8th May 2013
Financial journalist Tony Levene mulls the value and price of everything from Chelsea Flower Show tickets to gold funds.
Websites are advertising one day tickets for the forthcoming Chelsea Flower Show at £450 – or some eight times their face value. Besides the crowds of well-heeled folk, the displays of ride-on lawn mowers, and the flowers themselves, this year’s big attraction is a garden designed by Prince Harry.
Adding royalty to mega-ticket prices gives a media story and a half with a “worth every penny” slant on the expensive entry. But how real are those online ticket spiv prices? Has someone really multiplied their money seven or eight times over the past month or so?
The answer is no one can be sure, especially on the scant information provided. Ticket sites are the online equivalent of ticket touts and you would not trust a spiv outside a sports event to tell the truth. It’s their job to talk up prices because they have a supply to sell. If they can convince you the tickets are worth £450, then you might pay that. But if they were to say they were worth £350, then no one in their right mind will pay £450.
Their real worth is what a tout, or someone else, is prepared to pay for a ticket. And I doubt whether any reselling site would pay me anything approaching £450 if I had a one to spare.
Much the same goes for the world of investment. There might be a price but you need to know how real it is. How many people were buying gold when it peaked nearly 18 months ago? Not many in all likelihood because that was the top of the market. If there had been loads of purchasers, it might have gone over $2,000 or even $2,500 instead of falling around $400 an ounce.
There were “experts” who said the price would go up and up – and it’s not just gold where these folk forecast. But they mostly had an interest in the metal continuing to rise in the same way as ticket touts talk up ever higher prices. How many had a financial interest in gold falling?
Once you have a reason to predict a trend, it’s easy enough to find the words to give that move credence. You can come up with anything – China, the dollar, the euro, the bond markets or the habits of Thai monks – and make that work for your needs. Depending on what I need to show, I could make a positive gold story out of China, or a negative one.
There are no absolute values – only relative prices. And a price only exists if someone – preferably lots of someones – is prepared to pay that.