Every so often you have a moment of inspiration. My Mistress has a small amount of money in shares. She has a remarkable knack for buying shares in companies which either go into administration or are bought out by someone else and so regularly finds that her shares have been accidentally converted back into money, or of course nothing at all. A few weeks ago, she decided to put the money back into shares so sat back to think about what people still buy in a recession. Chocolate. It was the easy conclusion. When they are happy people buy chocolate, when they are unhappy they buy even more chocolate. As a result of this amazing insight, she bought shares in Cadbury’s. Then what happens? Another company promptly offers to buy them out and the share price shoots up. Now she has that dreadful gambler’s dilemma, should she take the money out while she’s over 40% up on the deal or should she be greedy and wait for it to go higher? Greed and chocolate seem to go quite well together, she’s thinking of sitting tight for the time being anyway.
The other share she bought at the same time was Lloyds. This wasn’t on the basis that everyone would want them in a recession, but the view that things couldn’t get much worse for the company and surely the only way they could go was up. I urged her to buy shares in dog chews, but she didn’t seem so keen on that idea. I said it would be good to have some shares in something I was seriously interested in. It was either that or a meat company.