The Motley Fool started as an irreverent investment newsletter and has grown to become one of the most popular personal finance and investment websites. Anyone who follows its philosophy is called a `Foolish investor'.

Government flotations of state-owned enterprises are pretty much a thing of the past in the UK, but that is understandable as there is precious little left to be privatised. However, the phenomenon looks set to take off in the Irish republic, if the response to the flotation of Telecom Eireann is anything to go by.

There has been a huge response to the flotation, which has been over- subscribed. More than half a million of Ireland's 2.7 million adults have applied for shares, and that accounts for one in five of the eligible population.

Amazingly, around 60 per cent of those applicants have never owned a share before. The offer price of 3.90 euros (pounds 2.54), which is below the top of the expected range, is likely to provide investors with a nice bit of short-term profit. The government, after all, needs people to be happy with the offering.

The popularity of this offer reflects a few things, namely the booming Irish economy, the strength of the telecommunications industry, and the potential desire for owning shares among the Irish people.

Educating the population to understand and participate in the stock market is a good thing too, providing it is done sensibly and Foolishly.

The danger, though, is that people can be lulled into a false sense of security by such public flotations, which are intended to make a profit for the buyers. Most share dealings do not work that way, of course, and it can be easy to lose sight of the possibilities of losing money. Be Foolish then, small investor. Do your homework before buying shares for yourself in the open market, and don't be seduced by the easy pickings to be had from government privatisations.

A lot of Irish investors have, apparently, been borrowing heavily in order to fund their share applications, presumably in anticipation of selling quickly, paying back the loan, and pocketing the profit. People who hope to make quick profits from such flotations are known as "stags" and, though "stagging" itself is popular, the Motley Fool strongly discourages the practice of borrowing money to invest (or "gearing up", as it is often known). Fools invest for the long term, and interest has to be paid on that borrowed money. That interest needs to be covered by your returns before you start to make any profit for yourself. And, if an investment funded by borrowed money fails, you lose twice, as you have the investment loss itself, and you still have the interest to pay.

Only 9 per cent of the Irish population own shares. That is far below the UK figure of around 25 per cent who have bought shares directly, and further below the US figure, where 30 per cent own shares.

But it is perhaps surprising to learn that the Irish percentage is still ahead of Japan, the country that prides itself on the savings its people hold. Only about 8 per cent of Japanese people directly own shares, and that suggests that most people in that land have their savings in banks or in managed funds. (Not many Foolish investors in Japan, then.)

Ireland scores slightly higher than France, too, whose people come in a fraction of a percentage point behind and, believe it or not, Germany, where just over 6 per cent of people directly own shares.

So, the Foolish word still has a long way to go. But at least the Irish are heading in the right direction, with other privatisations expected to follow soon, probably starting with the national airline, Aer Lingus.

n The Motley Fool,

ebookA unique anthology of reporting and analysis of a crucial period of history
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen