Mistakes are often difficult to admit to, and I have found that many people with whom I have discussed mistakes feel that admitting them makes one seem weak in the eyes of others. But I have learned the most from those - be they colleagues, friends or strangers - who have spoken of their missteps and learned from them, then helped others by imparting the lessons they gathered from the bad decisions. This is my lesson to you.
In September of 1998 I had an extra US$8,000 (Dh29,388) that I wanted to put in the stock market. I was fully aware that a maxim of investing is that one should use one's head, not one's emotions, when making a decision about purchasing shares in a company. For instance, at the time I owned Walmart and General Electric, and I bought them because I knew the companies' markets and was convinced their services and products appealed to large and diverse demographics. People always need toothpaste and milk, and companies are always buying and replacing generators and turbines.
I wanted to invest in a "new" stock, an Enron or WorldCom, to get in on all the excitement being generated by Jack Grubman, the star analyst at Salomon Smith Barney, and other wise men.
WorldCom was a successful and rapidly growing telecommunications giant that was the toast of Wall Street. So I read all I could about the company, including countless analyst reports. It seems that it was a foolproof investment; indeed, the pension plans of New York and California had bought shares in the Mississipi-based company by the millions, and the two gentlemen who ran the funds for those states at the time were respected in the industry.
So, I was confident I was using my investor's head, having conducted all the due dilligence required of anyone buying shares in a fairly new company. And I had no concerns about putting the entire $8,000 in one stock, which at the time was valued around $50 a share, because my portfolio was fully diversified.
But there was one problem, and it was based in Cupertino, California, far away from my Manhattan home. You see, my heart was invested in in Apple. I am a fan of Steve Jobs and Apple, have been for a long time. My first computer was a Macintosh, and I loved it. Sure, I had recently been through a vexing experience with an Apple Performa desktop, but I reasoned that the defective model was designed after Mr Jobs was forced to leave the company he founded, and before he returned, in 1997. Besides, my new PowerBook was a beauty.
The stock was hovering around $9 a share, which I felt was undervalued. But it seemed I was the only person near Wall Street who thought that Apple was worth buying; in fact, many people were talking about the business going under. So, what to do? Go with my head, or listen to my heart?
In the end, I followed the leads of those men in Albany and Sacramento, and Mr Grubman downtown, and became the proud owner of WorldCom shares, to the tune of $8,000. And that was my mistake, because four years later, in the summer of 2002, the company filed for bankruptcy, leaving millions of investors with worthless shares.
If I had gone with my heart, and my confidence in the vision of Mr Jobs, my 888 shares would now be worth about $180,000.
As Warren Buffett advises, invest in companies whose products you understand and love. To that I am going to add the lesson I learned from my mistake: never separate your heart from your head, because they both are necessary to life, and when working together they can't be bettered.
James Brock is editor of Personal Finance
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
The specs: 2018 Nissan Altima
Price, base / as tested: Dh78,000 / Dh97,650
Engine: 2.5-litre in-line four-cylinder
Power: 182hp @ 6,000rpm
Torque: 244Nm @ 4,000rpm
Transmission: Continuously variable tranmission
Fuel consumption, combined: 7.6L / 100km
The%20specs
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How to help
Call the hotline on 0502955999 or send "thenational" to the following numbers:
2289 - Dh10
2252 - Dh50
6025 - Dh20
6027 - Dh100
6026 - Dh200
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Our House, Louise Candlish,
Simon & Schuster
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE squad
Ali Kashief, Salem Rashid, Khalifa Al Hammadi, Khalfan Mubarak, Ali Mabkhout, Omar Abdelrahman, Mohammed Al Attas (Al Jazira), Mohmmed Al Shamsi, Hamdan Al Kamali, Mohammad Barghash, Khalil Al Hammadi (Al Wahda), Khalid Eisa, Mohammed Shakir, Ahmed Barman, Bandar Al Ahbabi (Al Ain), Adel Al Hosani, Al Hassan Saleh, Majid Suroor (Sharjah), Waleed Abbas, Ismail Al Hammadi, Ahmed Khalil (Shabab Al Ahli Dubai) Habib Fardan, Tariq Ahmed, Mohammed Al Akbari (Al Nasr), Ali Saleh, Ali Salmeen (Al Wasl), Hassan Al Mahrami (Baniyas)
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
CHATGPT%20ENTERPRISE%20FEATURES
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UAE currency: the story behind the money in your pockets
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
