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EASY LOSSES

Why has it become so easy for ordinary people to lose money on stocks and shares?

Perhaps that is the wrong question. If we understood how it has always been very easy to make lots of money on the stock market, we could then see why, when we try to get a share of the action, we join a losing game.

Let me explain this to you, but you will need to follow me very carefully, otherwise you will imagine I am talking double Dutch.

The first point is this. If you have a lot of assets you can borrow a great deal of money, against those assets and invest that money on the stock exchange and win every time.

But you need to be an insider, in order to have those assets. Being an insider, it is almost inevitable that you win on the stock exchange, unless you blot your copy book and become an outsider.

How can an insider obtain assets? Here we enter Alice’s Wonderland.

You borrow money and call it an asset. From there on out the sky is the limit, provided you keep your nose clean, despite having made it so dirty, it can never ever be clean again.

But you are on your way. If you cannot make a million or two you are a failure.

Just realise, that when you or I decide to have a flutter on the stock market, we put money on the line. Don’t ask your stock broker to accept your credit card. You need money, or goods and shackles, that actually exist and from which you can be dispossessed.

The odds against making money with money when the top boys are making money with credit, are so stacked against you that no honest broker who knows the ropes will take your money.

You have heard a lot about sleaze, about Enron, WorldCom,etc.

The world of high finance is a tooth and claw jungle run by very smart people who will take your all, without a scruple.

Adventurers they call themselves and they intend to make a pot of gold at your expense.

In the real world, in which we live, we do not expect to receive something for nothing. We like to feel we put in an exchange for what we get. Perhaps score a goal, save a goal, sing a song, dig some coal, help build a car, deliver letters or even pull pints at the local.

But fair exchange does not easily create billionaires or even millionaires. Financiers live in the virtual world, where fast bucks free of responsibility and bereft of integrity creates a mirage of respectability and class.

Every human being values his self respect, above even his own life. Never stoop so low as to emulate the money men.