The Mystery of Finance


Having attended an Investment Event last night I started to wonder about how and why people invest.  I am currently reading Quicksilver by Neil Stevenson which is set in the 17th/18th century which is a period which marks the invention of finance, paper money, short selling and many other wonderful things.  Almost as soon as money was invented so was fraud, bubbles and bankruptcy.  At one point in Quicksilver everyone discovers that the Goldsmiths kind of early bankers have empty vaults and all their money has gone.

Surely we have learnt something from these kinds of shocks, well clearly not as the recent history of banking shows.  So thats great but what does it teach us about now.  Well it is clear that within 5 years there will be more online revenue in the games industry than through retail.  When you go for lunch everyone has an idea for an iPhone app (always a good sign of a boom) 10 years ago it was ideas for websites or was it tulip bulbs I forget.

We all like to follow the crowd and investors more than most, this is generally good if you can get in early enough but strangely investors are running scared of iPhone and haven’t even really noticed that download games change the rules.  There have been a couple of big investments I think Glu mobile got a fair amount of money but most UK investors have a strange disconnect they know iPhone is successful but don’t seem able to unpin the risks.

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