RE: Said it before and i'll say it again...30 Mar 2021 16:32
In addition to my earlier 100,000 = £29,000 post, it's important to reiterate how big these numbers are. Even the gap between 29p and 35p is enormous. It's six grand. That's enough to pay your kid's university rent for a year or buy them a nearly new VW Polo.
We get desensitized to it because we're chucking big dream numbers around all day and some of us are sitting on silly gains - the sort of money we've probably never had before, or would have to work a lifetime to earn - but they are really, really massive amounts of money even with relatively low numbers of shares and small movements in share price.
Think about it like this: let's assume EUA is sold for *only* 50p/share. That 21p difference (from today) equates to £21,000 per 100,000 shares. Twenty-one grand: that's three or four nearly new VW Polos. Now, let's say, you've got 175,000 shares. That 21p equals £36,750, or nearly forty grand!
How long would it take you to earn £36,750? Let's say a reasonable salary of £40,000, or about £2,400 after tax and pension. It would take you 15 months to save, and that's assuming you lived in a park and starved to death at the same time. Assuming you could save 20% of your take-home pay, it would take you 76 months, or over SIX YEARS to save up.
But you now have the prospect of making that sort of money just by sitting on your hands for a few more weeks! Doing nothing but being patient and waiting. Easiest money ever.
But, as we all know, it's even better: now run the numbers with a £1.50 takeover price (which could be conservative after Friday) and, say, 250,000 shares. If you're earning £40K and saving 20% it would take you 781 months (!) to save that much money. Or, rather, you would die before you can do it. Yet people are sat here with the very real prospect of making that - and more - just weeks from now *by doing absolutely nothing*.
Now just imagine if it's even more than £1.50 or you have even more shares than 250,000, or you earn less than £40K. The ratios get even better. If you have less shares than this, it doesn't matter. In fact, the principle is arguably even more important: if you have 20,000 shares, the gap between 29p today and, say, £1.20 tomorrow is £18,200. If it's £1.76 it's £29,400: a house deposit for your kid! This is serious money. How much overtime would you need to do to earn an extra £29,400 in take home pay? I'll tell you: years and decades of extra soul-crushing work at night and weekends when you would rather be with your kids.
I realise the green coffins would call that ramping, but thankfully I can't hear them. The way I see it is this: we all spend far too much time cutting coupons out of magazines or arguing over a £2,000 payrise to make some extra dollar when the scale of money to be made at times like this dwarfs - by orders of magnitude - any other way of doing so. That's why I'll keep resisting the derampers while polishing the palladium cannon and staying firmly rooted onboard the galleon
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