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Finance Friday: Black Friday

Today is Black Friday and people are fighting to get goods in major supermarkets. It seems it’s been chaos in Asda and Tesco as people go after 40 inch televisions.

Are these the benefit claimants that the press keep talking about who stay at home all day drinking lager and watching Jeremy Kyle? Or have those aspiring Conservative supporters had the day off to go shopping? It can’t be the UKIP supporters, they would rather die than buy a German television!

Anyway, it seems greed is good; it’s what motivates people…

Desperate?

My local food bank left a trolley with a sign on it in a supermarket asking for food donations. Someone stole the contents. Were they being greedy or were they simply desperate?

Tesco Share price

Tesco’s share price is still falling this morning so the Black Friday sales aren’t doing them that much good. I still think the crash in their share price was an over-reaction by the market.  I’m still 5% up on those shares, but the decline is eating into my profit fast. The shares have been downgraded by the brokers, but Tesco has loyal customers and shareholders, so they are still a good investment. Many shares are overpriced because investors fled to what they saw as safe harbours. Those shares are overpriced and many riskier ones are under-priced.

Interest rates

With interest rates still at rock bottom, many investors are buying property on buy to let mortgages. Who can blame them? It’s easy money. They could yet be caught our though if they get too greedy, interest rates have to go back to normal at some time. The stock market will be affected by higher interest rates too. If they go up gradually, I don’t think it will be a big problem. The banks and insurance companies should benefit from higher rates.

Oil

The oil price keeps dropping lower. It was $72 yesterday and still no sign of OPEC cutting production. It seems that fracking in the US is bringing down prices. In Europe there is opposition to the method, but its starting to happen in Poland and so that could bring prices down further. We are already seeing petrol prices drop to below 1.20 a litre in the UK. If people aren’t spending so much on petrol, the money they save will be spent on something else. Maybe they will have a good Christmas with the money they save. Maybe, the falling oil price will bring the world out of this depression? We certainly can’t rely on the politicians to do the job or their masters, the bankers.

What do you think? Please share your thoughts in the comments box. You can also follow me on Twitter.

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  1. Pingback: The Review: Gareth Gates does Wednesbury | Mike10613's Blog

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