Tag Archives | The Sunday Times

Buying wine, art and classic cars is spending your cash, not investing

There are rules in place which prevent many media commentators and journalists from tipping stocks. That’s why, we see so many ridiculous suggestions as to where we should invest our money.

On Twitter recently I have been critical of journalists who helpfully suggest that we spend any recently gained additional wealth on buying wine, art, coins, classic cars and other such nonsense in the name of “investing”. As far as I’m concerned, buying a classic car is spending your money (and possibly lots more with upkeep, maintenance, insurance and running costs), not “investing”.

These journalists and others have to delve deep in the bottom of the personal finance barrel of top tips to source these alternative “investment” tips because they’re not allowed take up their weekly 500 words telling us to invest in Apple, or Microsoft, or whatever the stock market flavour of the month is. Alternatively, the go-to tip for many of these journalists is to “buy gold”.  (Gold isn’t a regulated product like stock market shares, and I’ll come back to this gold buying nonsense sometime soon).

Market Abuse Directive

The Market Abuse (Directive 2003/6/EC) Regulations 2005, sets out what are known as accepted market practices for how organisations involved in the stock markets are expected to behave in order to prevent insider dealing and market manipulation (i.e. market abuses).

One effect of this directive is that it prevents pretty much anyone that isn’t employed by a regulated financial services firm from tipping stock market shares. So, someone working for one of the top stockbrokers can do so because they have the research capabilities of their organisation behind them.

However, given that Joe Journalist doesn’t have the same backing, he or she can’t just publish a stock market investing tip based on just a hunch or a tip.

Investing in Molycorp in May 2013 was not a good ideaDon’t always believe what you read in the papers

Here’s a perfect example of why we’re being protected in this way. For the purposes of this tale, assume we’re back some time around May 5th, 2013. This article snippet shows up in a popular Sunday newspaper.

On this day, our fearless journalist told us that Molycorp – a company where the share price had fallen in two years from €70USD to €6USD – was possibly about to experience a turn in their cycle (according to anonymous unnamed tipsters).

Wow! Imagine. Given that past performance must obviously be a guide here to future performance, I could have bought that stock back in 2013 for €6USD and surely it’ll get back up to the original €70USD very quickly. In fact, it’s more than 3 years now, so surely I’d be rich already based on that advice.

And even better, because of a “kind of volatility who knows where they will end up”, I should definitely stay away from Apple. It went from €700USD 6 months previous to that article and was now trading at a measily €575USD.

Molycorp is a rare earths producer. It operates in the Resources, Chemicals and Oxides, Magnetic Materials and Alloys and Rare Metals segments. Easy enough stuff to understand – surely the tipsters do.

Fair enough, because it’s in the papers, it must be true. Dear Mr. Stockbroker, I’ll have €10,000 worth of Molycorp. In 3 years, based on the numbers above, I should have at least €100,000.

Hell of a Hunch

As of close of business May 3rd, 2016, my investment in Molycorp is worth a princely €91. Yup, a drop of 99.09% in the 3 years since the original tip above was published. Even an investment in the much maligned Bank of Ireland would have given you a 50% gain over that same period of time.

Investing at that time in Apple, despite the warnings at the time in the article, would have returned you a near 60% gain on your investment as of May 3rd, 2016.

This particular journalist would be a very big fan of gold as well. In the same period of time, a €10,000 investment in gold would now be worth about €8,750. Better than Molycorp, I guess.

Molycorp, the 5 year journey from USD$76 to USD$0.05

Molycorp, the 5 year journey from USD$76 to USD$0.05

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The danger of using stock photos

The Sunday Times online has recently again made it’s Irish stories available after a break. They have an ongoing feature on the site at the moment called “Irish property price guide 2009”. Unfortunately they’ve done something that I noticed the Irish Examiner doing some time ago.

Check out the picture below. Notice anything?

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Why this country will continue to struggle for a while more

This article was in the Irish Independent last week. It details how a Dell employee who will soon lose his job is about to lose his wedding reception deposit paid to the Castletroy Park Hotel because they’re closing down. This article from last weeks Sunday Times has a similar story related to Kinnitty Castle – it details a warning from the National Consumer Agency that couples planning on getting married could risk losing their deposits if hotels close down before the reception is held.

In the same way as we’ve warned against gift vouchers, savings clubs, Christmas Clubs and lay aways, giving deposits to businesses can be a risky proposition these days. In all these situations, you’re giving a business you’re money without actually getting something in return – at least for a while anyway. And in each of these situations, as an unsecured creditor, you’re likely to be the last person to get your money back – if at all.

However, that’s not the reason for my post. This statement at the end of the article is:

I’m working in Dell and still have a wedding to pay for.

This is from the main character of the story who confirmed that he was due to lose his job next January. The average wedding in Ireland costs upwards on €40,000. And the maximum payout, I understand, from Dell will be 1 year of salary. Around the same amount maybe?

