Gambling on the Sharemarket
Part 1 - INTRODUCTION
'I never let my schooling
interfere with my education.' (Mark Twain)
Note: This section was written at the end of
the 1990s and includes references to many people and events from the
1980s and before. We feel that rather than updating it every few
years, it retains more charm and historical interest to leave it in
its original form. All the important concepts are still relevant
today, and apart from CFD trading and short selling which are not
covered, it will still serve you well as a broad introduction to and
education on the Australian sharemarket.
Warning! It has become obvious to many ordinary share market
investors that the Australian market allows for all manner of
unscrupulous and illegal practices that rig the market in favour of a
pool of 'insiders' comprising investment bankers, algorithmic or 'high
frequency' traders and crooked company directors.
The taxpayer funded bureaucracy tasked with overseeing the market and
stamping out illegal practices is the Australian Securities and
Investment Commission (ASIC), but it consistently fails to prosecute the
vast majority of criminal cases falling under its jurisdiction or
provide anything resembling a level playing field. Maybe we should
dissolve ASIC and pay the hundreds of millions of dollars wasted on this
toothless tiger into a fund for compensating investors who can
successfully convince a small panel of retired judges that they were
swindled in market shenanigans?
If you're looking for a safe and secure deposit method for your online
gambling, then these pay by sms casino sites are the
perfect choice.
For an excellent and brave expose of some of the corruption rampant in the
Australian sharemarket, we highly recommend Ben Pauley's two part series '
The Unspoken Crimes of the ASX' published in the
online journal
Independent Australia.
Don't
ever be told otherwise, investing in shares is a
gamble.
Shares can fall and companies do
go broke.
Buying and holding 'blue chip' shares, the method
commonly recommended as avoiding the pitfalls of market volatility, is
clearly one way of minimising the risk, as is the purchase of warrants
or put options to protect a portfolio. But the oft quoted maxim that
the market always rises in the long term does not mean that you
will not lose.
In the 1980s Adelaide Steamship was regarded by
many as a blue chip company before analyst Victor Schvets' famous
'emperor's not wearing any clothes' analysis, that saw the rapid
demise of the stock. Even the mighty News Corporation was once nearly
brought down by a small American bank demanding repayment of a
miserable $10 million debt at an inconvenient moment.
One of our readers, John Langer, sent the following
fascinating piece of information:
'Remember 'The Deerhunter'? The characters came from a community of
steel workers. It was their money that small bank was trying to
protect when serving Murdoch with a collection notice.'
The market may always rise in the long term, but
consider these two facts carefully.
a/ The 'long term' may be very long
term.
b/ The market may have risen, but some of your key
stocks may have underperformed the market, or even failed.
Having said this, undoubtedly the
sharemarket is one of the best forms of gambling around.
Continued...
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