My Biggest Mistake: Alastair Ross Goobey

Alastair Ross Goobey, 46, chief investment strategist at James Capel, is a former special adviser to the Chancellor of the Exchequer, Norman Lamont. He took a degree in economics at Trinity College, Cambridge, and his career has included periods as investment manager of the Courtaulds Group pension funds and as a director of Geoffrey Morley and Partners. He assumed his current post in 1987. His latest book, Bricks and Mortals, published by Century Business, is about the Eighties property boom. He is also a panelist on Radio 4's The Board Game.

MY BIGGEST mistake was made in the autumn of 1969, when I was working in the investment research department of Kleinwort Benson. One Friday afternoon, the man who sat opposite me asked if I had heard of a company called Poseidon. I confessed I had not.

A bit of research showed it was an Australian nickel company trading at about 20 shillings. It was marked in the Financial Times under rule 163E, which meant that although it didn't have an official quote in London, it could still be dealt with, because it was quoted on a foreign exchange.

By the following Monday the story of Poseidon had become front-page news. The company had made the richest-ever nickel discovery, and over the next couple of months, the share price rocketed to pounds 120.

The assembled research department at Kleinwort Benson started thinking about how it could play this nickel boom. We looked at a map of the mining concessions and found a company called New Metal, which had some adjacent land.

As speculation rose regarding these nickel discoveries, so did the price of New Metal. By Christmas Eve everybody was caught up in it, and I decided to buy some shares at 24 shillings and ninepence.

On that day, brokers who were lining up to deal with the jobbers shed tears of frustration as share prices rose while they waited.

It was all very exciting. I had bought shares before, but always in rather more secure companies. This was my first out and out speculation, and I hoped that New Metal was going to go the way of Poseidon. At the time I was a young and not very well-paid analyst. I invested about only pounds 200, but it was a lot to me in those days, as I only earned about pounds 1,300 a year.

I couldn't really afford to hold those shares, because it meant taking out an overdraft. And since I was newly married, I didn't dare tell my wife. By the New Year my enthusiasm had already waned. As someone pointed out, the market value put on New Metal and other nickel mining stocks was far above those of many substantial British industrial companies.

The two classic contradictory maxims in the stock market are 'never sell on a strike' and 'always sell on a strike'. The first relates to labour strikes, and the second to discoveries of oil or metal deposits, because there is always a long period of disappointment after the actual find has been made.

While the share prices drifted down, I kept hoping they would suddenly shoot up again, but by January I realised I had made a serious mistake. I had bought something I knew nothing about with money I couldn't afford. I felt sick.

In retrospect, I should have sold the day after Boxing Day. The shares were worthless, and I wound up selling them at a loss. Within two years the price of New Metal was down to one new penny.

The lesson to be learnt from all this is that you should always resist being caught up in speculative bubbles. And never invest more money than you can afford to lose.

Almost everybody in the department bought shares in one or more of the Australian nickel companies, and they all got their fingers burnt.

Fortunately it was a lesson I learnt early in my career, and I have never held as bad an investment since. I tend to be an early buyer and an early seller. And I do not slavishly follow trends.

(Photograph omitted)

Life and Style
Small winemakers say the restriction makes it hard to sell overseas
food + drink
Arts and Entertainment
A comedy show alumni who has gone on to be a big star, Jon Stewart
tvRival television sketch shows vie for influential alumni
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
News
Clare Balding
peopleClare Balding on how women's football is shaking up sport
PROMOTED VIDEO
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Sport
premier leagueMatch report: Arsenal 1 Man United 2
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
News
i100
Sport
Jonny May scores for England
rugby unionEngland 28 Samoa 9: Wing scores twice to help England record their first win in six
Life and Style
fashionThe Christmas jumper is in fashion, but should you wear your religion on your sleeve?
News
ebooksNow available in paperback
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
Sport
Tony Bellew (left) and Nathan Cleverly clash at the Echo Arena in Liverpool
boxingLate surge sees Liverpudlian move into world title contention
Voices
Neil Findlay
voicesThe vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Life and Style
food + drinkMeat-free recipes and food scandals help one growing sector
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin