January 2011 Archives

Like most people of my age, I don't really get Facebook. I can see that it's an interesting exercise to get nearly everyone with an internet connection to post their contact details in one place, and to add a bit of photo sharing and messaging to go with it. But can this be worth fifty billion US dollars of anybodies money? Most of us will have never handed over a bean to Mark Zuckerberg, who must by now be employing a lot of bodies and hardware not to mention bandwidth.

I however did get a tiny insight into why it could be valuable. In my last post I talked about setting up an investment club. I decided, just as an experiment, to advertise this fact to anyone within 40km of where I live, via Facebook. I thought to myself 'What would Larry Page do?' and googled for 'advertise on Facebook', and landed here. I logged into my regular FB account (none of the complexity of setting up an advertising account as required by Microsoft or Yahoo). I filled in a few basic questions, mainly just the page I wanted the ad to go to. FB did the rest, practically writing the copy by scanning the destination page.

I then was able to target. This is what, in my view, makes FB a killer app. I could specify location (easy enough: 40km around Stevenage, my nearest town), age (no minors), and people who had specified in their profiles that they were already interested in investing. This market is a few hundred people.

I then specified how much I was willing to spend: no more than 50p a click, and a couple of quid a day, and I was done, bar selecting a random (free) image to adorn the ad. Start to finish ten minutes, max. My ad was approved with a half an hour - it is remotely possible that a human was involved in this part of the process, but I doubt it.

Now I will simply sit back and wait for the emails. I need to attract one or two percent of the market to have a viable number to form a club. The advertising will cost me a few pounds. I will report here if it works. It may be that 50p is too low a bid to get my ad displayed: unfortunately well-heeled brokers and IFAs are completing with me for the target market, which is the downside.

I will report back. The proof of the pudding is in the eating, but my initial reaction is: don't short FB yet (not that you could anyway, because it's still a privately-held company!).

I decided as a sort of new-year resolution that I'd join an investment club. I know a few people who trade shares and other securities but I do not belong to any organisation dedicated to securities investing. I am a member of a few groups that discuss (real) property investment, but usually the propery people do not have an interest in or experience of stock (or bond, futures, options, FX, contract for difference etc. etc.) market investments.

I know a bit about this topic, but I'm always interested in hearing other's opinions on this, not least because the a pure rational approach to investing is not a sure-fire way to riches, as I know to my own cost.

Investing in the UK is very frustrating. The whole industry is regulation-driven model, with investors directed into collective investments with high fees and poor performance. Individual investors are terrified of investing directly in the stockmarket even though all the evidence suggests that they are likely to do just as well as highly-paid fund managers, even if they choose stocks at random.

Proshares used to offer some support for investment clubs but, as you will see from their own bulletin board, their service is practically moribund. Time To Trade has a better-looking website, but as you will see from their Herts Directory they don't exactly have a lot of clubs listed.

I have been contacted by someone in Herts who is interested in setting up a club. I'll probably post a few things on Facebook, but if you are interested in joining a club to discuss investing then get in touch. I'm not convinced about setting up an actual legal entity which will do investing, as it seems to me that unless we get a lot of interest (and a lot of capital to invest) the hassles with accounting and tax statements will exceed the benefit of simply discussing market trends, etc. and investing in our own portfolios.

There are some wonderful sites out there for tracking investments. I just signed up to Wikinvest. I'm not sure how well this copes with UK-listed stocks but it does a brilliant job with US listed equities.

If you live within easy reach of the Stevenage area, and would be interested in joining a club to meet, say, once a month, please drop me a line to steve.hemingway@gmail.com.

Malcolm Sergeant reputedly stated that he would try anything once with the exceptions of incest and Morris Dancing. I have not personally been tempted by either, but I have just had my first experience of line dancing, or Scottish dancing, or at least something with a distant relationship to dancing at a Burns Night Supper which took place in the last few hours in Knebworth Village Hall.

For practically the whole of my adult life I've been using computers. When I was at school we had a teletype rigged up to an acoustic coupler to the City Hall computer, some kind of ICL machine with a magnificent 128K of core store. Unlike most people of my age, I don't consider them anything more frightening than a TV or radio.

I instinctively value digital information more highly than physical, tangible stuff. When I think of filing something, I think of putting it into a database. Communication is most easily retrieved when it was sent by email. Music is best transferred as an MP3 file. Most institutions, and people, I have concluded, just don't feel like that. They may use an Amazon Kindle, but they much prefer to hold a real physical book, or a paper newspaper or magazine.

People also prefer to interact with people in person. A video link is preferable to a telephone conversation is preferable to an instant message chat is preferable to email. A face-to-face meeting is preferable to them all. We are governed by people coming together in rooms to talk, with paper agenda and minutes as props. Important decisions require physical meeting.

I recently read Tony Blair's autobiography. Famously he had never sent or received an email, at least until he ceased being prime minister. Gordon Brown spent hours every day writing notes by hand, in his execrable and illegible handwriting, rather than using a keyboard.

The other day we held a sort of party. Lots of young people were here. A good number of hand-written thank-you cards and notes were sent. Nobody sent an email expressing the same thanks. Even amongst those who have never known a period before email in the home, it's somehow a cultural given that thanks are expressed by something tangible.

This is all incomprehensible to me. Debates in Parliament could much more efficiently be conducted via Google Wave. MPs could sit at home, or in their offices. Considered, checked and grammatical contributions to the debate could be depended on. Oh, but no, Google has abandoned Wave, because nobody used it, in spite of its manifest potential for saving the planet by rendering travel to meetings obsolete.

The desire to physically touch things, and come together physically remains a mystery to me, but, it seems to me it must be something to do with extra information transmitted above and beyond the factual content of the conversation. The subtle indicators of, well, something beyond me, anyway. This is fine, but it does make me feel excluded. Not only do I not receive this information, but those who do don't seem to be able to communicate to me either its content or its function. All very odd... You can leave comments you know!