You can't believe your eyes - apparently

by Steven Forbes

Steven Forbes says, "Research informs us that doing the opposite to the herd is the right thing to do and that currencies, commodities and shares move in cycles."


In my attempt to enter the 21st century, and being a tight Scotsman, I thought it would be a good idea to buy an Apple mini-iPod whilst on holiday in the States a couple of weeks ago. For those of you that aren't as hip as me, and that seems to include the vast majority of my colleagues, an iPod allows 100s of CDs worth of music to be stored in a contraption the size of a fag packet. The saving in buying one over there as opposed to the UK was about £50.

In my naivete I thought it would be as easy as walking into the store, handing over my 265 US Dollars and walking out with my shiny new gizmo. Imagine my surprise when firstly I could hardly find a car parking space at the shopping mall - on a Monday lunchtime - and when I did get to the shop to be told that today's shipment had already sold out and that I would be best to come back before 10am tomorrow as the daily delivery they receive tends to be sold by lunchtime.

As I left the shop and joined the teeming masses, I was struck by how everything seemed to be booming. The area I was staying in (which is not a particularly wealthy American town - the fact it is twinned with Dunfermline proves that) has seen a 30% rise in property prices in a year and the roads were far busier than previous visits I had made to the same area at a similar time of year. On the TV there were constant adverts suggesting that you buy your nearest and dearest a new BMW, Mercedes or Lexus for Christmas. One garage were even offering to deliver one in the middle of the night so that it would be in your driveway (with a big bow) when you woke up on Christmas morning. (Thankfully I was able to distract my partner every time these adverts came on!!)

But when I started reading the newspapers over there it appeared that I was wrong.

Far from doing well the economy was a mess. As proof, they stated that consumer spending the day after Thanksgiving was ONLY up 2.7% compared to last year. Back in the UK yesterday's Daily Mail had on the same page a headline slagging off the Bank of Scotland for being too profitable, i.e. successful, and an article saying that high street sales in Scotland had rocketed by 6.7% in November which was a bad thing as it could lead to a "financial crisis in the New Year" (This, from a paper that had previously predicted a disastrous Christmas for retailers). I don't know about you but I am GLAD those stories weren't about one of the UK's biggest employers making a loss and high street sales falling!

Now, there are always two ways to look at things but wouldn't it be nice if just for once we were presented with just the facts without unnecessary gloom attached to them. At ASAM we try to make up our own minds and note the views of leading experts who never seem to be quoted much by the doomsters. They inform us that doing the opposite to the herd is the right thing to do and that currencies, commodities and shares move in cycles. An example of this is Apple, the shares in whom fell by over 90% at the time of the dotcom bubble, but have since risen by over 1000% thanks to the success of the iPod. If anyone can find a newspaper suggesting this was likely to happen three years ago, I would like to see it.

Sure there are problems, there always are, but low interest rates and inflation do combine to give good stockmarket returns. The 1920s and 1950s are proof of that. So please keep the faith and have a great (and record spending) Christmas.

Now, does anyone know how to work an iPod………………

Steve Forbes

Steve Forbes
Managing Director
Alan Steel Asset Management Ltd is authorised and regulated by the Financial Conduct Authority

The Financial Conduct Authority does not regulate tax advice

This letter is the personal view of Steve Forbes. Please check the appropriateness to your individual position with your adviser before taking or refraining from any action.