Why the hell would you go ahead with paying for a wedding when you’re unlikely to have a job? I realise it’s what many couples would like, but if you’re future is uncertain, and you’re living somewhere that’s taking a huge hit on job losses recently, maybe there should be some second thoughts about spending the money?

But that’s not been the Irish way for the past number of years. We don’t care where the money comes from (ours or the banks) as long as we can spend it on exactly what we want, whenever we want.

This statement shows that that attitude isn’t changing all that quickly despite everything that’s happening at the moment.

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Top Tips for Irish Consumers from Jan Battles

With thanks to, and courtesy of, Jan Battles who writes for The Sunday Times, here is the 17th and last in our series of Top Tips for Irish Consumers.

When I’m being thrifty and virtuous (which I admit is not always) these are some of the things I have found that help me save money.

  • I’ve installed Skype on my computer, which has got to be one of the best inventions ever.  The software allows users to make telephone calls over the internet for free to other users of the service (and for a fee to landlines and mobiles). My best friend moved to Australia a few years ago and now instead of buying phone cards or access codes off websites I can call her totally for free. Not only does it cost me nothing, and is really easy to use, but because I have a webcam on my laptop I can see her every time we speak, instead of just once a year at Christmas. You’d think there’d be a catch, but I’ve yet to find it.
  • When using my credit card abroad and given the option of paying in euros or the local currency I always select the local currency. It means I’m not getting the crappy exchange rate the hotel, restaurant or shop has set (which will include a nice cut for themselves) but rather the bank’s rate of the day.
  • I use Which? magazine and its website Which.co.uk to help choose what brands of electronics and appliances to buy. They do comprehensive tests of reliability and value for money. They’ve never led me astray.
  • Otherwise it’s just trial and error for us consumers. Consumer Choice, the magazine of the Consumers’ Association of Ireland, publishes similar reviews.
  • I buy as much stuff online as possible: I get Dermalogica skincare products, which are only available in certain beauty salons and spas, from Care4YourSkin.com, where they are much cheaper (and they arrive at your front door). I use Amazon.co.uk for books, CDs and DVDs; Pixmania.ie is good for electronics and I buy art prints from Allposters.com or Easyart.com who will deliver canvas or framed prints.
  • Earlier this year I had an extension put onto my house and got a new kitchen fitted. I brought my rough plans to one kitchen company and paid them around 150 euros to do up a full CAD drawing with computer images of what the kitchen would look like, then emailed it round six or seven different companies for quotes. The dearest was twice the price of the cheapest. Many companies around the country are willing to deliver and fit in Dublin and are usually much cheaper than ones based in the capital.
  • I use websites like Laterooms.com and Wotif.com to get discounted hotel rooms. I’m so disorganised it’s always last minute anyway when I’m booking a holiday that it works for me but if you like to have everything sorted months in advance it’s not ideal.
  • I stock up on painkillers like paracetamol and ibuprofen when I’m in the North or Britain. Boots and Tesco have several different lines of own-brand versions in the UK that they don’t have here that are much cheaper, and it’s the same active ingredient. You can get paracetamol for as little as 1p a tablet when the cheapest here is more than 8c each. You can also get some medicines that are prescription-only here over the counter there, which saves on the 40 or 50 quid it costs going to the doctor.
  • Unless I have a memory lapse, I always clear my credit card when the bill comes in. I tend to use it only to book tickets, reserve hotels and when buying valuable items so they are covered by the card insurance. I don’t use it as a loan facility as the interest rates are so high and I’m freaked out by big debt (my large mortgage is something I manage to block out of my head most of the time). I love denying the bank any interest payments so when I forget to pay on time it really bugs me.
  • When the lovely people at the insurance company send me my annual renewal and have bumped up my premium I always call them. The first year I phoned all the other providers to get quotes and told my insurer how much cheaper I could get it elsewhere. The second year I didn’t go to the bother and just said I could get it much cheaper elsewhere and they immediately dropped the price. It seems to me like they pick any number out of the air and are leaving the ball in the customer’s court as to whether they bother to quibble with them or not.
  • These are personal top tips, and are not necessarily endorsed by The Sunday Times.

The complete series listing of Top Tips for Irish Consumers is now available here.

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Think locally if you want to phone globally

The Sunday Times
Mark Paul, November 21, 2004

It pays to do some research when using your moblie phone abroad

THE love affair most Irish people have with their mobile phones can be put under severe stress when the object of affection is taken overseas.

Those who make or receive phone calls while abroad can find themselves stuck with a bill that is 10 to 20 times higher than normal on their return, according to the Consumers’ Association of Ireland. Even Dermott Jewell, the chief executive of the association, has been stung when travelling to Belgium. “You learn by your mistakes,” he said. “I won’t be caught out again.”

