I remember going into his office and him saying to me “Dan, I’ve just generated £30,000 and have paid for my wedding”.
When I said to him that that was 'pretty cool but he might want to bank that', because it didn’t feel particularly sustainable, he agreed and said “Yes, but I’ve just got to pay for the honeymoon first".
That was pretty much at the peak of the market and needless to say, he didn’t get out in time.
But the episode made me realise that this was genuinely interesting to me.
Thankfully, while I dabbled, I didn’t have enough money to get painfully burned at the time but it made me wonder how someone so intelligent in one dimension could get so wrapped up in this fervour.
'It was total carnage in the industry'
Coming into 2001 I knew that my training requirements were close to completion so I started looking around for the next step, but it was total carnage in the industry.
The bubble had well and truly burst and markets were just grinding lower relentlessly month after month, and there weren’t many opportunities.
I discovered Orbis through an advert placed by a recruitment consultant and it really was like the cheesy 'lightbulb moment' for me.
The explanation of their investment philosophy was the first time anyone had really articulated that successful investing is really about operating at the intersection of micro-economics and psychology.
Even better than that, here was a firm of ‘value’-orientated investors that had not only managed to side-step getting sucked into the whole dotcom boom, but one which had survived as a business through that.
Don’t forget that many investors with great track records in the late 1990s either capitulated during the mania, or were forced to shut up shop in the run-up to the peak of that bubble.
So it really was rare to find a firm at that time with both clarity of investment approach and proven long-term success.
FTA: What has changed over the time for the better - and for the worse?
The collapse in the equity culture in the UK has clearly been the most worrying development that I’ve witnessed play out. The move by corporate pension schemes to Liability Driven Investing, driven by accounting regulations, was really the biggest blow.
The UK market feels moribund now; UK companies are trying to find ways to list in the US rather than here in the UK. This is a terrible shame.
I don’t think it’s a UK specific thing (other European capitals have the same problem), more of a testament to the ‘pull’ that the incredibly high valuations in the US have created.
