Thursday, 14 June 2018

Bulls, Bears, and Coffee beans.


                                Image associée

I have been an investor in Equities since the age of about 15, I was a much later punter than the infamous Rees-Mogg; although, like Rees-Mogg, I bought my first shares whilst still at school (any similarity ends there!).

On leaving school I worked on the London Stock Exchange as a 'Blue Button'; a sort of trainee, dogsbody, stockbroker. Share trading was an everyday part of my early working life.

Much later on, back in the early 1980's, I became interested in the London Commodity Exchanges, and joined a small Wheat/Barley trading syndicate. Eventually my interest became concentrated on the trading of Coffee futures (above is the London Metal Exchange; I couldn't find a picture of the 'soft' Exchanges).

I visited a well known Commodity brokerage; established an account, and continued with my 'theoretical trading' at home for another year or so, before making my initial trade. I studied charts, and followed prices on the very basic Ceefax TV service. I learned as much as I possibly could, being away from London.

Commodity futures trading is much like Equity trading in that prices go up as well as down; but opposed to Equity trading, one only places a 10% margin on any Commodity trade, making one's profits or losses multiplied by 10.

This type of trading is not to be recommended for people of a nervous disposition or a weak heart. It is extremely stressful, and full of serious financial pitfalls. Many a bankrupt has lost everything through his/her Commodity trading.

As it happened all went well, and as a result I instantly decided to quit whilst ahead. I walked away a happy man, and have never returned. It was simply far too risky for someone with my limited amount of available assets. My aim had been fulfilled, and that was that.

Trading both Equities and Commodities can be great fun, and occasionally profitable; but take my advice..... stick to the Equities.



36 comments:

  1. A very limited interest posting today, even my own interest in the subject is very limited.

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  2. It's like gambling; don't play the win.
    I like the photo of you yesterday. I hope the sun is shining there today. I wish you feel better today Cro. You are probably missing the grandchildren too.
    Greetings Maria xx

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    Replies
    1. I do feel better today; the gloom is lifting.

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  3. Many are the tales of the commodities speculators who forget to close off their positions who answered a knock on the door "where do you want me to tip these coffee beans guv?"

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    Replies
    1. It's a mug's game. Luckily I had enough time to pay attention to what was happening. I very nearly sold several times before eventually deciding that enough was enough. I can tell you; it was a huge relief. I would never do it again.

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  4. Mr. Cro a gambler, that's were you got your living from. How funny. I think painting was only your hobby.

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    Replies
    1. Painting is my profession. I have a First class Hons Degree in Fine Art (painting). If you think you can make money from painting, then you are mistaken. I have no qualifications in 'Gambling'.

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    2. Congratulations . Some painters make much money it depends. Gambling was a joke I always admire people who make online trading, I have a Malaysian friend who made her fortune like that.

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  5. Here are the current Bet-at-Home odds: Brazil 5.00, Germany 5,50, Spain 7,00, France 7,50, Argentina 10,00, Belgium 12,00, England 18,00, Portugal 25,00. If I theoretically place one pound on each bet I stand to win a maximum of 17 pounds or lose a maximum of 3 pounds. Of course I could lose the lot if an outsider wins. I don't bet in the real world. The only shares I ever had were from a bank that used to be a building society and went belly up so they were worthless. I'm happy and safe with my premium bonds etc..

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    Replies
    1. Stick to football. At least you'd amuse yourself whilst waiting for your losses.

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    2. Its a great sport. The World Cup begins today!

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    3. On RT they just said that football was brought to Russia by a Scottish shipbuilder called Macpherson. They even interviewed a couple of his descendants. Great stuff.

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    4. There's an old-boy from my alma mater in the England squad. A Goalie called Pope.

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  6. Gambling is not something I am comfortable with...I don't have the nature for it.

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    Replies
    1. The markets ARE gambling, but hopefully with some expertise thrown in.

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  7. For the amateur, in most arenas, never bet more than you can afford to lose. The Pro is betting other peoples money!
    I played Pontoon with my Grandad - with the gas pennies- and learnt that the Bank usually wins.

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    1. That is the problem with commodity trading. As you only put-up 10% of your deal, you stand to lose a lot of money. Stick to Pontoon.

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  8. Brewing Dolphin asked us what risk we wanted to take ..... I said medium my husband said low ..... no high risk for us !!!! Sending hugs from Hertfordshire. XXXX

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    Replies
    1. I don't blame you. High risk is fine when it comes-off; not so fine if it fails.

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    2. BD are probably as safe as anyone.

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    3. I used to meet people who were totally unsuited to Stock Market investing, thought that low risk meant no risk, it doesn't, and I told them so. Look at GEC, always considered one of the safest investments you could have, got into the wrong hands and down the plug hole it went. Even explaining a good, diverse portfolio of investment to spread risk, some would say at the end "does that mean we could we lose money then?"

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    4. If only we could guarantee that they would all make money!

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  9. How exciting. Well, exciting to me.

    Whilst I am not a gambler per se I am not risk averse. As long as they [the risks] are calculated and Lady Luck is awake and on board. And yes, it's always best to quit whilst you are ahead. A bit like leaving a party when it's in peak swing.

    What I'd like to know is what made you get into investing at such an early age and then continue after leaving school. Was it a pragmatic move, curiosity, necessity? Pray, tell.

    U

    ReplyDelete
    Replies
    1. My father was a great follower of the Stock exchange, and had quite a big portfolio. I got the bug from him.

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  10. Gambling is something that I have never considered as a potential addiction. Most other things, yes, but not that.

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    Replies
    1. If gambling can be practiced without it becoming an addiction, then it's probably OK.

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  11. I have noted some words unfamiliar to me. I've always gone for safe and now soon to retire with a substantial superannuation from work, I will go very safe with what is done with payout.

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    Replies
    1. 'Safe' won't make you much money, but at least you won't lose it all.

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  12. I hate gambling, but during our working years our employers had our pension funds in the market. Sometimes we were happy, other times scared. In 2008, we were devastated. We kept working to recover and stay safe today. We only invest in our grandchildren now.

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    Replies
    1. My late father had a portfolio of defunct company certificates that was about an inch thick. He was a winner in the end.

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  13. Anything more complicated than paying my newspaper bill I leave to the man who advises me where to put any spare money I might have.

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    Replies
    1. The problem with 'financial advisors' is that every time they need a bit of cash, they advise you to switch investments, and cream off their commission. Much better to phone your broker, and do the job yourself.

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  14. Gambling with Other People’s money is not for the faint hearted, either! In the Olden Days I too traded derivatives - bonds, however. The punishment for that particular Sin was to fall into a burnt out heap in the mid-90s, with what felt like a fried adrenal gland. I discovered that even my teeth buzzed when I was stressed. It took positively years before I stopped dreaming Prices and Trades! Always find it laughable that the Amateur Investor is now encouraged to play around in these troubled waters (Black-Scholes What?); even those paid to do so can spectacularly explode. Zero sum game, people!

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    Replies
    1. Luckily my London SE days were before computer trading. We worked with multiple land-line phones, a mechanical adding machine, pen, and paper. I don't think I could have coped with computerised dealing rooms. I hated my time there.

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    ReplyDelete

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