As I look on nervously through my fingers, my very sensible approach of keeping assets in cash and money market deposits (but not in euros) and then battening down the hatches and sticking my head in the sand would appear to be the way forward...

I’ve been watching the stock market with a mixture of fear and fascination recently. Mostly fear though. It definitely hasn’t been pretty.

Equities in general are extremely laboured of late - rather like a spent horse that’s struggling over the last fences of a race too many and looking condemned for the glue factory.

The bad news continues, and just yesterday I note that Greece’s government bonds had their status cut to JUNK by one of the ratings agencies. An inevitability of course, but another reason for the market to ratchet down another notch.

A brief aside on these mysterious ‘ratings agencies’ that are so often maligned in the financial pages and sometimes blamed, rightly or wrongly, for some of the sub prime/CDO/yadayadayada woes that started all this mess:

Surely someone should have realized that their names ought to have given us a clue. With names like ‘moody’, ‘standard’ and ‘poor’, surely were we not on a hiding to nothing?

So as I increasingly look on nervously through my fingers, my very sensible approach of keeping assets in cash and money market deposits (but not in euros) and then battening down the hatches and sticking my head in the sand would appear to be the way forward.

But as I have mentioned before here, it’s times like this when the real movers and shakers tend to step forward to make that killing. Indeed it’s times like this when people like Warren Buffet tend to come into their own:

“I simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,” he once said.

So I would imagine he’s filling his boots at the moment.

Another famous gentleman who was infinitely wealthy and who could take a punt or two was Philippe de Rothschild (1902 - 1988), who reportedly coined the phrase,

"Buy when there is blood on the streets"

I suppose he was lucky to be rich enough to have cash to throw around when everyone was bleeding.

So is it time to get greedy again?

Moving from talk of blood on the streets to oil in the gulf, I have been struck recently by how many people are sounding out the idea of buying shares in BP after their recent distress from the oil spill in the gulf. The share price has taken a hammering and people are starting to convince themselves ‘they have to be reaching the bottom’. Yes, they are getting greedy again too.

It reminds me of conversations in Dublin ten years ago when taxi drivers were talking about their portfolios of Bulgarian and Latvian properties. It all seemed so very sensible at the time. But as it turned out it was a throwback to the shoe shine boy in the days pre-Wall Street Crash. So people need to take great care.

Someone sounded me out last Friday about buying shares in a company that seemed to have ‘definitely reached the bottom’ in their view. As ever my policy is never to give advice to a friend for two reasons. Firstly because they are my friend. But secondly and more importantly I honestly haven’t a clue any more!

Anyway, my friend cracked on and bought the share on Friday. I checked the share price on Friday, and it was down another 9%. That is one big ouch.

Be wary of false economy

One of the few things I recall from college in Marketing 101, was an interesting lesson in merchandising and pricing.

The lecturer explained to us something that appears to be good value and appears to be dressed up and presented as an economy or saving is not always necessarily so. And what the retailer is capitalizing upon is this false perception they are creating of value.

It is precisely because you think the larger box is better value, the retailer can charge a higher price. You walk away happy and deluded that you have made a saving, and the retailer walks away with more margin and more revenue.

Sure enough all those years ago, I went to the local supermarket and could not believe my eyes when the 1kg cereal box family pack cost more than twice that of the 500g box. Of course I’m sure things have changed now!

Get Fit for the Summer or Get Fitted Up for the Summer?

On a similar theme, the new gym that I recently raved about on this blog has launched a ‘fantastic new offer’ for potential new joiners.

Get fit for the Summer, is the driving force behind the campaign. And the fantastic offer they are making is that you can join the gym for 3 months for the ‘Amazing’ price of ‘Only’ £150.

Well now that’s all fine and dandy, but my 12 month membership only cost me £399.

Is that immoral or smart business practice?