Because I am a chicken. If I weren’t we would be filthy stinking rich but then we wouldn’t have the fun of writing this blog and you wouldn’t have the pleasure of reading it.:)
Let me explain. Many times in my life, I have seen what looks like a good opportunity but either not had the cash to risk or the nerve to invest. On other occasions I have predicted an outcome which I saw as inevitable long before it actually happened, again without taking a profit.
If I were less risk-averse, I would take a closer interest in the financial markets. In this case, the tool of choice would be spread betting in the financial markets – for example you can estimate the value of bonds issued and place a bet on whether more or fewer bonds will be issued or what yields would be achieved, or the value of one currency vis-à-vis another. You are paid according to how much over or under you were, assuming you got it right of course. If you get it wrong then you end up paying by the same rule, not just losing your stake.
In spread betting where there are no favourites – it is the other side of derivatives which are really the engine of the market we don’t usually see. Derivatives have got a bad name but they are essential so you can pay for your holiday now rather than risk paying more (or less) when you go.
Enough of this – what other claims can I point to? Quite a few I think, even off the top of my head.
Let’s start with something recent. Remember my post about Angela Merkel back in June and how the Germans were wrong, putting the whole Euro project at risk? Perhaps I should have bet on this or some other financial issue like the volume of bonds that will eventually be issued by the European Central Bank despite protestations from the Bundesbank. Recent events where Mario Draghi has at last came out from his bunker suggest I was right but the market has caught up with me so it isn’t very profitable now.
During the first fuel crisis in the ‘70s I was offered a beautiful classic Bentley car for £700 ($1,140). A snip! This car cost many tens of thousands of pounds. I was very young and could not afford to insure it let alone put petrol in it but I still regret not having had the nerve to buy it. A couple of years later it would have been worth many thousands as the market recovered.
In the 1980 Budget I predicted that VAT would rise substantially from 8% (VAT is a sales tax in the then European Economic Community which the UK had just joined). I was right – it jumped to 15% overnight, not predicted by the professional pundits.
Or the few out of many houses that I have seen and would have loved to buy because they had that something. I’ve always had an eye for property but only bought for a home which, as Maria has pointed out, is a liability not an asset.
And then, in 2001 Maria was truly gobsmacked when I told her that our son would be born on a Tuesday. I didn’t say which Tuesday but I was very sure and should have taken a bet. I was right but it wasn’t just guesswork – with a stubborn darling wife and infant (as it transpired), I reckoned it would need the surgeon’s help which wouldn’t be scheduled over the weekend so give a day for an induction to fail which led me to the clear conclusion that our son would arrive in this world on Tuesday. And he did!
So in the end, never having bet a penny (I have done the Lottery a couple of times), perhaps I have been wrong all my life. And perhaps Maria, whom I once saw feed £25/$42 (at least that’s what she admitted to me) into one of those sliding platform betting machines, was right all along.
Is it time for change?