Recall the days of the great boom in technology shares in the late 1990's. When companies like Yahoo and Amazon and eBay and a thousand other internet start-ups were soaring in value. In England companies like Freeserve and Easynet and FriendsReunited were setting the pace.
I was very much part of the early internet wave, my work was new media marketing, and I can honestly say that I predicted the prevalence of peer-to-peer sales models and web 2.0 long before the world caught up. But, on investment, I thought I'd play safe. Not so safe as to stay out of the sector entirely, but I could see a basic truth that still holds true; out of every ten start-ups only one or two will prosper, and that is as true in the brave new internet world as in the old material world. But it was not obvious who would be the next big thing, it never is. Even though I could predict the overall rise of social media, I could not predict the rise of particular social media companies.
So I recalled an anecdote - at the time of the California gold rush, a few miners struck lucky, most did not - but the ones who really made money were the guys who sold the spades.
And I recognised the need for a high capacity infrastructure for all this new communication. If I'd still been in America then I might have invested in Cisco Systems, but being in England, I invested in Telewest. In my mind it was easy to replicate websites, but it was hard to replicate thousands of miles of cable already embedded in people's streets. So I bought lots of shares. My life savings. My pension. I thought it was playing safe, buying spades not mines.
Within a few years, shares that had been bought above 250 pence were basically worthless. Like my pension fund. The company was taken over by NTL and then by Virgin Media. My stock was bought out for peanuts. Now, cable is doing well. Then, I was wiped out.
Which brings us to the present difficulties in the global financial system. Even shortly before the share price crashed, the directors and chief executives of Telewest were pulling out huge salaries and bonuses. One day perhaps we will find out the true extent of their complicity. One day perhaps my portfolio will recover.
Moral of the story: Research properly, never base your entire financial strategy on an anecdote.