The Cheque's in the Post...

Have you seen Sid...err..Pat?
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It's always exciting to see the postman (and yes, it usually is a man) coming up the path to put something in my letter box.

Well, when I say 'exciting', I may be exaggerating a little. As I have opted out of most advertising mail. apart from the odd handful of flyer rubbish that the Post Office insists I continue to receive, the postie tends to put through paper copies of bills and bank statements.

But he (or his colleagues) also bring packages of wonder from the Internet...

The only real letters I seem to receive tend to come from older relatives, plus the odd Christmas or Birthday card - but they are getting rarer. We've stopped sending Christmas cards overseas - an e-card is easier and cheaper - and our use of stamps for anything at all has declined dramatically.

But I was amazed recently to buy a second-hand stamp catalogue (Scott's Specialized Classic Worldwide 1840-1940, if you are interested) from the US for a mere couple of pounds from one internet site, postage included. It's a big book and normally sells for ten times the price. So, assuming the price was an error, I crossed my fingers and bought it with PayPal. A week or so later the postman delivered it to my door.

Now, how anyone is making money on that deal is unclear to me (apart from PayPal, that is) - but it is an amazing transaction chain. And the Post Office is part of it.

After dithering about buying into the soon-to-be-completed Royal Main share offer, I have finally jumped off the fence and put in my application (via my ISA provider). One reason was a fairly big chunk of cash sitting in there after a number of recent sales - and no good idea on what to spend it on. The second reason is the nice potential dividend being dangled in front of investors.

But the main reason is that I have been sucked into what can only be called a buying frenzy - and I'd hate to miss out on the fun. This deal is being promoted as being 'priced to sell' - and looks like being over-subscribed.

Of course, your average postie is pretty down-to-earth: he doesn't like change. And that's no surprise as it usually means more work for less money, even if they are being given a couple of thousand pounds worth of shares. Most of them will not know what to do with them and will sell straight away. And then go on strike.

But the times, they are a-changin' (as Bobby D said). Why has there been no national strike under the present government? It's the same reason why Milleband's promise to appropriate unused land and freeze energy prices did not really resonate - most people have grown up and now take a far more sceptical view of traditional socialist thinking.

The same may be true with the Royal Mail sale: once it's gone, it's gone. An extended strike would ultimately mainly hurt the workers (after all, there are a lot of young unemployed who are capable of putting the generally unskilled work involved), while a more dynamic private management provides much more scope for job advancement.

The bigger question is whether this is a long-term hold (can the new business remain competitive and profitable) or - more likely - whether to go for a quick, shameless, capitalistic, tax-free profit?


Update 10/1013 - Huge over-subscription. The word on the street is that 'large' retail bidders (like me) will get nothing! (That's it: no Xmas cards this year.)


I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.