In a special new series, leading City figures give us their recollections of the Black Monday, 30 years on from the great crash of 1987. These are Hermes Investment Management CEO Saker Nusseibeh's memories of the day.
What job were you doing at the time of the 1987 crash?
In October 1987, I was (an old) graduate trainee at Mercury Asset Management (MAM). I had joined at the start of the year having realised that getting a job teaching medieval history at a university was nigh on impossible in those days due to cost cuts, and entered asset management with absolutely no knowledge whatsoever of finance or markets.
The MAM graduate training programme at the time was a clever way to provide MAM with cheap labour while offering graduates a kind of 19th century apprenticeship. The theory was that if one could stand the insults and the odd jobs (including fetching sandwiches and coffee and writing minutes in record time), one would imbibe the craft from one's seniors and those that survived the two year programme without resigning where the right people to progress and those who didn't weren't right anyway.
It seemed to work, in that MAM did produce many of the City's outstanding fund managers (current writer excluded), but such a system would not be allowed under working regulations today.
What do you remember from the day?
I was living in Oxford (where my wife was finishing her DPhil) and on Friday I left the house early having heard on the now infamous Michael Fish forecast on the BBC on the evening of the 15th.
It was still dark (5:30 am) and although I felt the winds rock the car, I paid little attention, got to Oxford train station and took the train to Paddington. At Paddington the line of people came all the way back from the tube station to the platform and the announcements were that a major storm had disrupted travel. I found a coin box and called my boss Richard Oldfield who told me not to bother coming in.
On Monday, I remember the sheer panic. But more importantly, I remember the reaction of my 'uncle' James D'Albiac (an uncle was a senior portfolio manager a graduate was apprenticed to, so to speak). James was possibly the finest portfolio manager of his generation and had made his money when everyone lost their nerve in the crash of '73 writing at the time "fund managers should remember share prices have the ability to go up as well as down".
James was remarkably calm, turned off the screen, saying it was irrelevant and told us to go back to work. His attitude proved to be absolutely right and was an example (although I did not know it at the time) of what we call today a long term outlook. I was really impressed.
What impact if any did the 1987 crash have on you and your career?
Very little at the time. I had no wealth invested and had little emotional attachment to the City, which was still a place of mystery to me and among our circle of academic friends at Oxford and in London, we didn't understand what the fuss was about.
Later, the experience helped shape my views on three important aspects. First, how completely self-contained the City was in its eco-bubble. Secondly, how detached the financial system had become from society in general. Finally, how rare it was to look at markets within a long term horizon and how easy it was to be beguiled by the excitement of the short term trading momentum.