Private Investor: I'm throwing in my hand and getting out of online poker

The shares had already slid 15 per cent on their previous close, but I really didn't care. I had thought about selling earlier, the day before at 380p or so. Now it was 318p, take it or leave it. I took it. I was sure the shares would slump some more, but they bounced back, very slightly, on Wednesday. So I had the magnificent achievement of selling at the bottom.

Except that it wasn't the bottom. That was scraped a long time ago when Sportingbet struck 20p, in the autumn of 2003. I didn't sell them then, simply because it would hardly have been worth the bother for the amount that might have been raised; better to leave it as a long-shot punt.

I had bought some the previous year, out of curiosity, at 100p, so it was quite a drop, and I even toyed with the idea of buying some more, but the outlook then seemed bleak. The tranche of Sportingbet shares I bought in January came in at 205p. Thus, despite the depressed levels of last week, Sportingbet still left me with a healthy return.

Even so, I feel a little regretful. Maybe I shouldn't have panicked. Online betting shares are a volatile market, and to be in it requires strong nerves. And we all know the old formula that high risk equals (potentially) high returns.

What's more, and in stark contrast to the old dot.com firms, the poker companies make money, lots of it, and are growing incredibly fast. Only the slightest stumble from their customary astronomical growth rates can send the market into a tizz. Maybe the rest of us should be more level-headed. Maybe, and good luck to those of you who have a firmer resolve than I possess.

I just have this terrible suspicion that in a few years, months even, there will be lots of articles and not a few books written on the great stock-market poker boom and bust of 2005.

PartyGaming, Sportingbet, Empire and all the rest of them just have that suggestion of a classic bubble about them. The barriers to entry seem rather weak, and although there are all sorts of sophisticated version of it, the basic business model is now extremely well known. Yet, if the US ever liberalised its regulations and allowed its own big software players into the business, the value of our homegrown stocks would plummet, suspended only by hopes that they might be bought by one of the US concerns.

Some consolidation of the poker players seems to be coming and is the most likely outcome of the present turmoil, but it may not be enough to protect shareholder value. As far as Sportingbet and its peers are concerned, my gambling days are over.

It's just as well, then, that the overall market seems set to make more progress. For what it's worth, I guess that it's going to be big cap stocks that will be making more gains now, mirroring some of the ground made by the medium and small cap indices over the past couple of years.

Even without the fun and games in the online gambling market, there are plenty of reasons to be a little cautious about where to plonk one's money.

Last week, I mentioned a world-class US technology stock named Marvell, which is on my shopping list. Another, closer to home, is GSK, which ticks most of the boxes right now; large cap; relatively recession-proof and oil-price-proof; a good long-term story (the ageing population needs more drugs).

It, like the general market, has made decent progress so far this year, and should have further to go. Does it make tranquillisers?