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Black Monday Memories: David Jacob on 'near-death' market experiences

Black Monday Memories: David Jacob on 'near-death' market experiences

In a special series, leading City figures give us their recollections of the Black Monday, 30 years on from the great stock market crash of 1987. Here ex-Rogge Global Partners CEO David Jacob explains how the events of the day made him a more cautious investor.

What job were you doing at the time of the 1987 crash?

I was a quantitative research analyst at JP Morgan Investment Management, just one year into my first job.

What do you remember from the day?

I recall the Friday morning after the storm. It was like a wasteland in central London and nothing was working. I walked to work that day and it was an eerie atmosphere. Few people made it in at all.    

I was too green at the time to understand what this would mean for market liquidity. That became all too obvious on the Monday. While I was not managing money at the time, I remember the panic that was on everyone’s faces and the overall sense of drama and ‘history-in-the-making’ that permeated the office that day.  

I remember the face of the head of equity as we went down in the lift together. He was stunned. He understood not just what it meant for clients, but also what it meant for the health of our firm at the time.  

Today, I think the most ironic thing is that it was much more dramatic on the day than it looks like when you look at historic returns. Also, relative to the financial crisis in 2008, it pales in importance and long term impact on markets.

What impact, if any, did the 1987 crash have on you and your career?

It really made me appreciate how quickly markets can turn. It also helped me understand the financial dependency of an asset manager on the health of markets.  

Success can turn to near-death experiences very rapidly in markets. It has probably resulted in making me a more cautious investor and businessman. It was also some (but by no means enough) preparation for the financial crisis.

 

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