In a special series, leading City figures give us their recollections of the Black Monday, 30 years on from the great crash of 1987. For HgCapital founder Ian Armitage, it meant the loss of a job offer.
I was head of 3i, Ireland, but about to move to another firm, which withdrew the offer post-crash!
I was in Hong Kong on vacation on the day. I started by trying to get my hands on a copy of JK Galbraith’s ‘The Great Crash’, thinking about selling the few stocks I owned at any price and wondering what might happen to the new firm I thought that I was about to join.
The biggest impact was the aftermath - especially after the government policy response -lower taxes leading to inflation, entry into and then ejection from the Exchange Rate Mechanism.
High inflation and low confidence meant low entry prices and easy conditions to repay buy out debt. We did not need brains to beat the market.
There is nothing like working through a cycle to appreciate the wisdom of "sell early and buy when there is blood on the street”.