THOUGHT FOR MONDAY 21ST JANUARY 2008
From top share author MALCOLM STACEY
Hello Crazy Cats,
There was an article in my paper which said everything points to recession. The 'everything' included a fall in share values, a fall in house prices, a drop in High Street spending and rising costs of fuel, gas and electricity.
That was 'everything'. But is it everything? No. The number of unemployed people is not out of control. It's been falling. Inflation is not rising - not by very much, anyway.
The amount of spending that went on just before Christmas was actually up on last year. For many stores anyway. Shares may be down in value, but they went up an awful lot in the last two years, and were overvalued in all probablity.
Now I'm not saying that share prices will now rise. It does seem rather gloomy at the moment - especially as we're still overshadowed by that dodgy American mortgage problem.
But do we need to jump off ledges? I don't think so. For example, the headling of the 'everything points to recession' did not highlight the hugely growing economies of China and India.
There's a lot of money out there, gang, and it will probably be invested here in Europe. I keep reading that the Chinese are looking for British investment vehicles. And here we are.
And another thing - the article refered to falling property prices. Well, if people stop investing in houses and offices, they'll probably put the money into shares instead. That's what often happens.
But certainly don't take this little piece as an encouragement not to sell your shares. That's a decision for you alone - I'm just trying to add a little more perspective, that's all. Rock on!
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