The relief of the four-day week came round again with the August bank holiday, and not a moment too soon. Blissfully, because of the good weather, I spent most of the weekend sitting in the garden and catching up with the reading I haven't had time to do lately.
Everything got consumed - newspapers, books, magazines, the lot. I can justify spending the whole day reading when I'm outdoors - once I'm inside, a whole heap of other things clamour for my attention and sitting curled up with a book makes me feel guilty after a while. But no guilt trips this weekend - well, I did feel marginally dodgy about the fact that the man spent Saturday cutting the grass and the hedge, but I can't touch the hedge without breaking out into an allergic rash . . . sometimes there are compensations in life.
Last weekend was one of the busiest for tour operators all around Europe which makes it all the more poignant that Paul Brett, the chief executive of Thomson Travel Group, has just resigned. You may recall that Thomson engaged in a war of words this year when Airtours made an £850 million bid for First Choice Holidays which would have dumped Thomson from the number one slot in the British holiday company league.
Thomson's response, as voiced by Mr Brett, was to moot the possibility of a price war. According to Mr Brett, Thomson had been market leader for 25 years and it was not about to be ousted without a fight. Unfortunately, those comments meant the same to Thomson shareholders as they did to me - number one at any cost was not acceptable. The share price plummeted and Mr Brett had to stick his finger in the dyke and say that he'd never sought a price war. Too late for the unhappy shareholders.
I can never understand how it is that chief executives of major companies manage to put their collective feet in it so often. You'd imagine that they'd all have learned after the Ratner's debacle. Anyway, Thomson has now announced that pre-tax profits fell in the first half of the year, partly due to the war in Kosovo and terrorist threats in Turkey which had put off holidaymakers. Oh, and Mr Brett is leaving the company. Leaving he may be, but he's getting a payoff of £400,000 (€507,895) which isn't bad for someone who managed to preside over a share-price decline of around 31 per cent in the past year. No news on how much Roger Burnell, the chief operating officer who is stepping into Brett's suddenly empty flipflops is being paid, but he's started off by doing a complete turnaround and predicting a lower capacity next year. He also said that profit concerns him more than volume. What a surprise.
In complete contrast to the relatively mature holiday industry where, indeed, profit should concern the participants rather than volume, the market was in a complete frenzy following the Freeserve flotation on July 26th. I've kept quiet about Freeserve since it was owned by Dixons, who remain on my shopping blacklist following the TV incident a couple of months ago. However, you can't ignore the fact that more than 100 million shares traded in a mere two hours when the company was launched on the stock exchange.
The shares were issued at 150 pence, opened at 217.50 pence and traded as high as 237.5 pence before settling back to around 205.5 pence.
Dixons only sold 20 per cent of Freeserve which has yet to make a profit. In fact, has yet to break even since the company is still operating at a loss - £1 million last year to be exact.
The question is, should the company actually be valued at around £2 billion? Who knows.
In my reading-fest over the weekend I saw Internet shares being likened to land speculation in the Wild West - and I have yet to see a better comparison. Still, lots of people made lots of money out of the Wild West.
I suppose making lots of money was exactly what Mark Barton thought he was going to do when he left his job at a chemical plant to become a day trader last year. Barton seems to have had a lot of problems before ever becoming a day trader, not least of which was being a suspect in the murder of his first wife. Who knows what he was thinking when he walked into the Two Securities Centre and began shooting, but his farewell note ended by saying that he wanted to live "long enough to kill as many of the people that greedily sought my destruction".
And there's the "greed" word. Day traders are motivated solely by profit. Many of them haven't a clue about the shares they're trading and care less. All they want and expect is for the price to go up so that they can sell whatever they bought at the opening bell. Some traders deal as many as 300 times a day - you can't really say it's easy money, 300 trades in a day would have you wired to the moon. I watched a TV programme about it a while ago and the lack of understanding of what they were doing was absolutely frightening. Afterwards, I wrote about day traders in this column, finding it hard to believe that they were such a huge component of trades going through the market. The last couple of weeks would certainly have worried a number of people whose bets have to have been placed in the assumption that the market will continue to go up. Day trading is, so far, a phenomenon of bull markets and I shudder to think what things would be like in a prolonged bear market.
Of course, nobody who has predicted a bear market has been right since October 1987 - we've had a couple of downward blips, some of which have been pretty terrifying, but so far that's just been the signal for more frenzied buying. I'm sure lots of people have and will continue to make very tidy sums trading every day. It's just that when someone loses, they lose big and the consequences can be devastating. Barton had, apparently, lost more than $150,000 (€140,278.69) in trading. People will say that he was a once-off and, let's face it, most people who lose money don't indulge in a shooting frenzy. These days, though, the papers are so full of the rich and famous that anyone who's living a fairly ordinary lifestyle is made to feel as though they've failed. When, in fact, living an ordinary life is a pretty good achievement in itself.
Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers
