Monday, September 6, 2021

I'm A Capitalist Now.

Ooh, my Sainsbury's shares are up today.

Yes, shares. I recently opened an eToro account (!) I've invested £750, which is a lot for me -- almost a month's wages. This works out to be about $1000. So it feels like a nice round figure.

As this is a new little chapter for me it's probably a good time to post about it.

(I'm currently $14 up !!! - the powwwer!)

My philosophy so far is quite prosaic. I want tangible assets. So my basic thinking is essentially: "I can't afford to buy a house, so I'll do the next best thing and get a little piece of an actual real-world business."

I also think it's probably sensible to go with what you know. Hence Sainsbury's. Obviously I'm starting from a position of ignorance. 90%+ of the listed companies I've never heard of ..so for the time being I'll focus on what I know -- Amazon, Sainsbury's, Morrisons, Tesco.

It's not exciting, but I know these places; I use these places. I actually like them (yes, I like Amazon). I have real world experience of them, so I can be fairly confident they'll still be around going forward.

Saying that though, and slightly more excitingly, I've also invested in some mining companies too. I like metals. (I bought some actual physical gold this year as well, which feels incredibly miserly, but having miraculously saved up some cash I've been mindful of inflation. So you can see where my thinking has been heading this year.)

I'm largely in the dark though with these mining companies. Aside from reading a few articles and Wikipedia pages, and watching a few YouTube videos, my knowledge is zero. So we'll see where things go.

They are at least tangible things to invest in however, whatever risks I'm taking. In fact, this brings me to things like Bitcoin and meme stocks, which I'll be staying well away from. I think you can make money from Bitcoin, but ultimately I view it as a Ponzi scheme. I don't like the idea of putting a month's wages into blips on a computer screen. Something which only derives its value from the confidence other people place it in.

Of course, people will often say this is no different to standard paper currencies, which equally derive their value from nothing but confidence. However, this isn't true. These currencies have value because they're backed by states. As long as there are 300m+ Americans that need to pay their taxes and bills in dollars the dollar will always have value. Whereas no-one needs Bitcoin.

Plus, people aren't really using Bitcoin as a currency. They're just buying it as an asset.

Again though, as before, this isn't to say that you can't make money from Bitcoin. You most definitely can, and people most definitely are. At the moment there are always new people coming into the market wanting Bitcoin. People like me for example, that have recently opened something like eToro. They generally think;

"Ooh, Bitcoin is fashionable, and it's up in value, I'll get a bit of that in my portfolio."

So almost everyone (except me) has a little bit invested in it, and there's an endless stream of new investors coming in adding to the pot. Helping to raise the value in their own little way. So a Ponzi scheme. (At least in my opinion anyway -- it's possible I could be missing something. Feel free to leave a comment explaining what that is.)

Perhaps if I was craftier and smarter I'd invest and take advantage of this hype too, but I fear I'd end up being one of the dupes. Left holding a big parcel of nothing when the music stops.

Anyway, I've disappeared off on a bit of a tangent. Returning to my own little portfolio my hope is to make $100 over the next six months or so. Not so much for the money, but more as an indication. If I can make circa $100 then that shows I can potentially make money actively. So I'll then scale things up and plough more time and money in going forward. If not I'll probably hold on to the shares and watch what happens, but otherwise step back and focus my time elsewhere.

Plans could change as I learn more though.

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