The Secret… Borker? When an upgrade becomes a downgrade
The Secret Broker
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After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
Well, the ASX made history this week.
Not by reaching an all-time high but by managing to implement the shortest ever trading day in its history.
On Monday, the ASX managed to open for exactly 24 minutes before its trading system came grinding to a halt and quotes in over 2,000 company shares were frozen in time.
Somewhere in HQ, Steve from IT was under a desk with a loose wire in his hand. It turns out that over the weekend, Steve and his team of techno-wiz-heads had upgraded the trading system via an act of ‘plug out, plug in’ whilst keeping your fingers crossed. In doing so, they also managed to create a major trading exchange fail.
It was only last month that the same ASX had implemented (after 13 years of planning and procrastination) a simple website weekend upgrade which also froze on a Monday morning.
Maybe, just maybe, someone should have thought, ‘Hang on a minute, if we can cock up a website upgrade, how will we go with a trading system upgrade?’
On a day when the market was looking like heading to a rosy +2.0%, everyone was left staring at frozen prices and not knowing what to do. ‘Will it come back on?’ and the classic ‘Have they tried turning it off and on?’ all came to mind, but after a couple of ‘Hold on, we think he’s found it, we’ll be back in 30 minutes’ announcements, at 2.30pm Steve and the ASX completely gave up.
All of this Monday morning action created a flashback for me, to a time when I was in London and trading was just starting to cross over from the floor to a computer screen…
The year was 1990 and the IRA had planted a bomb in the London Stock Exchanges (visitor gallery) toilets. They gave us all a 10 minute warning to get out, so we piled out into the street that ran between the exchange and the Bank of England.
Still in our lairy trading jackets, we simply carried on trading options at the end of the cordoned off street, as it was our way of giving a very British two-finger salute to the IRA.
And yes, the bomb very much went off:
The point is, even a bomb would not stop us then. Now, in these tech-dependent times, all it takes is for someone to trip over a bloody plug.
These two spectacular ASX own goals would be news to all those who are just now starting to discover the joys of stocks and shares for the first time in their lives.
The combination of COVID-safe home working and an interest rate so low that $100K on deposit will only cover off a ham sandwich for one week of the year has caused an explosion in the take up of online share trading, as people look for ways to increase the returns they get from their capital.
Gemma Dale is NAB’s ‘director of investor behavior’ for trading service nabtrade – and yes, that’s a real title. She reckons they’ve seen a doubling of trades on busy days. Over at CommSec, 400,000 new smartphone accounts have been opened this year.
Let’s hope none of them needed to sell on Monday.
Regardless, it is always good to see people take control of their finances and my advice to those newcomers would be to stick to simple rules, like researching in the real world. Do you use AfterPay/Zip, eat take away from Domino’s or bank at one of the Big Four and like what you see? That’s all you need to know.
And if you drive a Tesla, well, I can say no more!
Avoid courses that take your money and promise to teach you how to do it. I’ve seen people hand over $7000 to a course provider to whom I’d say, “If you’re good, you wouldn’t need to sell it”.
Honestly, you’re much better taking the $7000 and learning by yourself from your losses and gains. If you get a hot tip from a mate and no time to research, just put in 10% of your normal size. That way you have dipped your toes in and now have an interest in watching and later researching.
Avoid FX trading and CFDs if you can, as, just like betting companies, there is always only one winner and it ain’t you. I have had CFD accounts and been stopped out on false movements, had my login frozen and encountered a super slowed-down version when trying to take profits.
Most of all, remember that nothing has changed in the last 200 years. A good company, with good directors, a good profit margin and generating enough cash to pay a dividend is today called a Blue Chip. It was also called a Blue Chip 200 years ago.
And finally, as the saying goes: “Why rob a bank when you can own shares in it?”
Unless, of course, Steve has tripped over the plug again.
The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at email@example.com.
Feel free to contact him with your best stock tips and ideas.