Question of the day

A caller to Newstalk ZB this morning said he didn’t own shares and never would because they were too risky.

Leighton Smith responded by asking why, if shares in a company are so risky anyone would want the government to own the whole lot?

5 Responses to Question of the day

  1. gravedodger says:

    And armed with that deep understanding of how the share market works that caller will be one off the often quoted 60% who are opposed to asset sales.

  2. leftrightout says:

    I guess the caller has a better understanding nof the issue than either the blog author, Smith or the grave one.

    Shares traded on the stock market are risky as small traders have imperfect knowledge and can see their share value disapear due to poor management, or lose their shares in a takeover.

    However, and this is the point you are all missing, the government does not own traded shares in state assetts such as the powercos it so wants to sell. The government is the sole owner and therefore not subject to tha vagaries of the share market.

    The only possible downside is poor management, and if National cannot ensure excellent management of a few powercos, WHY would you trust them with the whole country?

  3. Neil says:

    Leftrightout has a naive understanding of money markets.
    I have been investing for 40 years- been through the boom during Rogernomics, was almost wiped out 1987,built up steadily since then.
    It’s the old story with an investment ethos that suits you. Youngers can recover from setbacks and can start again.Retireds can’t recover. I am one of those.People say that share investing is like gambling on the horses- my portfolio is in NZ Sky TV,FBU,FPA Appliances(not quite so good)Ebos and Telecom. Overseas shares include the Commonwealth Bank,Thomson Reuters,McDonalds,Coca Cola,Glaxo Smith Kline,Microsoft and a few more. Hardly like “investing” in a horse 23/23 in the betting.
    Haven’t sold shares for about five years and take most of my dividends in shares rather than cash. People investing in shares do not sell wildly.People talk about the Cullen Fund. Where are most of those shares from ? Overseas !
    One thing I would criticise Simon Power for is the difficulty in getting good advice for the small dhasreholder. You need to have capital gain
    A small piece of advice – if you know of the share,enjoy and trust it that’s a pretty good start.
    Don’t be like 1987 when there was a company called Energycorp which produced Christmas puddings,then exported them to the USA and then went broke.People liked the sound of the name – corp was the magic suffix.
    When the kids at school are talking shares keep out.
    It will be great to have Meridian,Genesis,Mighty River and Solid Energy in the market for people with between $5 000 and $50 000 to invest. Better than the shonky finance companies with gangster directors .

  4. Adolf Fiinkensein says:

    It’s interesting that various knuckle draggers from the uber -right are bleating about the notion that the proceeds from partial sale will be used to buy other urgently needed assets.

    Perhaps they’ve forgotten that when this policy was first flagged a long time ago, the clear stated purpose of the exercise was to use the proceeds to acquire other assets.

    You pay down debt when you have an operating surplus, not from the proceeds of asset sales.

  5. Sally says:

    LOL Neil

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: