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Holly's Blog: Shiny Monzo and why stocks are like boys

By Mike Narouei, Content Producer at Boring Money

7 Dec, 2018

A tale of two brands this week which I think illustrates our bonkers and psychologically flawed relationship with money and investing. Monzo raised £20 million from the public this week and AJ Bell Youinvest had its IPO.

Challenger bank Monzo raised £20 million on Thursday, mostly from Joe Public who invested an average of nearly £600 each. In 2 hours and 42 minutes.

And investment platform AJ Bell Youinvest had its Initial Public Offering today. (An IPO is just the process of a company moving from private ownership, to being publicly available for investment by any old Tom, Dick or Harriet on a Stock Exchange.)

Shiny Monzo

As a marketeer and lover of all things shiny, a small part of me loves crowdfunding. Own a slice of a brand you know. Bypass the ‘big boy’ institutions. Power to the People! Go sister!!! But as an investment specialist, I hate it and think that peer-to-peer and crowdfunding are fundamentally a bad idea for the vast majority of us.

Having cut my investment teeth in my 20s, starting off trading call warrants in an Aussie telco stock (what a wally) and progressing to buying tech stocks in the dotcom bubble (double wally), I have learnt the folly of ‘putting it all on black’. I very, very rarely buy individual stocks these days.

On Thursday, I read the Monzo Twitter feed slack-jawed. It was full of emoji-tastic, high-fiving giddy excitement about having a ‘hot coral’ card with the word Investor on it. First-timer magpie investors, many of whom seemed to be lured by the promise of badges and cards, were backing a company which lost £33 million last year, and is valued at 551 times its net operating income today. I enjoy Monzo. I like taking a fight to complacent incumbents. But I wouldn’t pick them as my investment tip for beginners.

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Quiet AJ Bell

On the other side of the self-promotion fence is investment platform AJ Bell. I know Andy Bell. He’s a smart straight-talking Mancunian, a little stage-shy, who manages to be cracking fun despite the social disadvantage of being an actuary... :) After 23 years of hard-work, his firm made its debut on the Stock Exchange this morning. Some of our readers will have accounts there – they’re a decently priced admin and trading service supporting ISAs, pensions, shares and funds.

The stock launched at £1.62 and is trading at £2.16 as I write. Funny how the company which has a proven business model and actually makes money, is not the trendy one hitting the airwaves and seeing the Twit-ter love.

Maybe stocks are like boys – the dweeby ones you never fancied at school turn out to be the cool ones in later life, and the sporty jocks turn out to be the disappointing plonkers!? Discuss.

IPO Insider

IPOs remain a slightly mysterious process, hidden away in City boardrooms. Yesterday I spoke to someone who has taken his company through an IPO, and survived to tell the tale. What was it like? Here were his 2 key learnings:

  1. Underpromise and overdeliver. A private CEO who promises 30% growth and creates 25% is a hero. In public markets, they're a villain.

  2. You can’t trust your broker. They are only really interested in your float happening (so they make their money) and they can’t keep anything secret (the city seems to all be about trading secrets as far as I can see). They get paid by you (the CEO), but they value the institutional buyers more than they value you, so they don’t work for you as much as for the institutional buyers.

I’m not sure if it’s comforting or plain depressing, that even the big guys feel they get shafted by the City? Whatever your level, it seems to be true that sunshine is always the best disinfectant.

Which leads me to my final request...

We are having another push to collect your reviews of your online investment providers. There’s £100 up for grabs – the winner of last month’s round was Chris from Kent – so please share your views ( to help us recognise the good and call out the bad.