alan jones

@bigyahu

My tech stock vs Melbourne Cup plan is working, kinda

Two years ago I decided to turn left when the rest of Australia turns right, and buy some shares in a listed tech company instead of place a bet on the Melbourne Cup every year.

If you’re not from Australia and haven’t heard of the Melbourne Cup, it’s like this: for an entire work day, most Australians do no work at all, and instead dress up, over-eat, drink too much, and place an average of AUD8.50 per punter on a bunch of poor horses being flogged around a race course for the entertainment of the masses. More than a hundred million dollars gets spent in a nation of roughly 23 million people, and (no prizes for guessing) most of that money goes towards already wealthy people and companies which own the infrastructure and the horses, not the once-a-year gamblers.

About the only industry which doesn’t stop on Melbourne Cup day is the share market so I decided to put my own punts on listed shares instead of race horses. I don’t know very much about most industrial sectors, but if tech companies were racehorses, I’d be a seasoned trainer with an inside tip or two. Australia’s ASX doesn’t have many interesting tech companies, so I place my bets on tech companies listed on the US NASDAQ exchange (which you can do via an online brokerage such as CommSec.

Buying and selling stocks is nothing like betting on race horses, but no animals are harmed in the creation of most tech startups, fewer people waste money on stupid outfits they wear just the one time, fewer people drink themselves senseless, and by the time a tech startup is listed on a major exchange, it’s often less risky than at the point I usually invest in tech startups (at the seed or angel investment stage).

So far, so good!

As you can see, in November 2015 I purchased some Tesla Motors stock, which has been as high as USD269.34 but today is trading at USD202.49. Because it was such an expensive stock I could only buy five shares but on the other hand, that has minimised my loss on the current price. Unlike the Melbourne Cup, your returns in the stock market depend upon when you sell, not just when you buy, so I need to hang on to that until next Melbourne Cup.

In November 2016 I bought some NVIDIA (makers of the high-performance GPU chips powering much of tomorrow’s AI and autonomous tech). NVIDIA’s gone pretty well and that (plus the favourable movement in the USD/AUD exchange rate) is covering my losses on Tesla Motors for now.

You don’t need to join me in betting on tech startups instead of race horses, in fact, I would rather you didn’t. I don’t need the competition ;-)

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