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How I Got Rich
Well, not really rich. But I earned 40% in a day 
, and here is how.
The government was privatising the national telecom, and the offer was for citizens to buy up to 38.000,00 HRK (~$7.000,00) of shares at a discount (discount to be announced after payment). Now, since the shares weren't publicly traded before this, it was an IPO. Since nobody knew the real value of the stock, nor the size of the discount, it was a gamble.
On the other hand, there are elections in two months.
Hundreds of thousands of people who have no idea what stock market is gambled that the government wouldn't be so crazy as to screw the potential voters two months before elections. The gamble payed off, the closing price on the first trading day is $72 at LSE, which is 40% above the price at which the citizens bought.
I was one of them
Usually I'm a careful buyer of everything, stocks included, but this time I went with the general opinion that "the government isn't suicidal".
Now this craze (and no other word fits: over 350 000 people bought the shares in a country of 4,5 million, it's as if 20 million Americans bought the same share at once) has turned light optimism into a mass fever.
The Croatian stock market index grew 60% in 2006 and seems poised to repeat it this year.
Obviously, this bubble has to burst at one point. I'm not a very naive guy, but I feel the general optimism is taking over me too. I already have some stocks, combined with this latest purchase it means all my savings are in stocks.
I want you to help me! I need some perspective from outside.
When is the right time to pull out? The prevailing feeling here is that the sky is the limit, people are taking out mortgages, going into debt and putting their entile wages and pensions into stocks.
The economy is growing at a respectable rate of 6,8% this year, and general indicators seem solid. However, I'm not sure that that is enough to justify this certainty that the stocks won't fall.
As I write, more IPOs have been anounced, and the thought that an IPO is "certain profit" seems to have entered the public subconsciousness.
When the bubble bursts, I don't want to be a part of it. Any suggestions?
, and here is how.The government was privatising the national telecom, and the offer was for citizens to buy up to 38.000,00 HRK (~$7.000,00) of shares at a discount (discount to be announced after payment). Now, since the shares weren't publicly traded before this, it was an IPO. Since nobody knew the real value of the stock, nor the size of the discount, it was a gamble.
On the other hand, there are elections in two months.
Hundreds of thousands of people who have no idea what stock market is gambled that the government wouldn't be so crazy as to screw the potential voters two months before elections. The gamble payed off, the closing price on the first trading day is $72 at LSE, which is 40% above the price at which the citizens bought.
I was one of them
Usually I'm a careful buyer of everything, stocks included, but this time I went with the general opinion that "the government isn't suicidal".
Now this craze (and no other word fits: over 350 000 people bought the shares in a country of 4,5 million, it's as if 20 million Americans bought the same share at once) has turned light optimism into a mass fever.
The Croatian stock market index grew 60% in 2006 and seems poised to repeat it this year.
Obviously, this bubble has to burst at one point. I'm not a very naive guy, but I feel the general optimism is taking over me too. I already have some stocks, combined with this latest purchase it means all my savings are in stocks.
I want you to help me! I need some perspective from outside.
When is the right time to pull out? The prevailing feeling here is that the sky is the limit, people are taking out mortgages, going into debt and putting their entile wages and pensions into stocks.
The economy is growing at a respectable rate of 6,8% this year, and general indicators seem solid. However, I'm not sure that that is enough to justify this certainty that the stocks won't fall.
As I write, more IPOs have been anounced, and the thought that an IPO is "certain profit" seems to have entered the public subconsciousness.
When the bubble bursts, I don't want to be a part of it. Any suggestions?
, I bought it by stretching my means to the limit.
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