The Bottom Line

Day Gecko Hanging Out
Renee Grayson licensed under CC BY 2.0 Creative Commons

Lockdown 2020 and every CEO seems to be sending me emails telling me how great their Company is and how they are helping me.
And almost every TV ad.

Which got me thinking about my own personal encounters with those lovely Saints.

During 1999-2000 the Stock Market was roaring.
The Tech boom was beginning and many companies were being brought to market.

I was the London representative of a small Hedge Fund based in France.

Along with investing in the usual top companies, the world and his wife wanted to invest in the new Klondike.

The Internet.
The new issues were called Initial Public Offerings.
IPO’s. American term.
This meant that the original founders and possibly some of their backers sold a portion of their shares.

Usually only a small fraction would be released at first, with more becoming available 6 months later.

Which is why the shares usually rose on the first day of trading.
Ie Supply and demand (someone explain this concept to our Politicians).

And having a ‘successful’ launch meant free publicity.

So how to get these hot new shares?
Well you had to be a client of the Securities house that arranged the IPO.

And here is where it gets amusing.

With most new issues the Company boss and Directors went on a “Roadshow’ to New York, London, Tokyo etc to talk about their company and answer questions from Fund Managers.
At the time the market was going crazy so I went to 2 or 3 of these events each week.
Usually a lunch followed by the Q&A.

Lots of them were held in the old Livery Halls in The City such as the Butchers Hall and the now infamous Fishmongers Hall.
At the time checking where the Narwhal tusks were mounted was not a necessity.

I had to sign a register on arrival and this got me my allotment of shares.
Just like being at School.
Of course there was a Calendar of new launches so I did the boring homework first and assessed each company before the Roadshow meet and after hearing the sales pitch decided whether the issue was going to be ‘hot’.

If the issue price was $10 and the predicted opening price was $30 then that was a nice little earner.
Even on a 1000 shares.
$20,000 for eating a nice 3 course meal wasn’t bad!
(Of course it wasn’t all my money, sadly).

At the same time some established companies wanted to raise further money ……..
often by selling some shares at a discount to the current market price.

Which leads me on to my punchline.

I was invited to go along to a lunch being held at The Savoy by a German Stockbroking Co to listen to a presentation by a Dutch-American Medical Company.
Only about 12 people in the room so pretty quiet as the Boss talked about his wonderful product.
He was about 35 and spoke almost fluent English and had been to Harvard.

I listened.
The product is a little hard to describe but it was an insulated small box with which to keep samples of blood and tissue protected from damage for about 5-6 hours so that the contents could arrive at a Hospital or lab without degradation.

A few questions were asked…..nobody wanted to rock the Boat.
They just wanted to get the discount and make some cash.

These items were being sold in 1st world countries.
Well even in Stalag UK I doubt anybody is 5 hours away from a Hospital – unless you are on the top of Ben Nevis?

It was now time for my question.
‘Surely your products are needed in 3rd world countries where a patient could be many miles away from a Hospital’?
The Altruistic Dutchman:
‘Well yes,you are correct, but there’s no money in it

‘We do however make charitable donations’.

The meeting ended in silence.
I didn’t invest.

What a wanker.
Which is one of the reasons why I question every Govt, Business, Doctor, Professor, etc that all want to ‘help’ us.

© Deathoftheuk 2020

The Goodnight Vienna Audio file