#242 – Playing the Market

19 08 2011

The bogan’s love of making a quick buck is well noted, so it was only a matter of time before it turned it’s liliputian attention span to the sharemarket and its promise of easy, maxtreme wealth. But the bogan isn’t interested in investing. In doesn’t care for fundamental analysis, P/E ratios or portfolio diversification. Even the shortest investment horizon is too long by half. The bogan wants a quick fix, a super expressway to leviathan plasmas, hot asian escorts and solid gold houses.

Taking Koshie’s advice on Sunrise, the bogan puts $5000 in a managed fund. But after a year, the bogan is shocked to learn the fund has only made a paltry 12% (despite outperforming the market by 4%). It expected to turn to that $5000 into at least $100000 by now!

The exasperated bogan then accompanies its entrepreneurial mate Troy to a seminar that promises retirement by 40. The bogan loves being in on a secret, and the seminar seems to offer an exclusive avenue to intense max millions. Two hours later, however, the bogan exits the seminar hungry, confused and dissatisfied: the free sushi had weird seafood in it, it doesn’t understand what a CFD is, and the only time it had ever been exposed to a stop order in the past was when it attempted to enter its partner’s back door without prior permission. Besides, the promised 25% per annum return is still grossly inadequate.

Its plans of becoming the next Warren Buffett buffeted, the bogan considers doubling its money at the dogs when the conversation at Thursday night poker turns to the market. “Boys,” the bogan’s business mate Troy says to the attentive crowd, “a mate of mine gave me a hot tip…” Scrambling outside in between Coronas, the bogan jumps on the iPhone to his wife. “Jade, we’re gonna be rich,” he exhorts excitedly. “Can you free up some money…”

The next day, the bogan puts the children’s education fund in Yam Aha Ltd, a highly leveraged agricultural investment scheme, growing yams in Papua New Guinea with revolutionary farming techniques. Not content with the promised 150% return, the bogan then takes out a margin loan, boosting his surefire, guaranteed return to a whopping 300%.

Initially the stock does well, prompting the bogan to gloat to his friends about ‘playing the market’ and purchase a new jetski and 3D plasma. One month later the stock has turned south as tropical cyclone Wilson leaves the summer yam harvest in ruins, and the bogan yammering. Initially, the bogan slogs it out like an ANZAC, taking solace in Troy’s sage forecast that the world price of yams is about to rocket as the Chinese government produces ethanol from yam extract. The next month, however, the stock plummets before going into a trading halt as ASIC announces Yam Aha is really a front for endangered parrot smugglers.

Forced to sell the McMansion to meet the margin call, the bogan vows to be wiser with his money in future. Until Troy tells him about the octagon scheme….