After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
Another war started this week and I used to hate it at work when this would happen.
All that pain and suffering.
If religion is so good, then why are there so many wars and if fat free food works, why are there so many fatties around the place?
These are things that would be rolling around in my head and then some client would ring you first thing and say “Right then. How do I make some money out of this war thing?”
Normally it would be from someone who didn’t need any more money but just couldn’t help themselves.
“I don’t know. I really haven’t thought about it. Maybe buy some Smith and Wesson?” I would say and then hang up.
“War”, as my grandad would say “brings out the best and the worst in people”, but when it comes to broking, it only brings out the worst of people.
“Love” though – now that’s a different story.
In 1983, I used to sit opposite a beautiful man called Christopher (for the life of me I can’t remember his last name). He was kind and soft and about 70 years old.
He would always look very dapper in his three-piece pinstripe suit and when he went away to the Bahamas for his holidays, I was given the task of managing his clients for him.
They never gave me any trouble as they were always very polite and courteous. One sweet man even sent me a bottle of bubbly for helping him sort out a capital gains problem.
In those days, clients would receive a written review of their portfolio every six months plus another one just before the end of the tax year.
Writing a review for Christopher’s clients truly was an honour.
All of their portfolios would be beautifully balanced and I would nickname them ‘goldilock portfolios’ – they were all just right. Not too hot or too cold.
For younger clients, he would have them getting a bit of growth and a small amount of income and for the older ones he would have them mainly in income with less growth.
Word of the Lord
One morning, after going through all of my stuff, I went through all of his mail and there was a letter that looked like it had been typed out on a 1940s machine. It was very direct and to the point.
The headed letter was very direct in its instructions and was so unlike any of his other clients.
It was basically from a Catholic Bishop and the instructions were to close down all of their accounts and cease all dealings with them full stop.
As you can imagine, I was a bit taken aback and shocked by what on earth Christopher had done to deserve a request like this.
I went through the client’s file and I could see correspondence going back and forth between them, and it would appear that every time he would recommend a company for them to invest in, they would reject his suggestion.
It had been going on for a few years, where they had instructed him that they wanted growth stocks, as they didn’t need income. That’s what the collection plate’s role is.
At one point they actually said yes, go ahead – but they had taken about three months to reply and by the time they did, the stock was up 30% and was now a sell, as Christopher pointed out to them.
Finally I found some correspondence from them that showed poor Christopher had finally managed to nail down a deal, with attached contract note.
I almost fell off my chair – he had helped them invest into a rubber manufacturer, which, along with rubber gloves and boots, also made condoms!
BTR PLC was a large company that, at the time of recommendation, was going through a bit of reorganisation and their shares had been in the dog house for some time.
Christopher thought it an ideal stock for them as he could see the growth coming from them being turned around, with good management and a new and respected chairman overseeing it all.
They had accepted his recommendation, unaware that BTR actually stood for (and please be upstanding for this one) British Tyre and Rubber.
The letter instructing him to liquidate everything, return all monies and then close all related accounts, came about after one year of their investment.
Basically, the annual report had turned up on the Bishop’s desk and as he was flicking through it, he saw images of some very un-Catholic goings on.
There it was. A picture of a few old ladies rolling condoms onto metal prongs, before they were submerged into water, as that is how BTR tested them before sealing them and sending them out.
If electricity could go through one of them, then they had a hole in them and they were rejected. Simples.
Well, even though they were up over 30% on their investment, the mere fact that ‘he had suggested and they had invested’ was the guts of the outraged Bishop’s letter.
So that was that.
I followed their instructions, liquidated all their holdings and wrote a very grovelling letter with attaching cheque, which included their (in their eyes) ill-gotten gains.
Sects education
When Christopher appeared back from his holiday, all tanned and relaxed, I didn’t say anything to him until we had a debriefing lunch at Simpson’s in the Strand.
Just before we started to tuck in to our roast beef and yorkshire puddings, I informed him of the letter and all of the grovelling words I had to use.
He just fell about laughing and assured me that this is what he had wanted!
He ordered us another bottle of claret.
“You see old boy,”’ he said, “after they had rejected so many of my recommendations I’d finally had enough and gave them BTR. I thought that they would sack me.”
“When they said go ahead, I could hardly give their order to the floor, for giggling.”
And that was that. He had put me through the mental wringer, whilst sunning himself in the Bahamas and I had been losing sleep on how to write my grovelling reply.
All was good for me in the end though, as he plied me with some fine malts and cigars, plus he gave me a week to spend at his villa in the Bahamas.
Turns out that all’s fair in love and war.
Even when it comes to religion and shares.
The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected].
Feel free to contact him with your best stock tips and ideas.
