Private Investor: I got out of Sportingbet just in time
Saturday 22 July 2006
It's nice to see a bit of life coming back to the market. Sadly, because of pressure of work (no tittering, please) and general business lately I haven't followed my own advice and taken advantage of the market's recent lows.
Another reason is that I've had to shell out for my teeth, seeing as you seemingly can't get NHS dentistry in this country.
I imagine that isn't news to you, either. I do wonder though about how far this Government and its predecessors' proud claims about how much better off we all are, take into account huge hidden increases in the cost of living such as this.
After a course of treatment at my dentist I certainly don't have the feel- good factor, either in my gob or my wallet.
By the way such financial ups and downs are another good reason for that well known investment technique called regular saving. because while I haven't been mucking around on the stock market my usual direct debits have been quietly going through, so I have actually been putting some money into the market.
It's just that you don't notice doing it that way, so you don't even have to think. That's bad when it's gym fees or film club subscriptions (notorious rip offs) but good when it comes to most decent investment trusts.
I'm happy that I've carried on buying shares in Emerging Markets and Indian based trusts because I've been exposed to a little bit of the recent recovery in those markets.
Much more to come, long term I feel from these funds, run by Foreign and Colonial and JP Morgan respectively.
And while that's quite a nice feeling, it's never going to be as nice as peering over a precipice at the wreckage beneath, safe in the knowledge that you escaped the crash. I'm talking Sportingbet. To be fair, this company does actually make concrete profits, although obviously now not as much concrete profit as it and its fans might have been hoping for.
Sportingbet has been pulled down by the scandals affecting the rest of the industry, and I really wonder whether shares in online betting companies such as Sportingbet can recover from their recent pasting.
The most significant problem of all, was actually the one that investors always knew was there; that their business in the United States wasn't as legally secure as it ought to have been and that sooner or later that was going to be resolved by the United States Congress, possibly to the detriment of these offshore concerns.
So it has come to pass and the whole online gambling phenomenon resembles nothing so much as a classic bubble.
I think I made my mind up some months ago that the market in shares such as Sportingbet did indeed have some of the qualities of a bubble, and so I sold my shares. Thus I escaped a terrible thrashing.
I got 318p a share for them last September, and they were then considered weak after a profit warning from one of their peers, PartyGaming. After that they climbed back up to 480p, but now I notice they're at 180p. Even at this price, I have to say, I would have made money because I bought them so long ago as a curiosity. Avoiding a big loss, though, is a much more warm feeling than collecting a small profit.
I ought perhaps to be collecting some other small profits now.
Standard Life is demonstrating steady progress, up to 243p a share now. The question for lots of investors in that company, now that they've collected their post demutualisation shares, is whether to hang on for a year for the bonus issue. Unless you need the money, that seems like the shrewdest thing to do. I've enjoyed watching some other holdings make modest recoveries lately as well, especially Rolls-Royce, BT and ARM Holdings. The paper profits on those are almost enough to cover the cost of having my teeth done. Something for you to chew over, perhaps.
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