by The Investor
on August 25, 2009
Mark to market is the act of valuing an asset at its current market price, as opposed to its book price.
Primarily an accounting practice, mark to market is relevant for private investors in several ways:
- If you borrow money to invest, you could face margin calls if your account is marked to market.
- You mark to market when working out your current net worth, by estimating the value of your home and other illiquid investments.
- Discovering assets owned by listed companies that are NOT marked to market — and so are being carried on the books too cheaply — can unearth hidden value.
Some blame mark to market for the credit crisis of 2007 to 2009.
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by The Investor
on August 22, 2009
A quick introduction to this week’s suggested articles, as I’m keen to get outside — the sun is shining and it looks like the Great British Indian Summer of 2009 is underway.
It’s therefore time to dust off the BBQ, which I’ve barely used since the Great British Heatwave back in May.
Since then it’s been the Usual Great British ‘Meh’ Summer of Cloud and Intermittent Showers. It’s almost painful to contemplate that we’re nearly into September.
New motivation to invest: Creating an escape fund. 🙂
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by The Investor
on August 19, 2009
I was drinking with a friend last week when he congratulated me on my purchasing Lloyds shares.
Lloyds was up over 40% in just a few weeks. Result!
My friend had read about the initial trade on Monevator. Generally I don’t discuss share trades in real life because:
- Share trading bores most people.
- It’s extra pressure when the trade goes wrong.
- You have to buy the drinks when a trade goes right.
Sure enough, my friend decided I could afford to buy him an extra round.
Stock picking is hard — as I’ve said before, you’re usually much better off investing through index trackers. (I do with much of my money.)
Adding peer pressure or social chit chat brings new awkwardness to a difficult task.
Even when your trades go right, you can delude yourself you’re doing much better than you really are — especially when your friends are congratulating you.
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by The Investor
on August 18, 2009
I have already read a couple of books by panelists from Dragon’s Den, the BBC TV show that puts would-be entrepreneurs in front of self-made millionaires for their money or their ridicule.
On Saturday I picked up another — Theo Paphitis’ Enter the Dragon
— in a Waterstones’ 3-for-2 offer.
Perhaps I’ve become a Dragon’s Den groupie? I’m certainly not reading these books for their literary qualities.
100 Secret Strategies for Successful Investing by Richard Farleigh is like the brain dump of a share bulletin board poster with verbal diarrhea. There wasn’t much takeaway value, though Farleigh’s rags-to-riches tale was heartening.
Duncan Bannatyne meanwhile took time off from snarling at the inventors of dog treadmills and revolutionary shower caps to write Anyone Can Do It.
Bannatyne wasn’t promising much more than a pep talk, but his book worked better than Farleigh’s, perhaps because Duncan made his initial money selling ice creams, whereas Fairleigh earned his wodge investing other people’s billions — not really an option for most of us.
So what about Theo Paphitis? The Dragons are famously competitive: Does Theo measure up?
Enter The Dragon: How I Transformed My Life and You Can Too is at least snappier to read than its title.
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