The Worst Contract Ever Signed

Generali

A company which is now part of Aviva allowed some of their clients to trade on historical prices, that is to let them buy an asset that is worth a quid today for yesterday's price of 95p! Once a week, policy holders get to choose which asset they are going to buy into at yesterday's price, locking in a profit:

http://ftalphaville.ft.com/2015/02/27/2120422/meet-the-man-who-could-own-aviva-france/

He's making almost 70% pa in returns:eek:.

stator

He thinks he's making 70% returns. AVIVA aren't executing his deals so he'll have to sue them for what he thinks he's owed.

Generali

stator wrote: »

He thinks he's making 70% returns. AVIVA aren't executing his deals so he'll have to sue them for what he thinks he's owed.

Such as it is when people disagree, it's why we have a civil legal system.

PasturesNew

I didn't understand it really. So he buys at the last price, but I didn't understand how that could add up to significantly more than somebody who did buy yesterday.

And if I'd bought yesterday it doesn't mean it'll be more tomorrow and the next day.

HAMISH_MCTAVISH

PasturesNew wrote: »

I didn't understand it really. So he buys at the last price, but I didn't understand how that could add up to significantly more than somebody who did buy yesterday.

And if I'd bought yesterday it doesn't mean it'll be more tomorrow and the next day.

It allows for perfect investing with the benefit of hindsight, which will of course markedly outperforms the market as an average.

Lets say there are 1000 investment choices today, most will only move a tiny bit by this time next week, some will be up, some down, but one or two of that thousand will move a lot thanks to some development somewhere in the world that you have no idea is about to happen.

So next week you can cherry pick the one or two best performers and buy them at todays price.

Instant, guaranteed, profit every time.

stator

PasturesNew wrote: »

I didn't understand it really. So he buys at the last price, but I didn't understand how that could add up to significantly more than somebody who did buy yesterday.

He won't make more money than someone who did buy yesterday, but if for example I had bought 100 shares in British Gas and by Monday they are worth 10% more, I'm unlikely to be able to repeat that trick. Whereas he only bought the shares because he knew they were worth 10% more to him, so he can repeat it over and over again, whereas I am left sticking my finger in the air looking for other shares to buy and more than likely half my shares will go down too.