, I’ll take you back to 1973 when I lived Milan for a while and was teaching English, and when I was caught hook line and sinker by a gang in one of the Metro stations working the three-card trick. In their case, it was a three blocks of wood, each with a rubber band around it and one had a postage stamp stuck to its underside. I watched for a while and thought I noticed that on the block with the postage stamp the rubber band was skew-whiff. ‘Ah,’ I thought to myself, ‘I don't have to keep an eye on the block with the stamp, I just have to look for the block with the skew-whiff rubber band when he stops.’ Well, and I’m sure you’ve guessed, they were streets ahead of me.

They always know a sucker when they come across one, and I was - and possibly still am - one of the biggest. I had already been hooked when a previous ‘winner’ had enlisted my help while he got his money out. He took my hand and placed it on the ‘winning’ block, thus making me feel a part of his victory and ensuring I was persuaded it was possible to win. I knew I had been well and truly suckered as soon as I told the guy to stop and I would point out the block with the postage stamp. I knew because of the certainty with which he asked me to hand over my stake. I knew! But I handed it over anyway and, of course, I was wrong. I reckon that the gang was at least 4/5 strong and consisted of the player with the rest of them making up the crowd around him, ‘winning’ and thus attracting suckers like me. To this day I feel stupid. Oh well.

1 comment:

  1. Well written post, most informative... thank you.