Sean O'Grady: A tale of previous hits and misses – but I’m in for Royal Mail shares...

 

Once upon a time I was one of those people who refused to buy privatisation shares on the grounds that the Government (“wicked Tory” then as now being the usual adjectives attached to that phrase) was selling something that already belonged to me.

Hence I missed out on the first happy “stagging” opportunities in the likes of British Telecom and Jaguar Cars. In those days, unbelievable as it may seem now, multiple applications by individuals were not only allowed but almost encouraged.

Anyhow by the time Rolls-Royce came up for sale in 1987 I did buy some; apparently there’s an old stock market saying that “no-one ever made money buying Rolls-Royce”, but they’ve gone from £1.70 to about £11 now, the jewel of British manufacturing.

More through luck than judgment I did miss out on the BP debacle of that same year; when Nigel Lawson, as Chancellor, sold off the remains of the UK government’s holdings (it was nationalised by Winston Churchill during the First World War) it was priced to sell – clearly at a discount to the market price. However between the pricing announcement and the listing itself came Black Monday and a market crash, and a slump in the BP share price. Some unlucky punters had already sent in cheques, and were lumbered with an obligation to buy shares that were cheaper to purchase on the open market. Oh dear.

Apart from that, though, privatisation has brought modest riches to millions, though rather diminished since BT went from £15 in the dot.com boom to about £3.50 now. I have no doubt the Royal Mail will do well - under-priced to avoid political embarrassment, its pensions black hole filled in by the taxpayer, and a mild play on the growth in e-commerce.

The only risk is the burden of the universal letter rate; if past experience is anything to go by a future government or regulator will in due course relieve the Royal Mail of that problem, especially if there is any danger it would push the firm into financial trouble. No government could tolerate the UK being the only country in the world without a functioning postal system.  Banks aren’t the only places where moral hazard can work in an  investor’s favour.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Admin Assistant

£12000 - £15000 per annum: Recruitment Genius: An expanding Insurance Brokerag...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders