Most investors like their shares to go up. But if you’re young or you’re buying for income, it’s better for them to go down.
Cheaper shares now mean higher profits later, or getting more dividend income for your money. You might feel bad about losing in the short-term, but in the long-term bear markets are good for your health.
For these reasons I genuinely shrugged off the FTSE passing briefly below 5,000 yesterday. If you want to read a blog screaming that the world is ending, I’m afraid you’ve come to the wrong place. Our chips have got cheaper!
Besides, this was a huge week in science that humbles our little efforts to get rich.
Lots of readers seem to be very perturbed about the end of oil. I’m not, particularly. In fact, it would help us deal with environment degradation, which is the real big threat we face.
I’m not blind to how society is driven by oil, from transport to agriculture to the manufacturing of plastics and other artificial products. I just think, so what? The Stone Age didn’t end when we ran out of stones. The end of oil will mean the end of the oil age, not of human civilisation.
Solar power, off-shore tidal power, nuclear, geothermal heating, better insulation: they all may have a role to play, or perhaps we’ll invent something new. A lot of alternative technologies look expensive compared to stuff lying about under the ground, but they’re linearly more expensive, not exponentially more expensive. It’s a solvable problem.
Here’s a smarter man than me, Richard Sears, on future energy:
Darn, I just realized he concludes with my ‘end of stones’ quip. I guess we both read the same witty economists!
Many private investors have invested in oil to a disproportionate degree, convinced that in a peak oil future they’ll be the richest folk in town.
Well, I doubt it – the little exploration companies may well get mopped up by the giants at a good profit, and the giants may diversify into other energy sources, but I don’t think it’s a case of one sector to rule them all.
Also, have they seen Mad Max? Be careful what you wish for!
Do you have a view on the end of oil? Let us know below.
When Germany decided to ban the naked short selling of European government bonds, credit default swaps and the top ten German financial institutions in response to the escalating Eurozone crisis, it was following a long tradition of indignant bureaucrats.
Regulators love to blame short sellers for exacerbating market turmoil, if not for downright causing it.
Most politicians are technocrats. They truly believe that clocking up 2.5% GDP plus inflation – year in, year out – is a credible aim for a market. Why all this Sturm und Drang? No more boom and bust!
