How would you like to be a guy who put a good chunk of money down to own a piece of The Royal Bank of Scotland (who completed a $24 billion capital raise through a rights offering two days ago) and then hear this from the Chairman Fred Goodwin;
"There is clearly more bad news than good news, it is almost exclusively bad news. The risk environment is changing and there is going to be a correction."
Wow! I wonder if owning one of these big banks gives you some great perks like if you owned a piece of a major professional sports team? I certainly hope so because owning one of these banks is about as big a money losing proposition as owning the Pittsburgh Pirates! At least with owning a ball club you get to meet all the great players, past and present. You get great seats both home and away, and generally are treated like a civic leader. That has traditionally been what you get when you buy one of these teams. You generally are not in it to make money. You just want to have some fun and be in the limelite.
What do you get for your $50 million investment in say, RBS or Lehman or any of these guys? You probably don't get to meet famous people (maybe some B-List celebs) , maybe you get some good seats at the opera and the local museums, but that's about it. Seems like all you really get is a good laughing at from your friends and a whole lot of heartburn listening management lie to your face as they drop another few billion. So my advice is, next time you are looking to throw your money away, at least buy a racehorse or something. You'll have a much better time and who knows, maybe the horse will win every now and then!
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