FOUR years ago I did something really rather rash.
I became aware of a phrase – the moment of maximum pessimism – and, I decided to try and prove it true...
Perhaps you remember back then?
It was 2008 and the whole world was going for a financial burton.
Headlines screamed daily about global economic melt down. Sort of like now but without the added misery of the pasty tax.
An economic Pearl Harbour, one analyst said – although, given Dubya had his finger on the button at the time, bandying about such war rhetoric probably wasn’t wise.
In any case things were bad – all job cuts, bank prop-ups and plummeting bucks.
Stocks and shares were in the kind of free fall one has come to associate with Tom Daley. That is to say, they were nose-diving and there wasn’t much chance of gold at the end.
Sell, sell, sell, traders were screaming in the city.
And, so it was, some thought – long hidden in the collateral damage of my memory – raised its snout...
Now, what I know about economics is just enough to know I know nothing at all. It’s one of those subjects – like astrophysics or why people watch EastEnders – which is beyond my comprehension. My head won’t bend round it. I’m just about intelligent enough to know how unintelligent I am.
But this thought – creeping in from school days studying the Great American Depression – wouldn’t leave me: “When the headlines say sell, it’s time to buy.”
And so... I bought bought bought.
I judged the moment of maximum pessimism – that is, the point when things look so desperate you have to be utterly insane or utterly astute to invest – and I decided to dive on in.
When capitalism is awash with fear, I boldly told my old man over the pink pages of the FT, then a novice has nothing to be afraid of.
He regarded me for a few bemused moments.
“Are you sure you know what you’re doing?” he asked eventually. For sure, I said, and then I asked him to explain what FTSE stood for.
But there it was.
What did I care for the credit crunch anyway? My entire adulthood has been one long credit crunch.
But the meagre – and I mean meagre – sums I’d saved from cutting down on non-essentials (heating, furniture, that sort of nonsense) I plunged into the stock market.
I invested. Became a shareholder. A Master of the Universe, you might say. Although if we’re talking The Bonfire Of The Vanities, the Tom Wolfe novel where that phrase comes from, I’m probably less bond trader Sherman McCoy, more Peter Fallow, the journalist with the comb-over.
I found some shares that had dropped from 327p at the start of the year to 162.5p. And, with fingers crossed that the company could survive the worst of the downturn and bounce back stronger, I invested.
Then I sat back and waited for my dollars to double.
Reader, four years on, I’m still waiting. Because, reader, four years on, those shares have only ever continued to fall. Slower perhaps but steadily nonetheless.
What a load of bulls and bears.