Since most people cannot bear the idea of casting aside their beloved phones even for a weekend, it is worth investigating ways to cut charges.

The price of roaming depends on whether you make or receive the call, what country you are in, what foreign network you are roaming on, what time of day it is and where the person is that you called. Add to that the different prices for prepaid and bill phones, and it’s easy to see why people can become confused.

Don’t think that text messages are necessarily the answer, either. One news journalist was presented with a bill for €350 recently that had been racked up in just three weeks of frugal calling but copious texting in the Middle East.

Those who are planning on spending a considerable period of time in a foreign country are better advised to purchase a local Sim card, according to Diarmuid MacShane, the editor of consumer website Valueireland.com. “You will not be charged for receiving calls while you’re abroad and will be able to make internal calls at the local rate,” he said.

Just make sure the network provider has not locked the handset and always inquire as to whether the new Sim will expire after a certain period.

Investing in cheap international calling cards can save you a lot of money when calling home, but the drawback is that you will not be contactable.

It is possible to divert all calls to voicemail before you leave but you need to factor in the cost of retrieving messages while abroad, which is usually charged at the normal roaming rate, and not the national rate.

Those taking shorter trips should contact their network operator to ask for a list of charges for networks in their destination before going abroad, according to ComReg, the communications regulator.

Most mobiles are set up to automatically select the strongest partner network signal when overseas — rather than the least expensive. Once customers are aware of which network it is cheapest to roam with, they can choose this network manually and periodically check to make sure it doesn’t revert to the stronger signal.

Vodafone has essentially carved the world into five different zones under the new Vodafone World plan, with one rate per zone for Vodafone networks, and another, much higher rate for other networks.

The problem is it doesn’t have networks in every country in that zone, leaving customers to pay a higher rate in many circumstances. In some Vodafone zones, it is more expensive to receive calls than to make them. In zone 4, for example, which encompasses Asia, Africa, the Middle East and Australasia, it is €1.99 per minute to receive a call, on any network. However, it is €1.69 per minute to phone Ireland on a Vodafone-owned network.

If you want to call a neighbouring country while in that zone it costs €2.99 per minute on a Vodafone network and €3.29 on one of its rivals. Sending text messages with Vodafone while abroad is 49c from anywhere in the world on a Vodafone-owned network and 59c on others. With prepaid mobiles, costs can be considerably higher and coverage is often restricted to the main destinations.

Daragh Kelly, a product manager with Vodafone Ireland, says that in the majority of cases, rates came down with the introduction of Vodafone World. He added: “Most of our customers are in Europe and rates there came down by 10%.”

O2 has introduced a flat rate, three-tiered system for the most popular European destinations. When roaming in these countries, customers pay 59c, 79c or 99c per minute, depending on whether it is an O2-owned network.

If a customer is travelling to a country outside of this area, prices rise again considerably. Paul Farrell, the head of marketing at O2 Ireland says that the firm hopes to have all “significant” world networks on the three-tiered flat rate scheme by next March.

O2 prepaid customers have a much clearer pricing structure: 99c per minute across the board and 39c for texts. The only problem is that Speakeasy roaming is restricted to a small selection of the major European countries.

With coverage in 98 countries and more than 180 partner networks, Meteor, the smallest of the three Irish service- providers, offers very competitive rates. Sending a text message while roaming with Meteor is 30c per message, from anywhere, to anywhere in the world.

This compares very favourably with O2 and Vodafone. To call Ireland from America is €1.29 with Meteor, compared with Vodafone and O2’s best price of €1.59.

Meteor says it is the cheapest network with which to roam, on average. “Our rivals are not passing on the benefits of their global presence to their customers. We are not a global company, but worldwide, we can compete,” it said. Within Europe, however, Meteor cannot top O2’s flat rates.

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Fine Gael’s valuable idea

The Sunday Times
Jill Kerby, January 11, 2004

Fine Gael doesn’t get much right these days but it has done the country a service with the launch of its consumer website, www.valueireland.com.

Having come to the site too late to benefit from Christmas shopping hints this year, I certainly intend to do my January sales hunting with print-outs of comments and the experiences of the hundreds of consumers who are now adding their rip-off and value stories on a daily basis.

A quick scan of the site last week showed that had I been a bit more purposeful in shopping online for the bulk of my CDs, DVDs, the DVD recorder, and Game Boy Advance purchases that were made at Christmas, I would have saved more than €110.

With a programme of home improvement projects on the cards for this year, I will be making a special trip to the DIY outlets in the north where lists of savings are posted.

It probably won’t last, but “thrift” seems to have replaced house prices as the most popular topic of the chattering classes these days. It has been a long time coming but the rot set in with the changeover to the euro and, two years into the single currency, we are all becoming a lot more aware of how expensive it is to live in this country.

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