THINKING BUSINESS
a blog by Chris Barrow

The Shoe Shine Man

The late, Sir James Goldsmith (one of my personal heroes – read his biography) told a famous story.

After his successful takeover of Exxon Oil he became one of the richest men of his time in the world and moved much of his wealth into the stock market.

During a business trip to New york in the late summer of 1987, he arrived early for a meeting and sat down to have his shoes shined.

The shoe shine man recognised him and, after confirming that he was, indeed, polishing for the great Sir James, he started to tell him about his equity portfolio.

The shine shine man explained that all of his spare income went into “the market” and that he was having a great year.

Parting with a hand-shake a large tip, our Knight of the Realm took the elevator to his destination office and asked to use the phone.

He called his p.a. in London with an instruction to his stockbroker to quietly “go cash” and ask no questions.

By October he was in cash (in billions) and later that month we all saw “Black Monday” as over 40% was wiped off stock market values after the Great Storm in South East England.

Goldsmith was asked how he had miraculously escaped the crash.

His reply:

“When the shoe-shine man is in equities – its time to get out.”

So which areas of your market are currently populated by people who shouldn’t be there?

Dentists selling facial aesthetics?

Tax-planners selling avoidance schemes?

Accountants recommending incorporation?

Coaches selling miracle cures?

It can be a good general policy to head in the opposite direction to a crowd.

0 views0 comments