A fool and his money

Hobby horse

Bernard Hollowood

I am not the first individual to suppose that investment could be practised efficiently as a hobby, and to have been proved wrong.

The human mind can hold, I believe, a limited amount of information at any one time, and if a person is fully occupied with a job, the cricket scores or women, he cannot possibly remember all the material necessary for successful part-time investment.

I should manage things much better if companies and unit trusts resisted the temptation to change their names. At present I receive tiny dividends from two companies and three unit trusts that are completely unknown to me. I have never bought shares in Mextair or Transom P, though they send me their annual reports and have been known to offer me a "rights" issue M further shares. Obviously, I could find out how Mextair and Transom P. came into my life. It would be a relatively simple matter, if I had the time, to check up on my portfolio and discover which investments are no longer functioning: then I should know which items Mextair and Transom P have displaced. But, as I say, I am fully occupied with my job and the very thought of hunting through the mounds of paper in my investments file fills me with foreboding.

You will have guessed that I am part of the majority of shareholders (54 per cent) in British Leyland who did not accept the offer of 10p per share before a certain closing date, which escapes me. I bought BL for patriotic reasons about a dozen years ago and I paid through the nose when the company appealed for more funds and made a rights issue. But I am not stuck with my handful of BL shares for patriotic reasons: I am stuck with them because I forgot to cash them in.

Let me qualify that. I am not at all sure that I received proper notice of the offer from British Leyland. Mind you, I'm not blaming the company or corporation: it's just possible that the Post Office let me down. Certainly, I read about the 10p offer in the press and made a mental note to accept it, but you know how it is — there is a sudden rush of work and existing memoranda are forcibly ejected from the mind by new ones. Anyway, I forgot and I'm about £15 worse off than I should be.

From time to time I receive, out of the blue, documents stating that I am the possessor of 135 shares in (say) United Alphabet or PDQ (Holdings), and I worry unnecessarily about their origin. When did

I buy them? How much did they cost? Who tipped me off? Then I remember that there is such a thing as scrip and I put the certificate of ownership in a safe place until I can take it to the bank for safe keeping. And, naturally, I quite forget where I have parked the thing and eventually forget all about it with the result that my investment is worth only half or a quarter of its real value.

I may add that I have about 3,000 books in my study and that my usual practice is to slip an important letter or document between the pages of one of them as a convenient and safe hiding place. I may also add that the ordinary .man with a job has no time to hunt through 3,000 volumes for a document that has already slipped his memory.

A few years ago I found a note in an old diary to the effect that I had invested £100 in the Bonus Unit Trust. I looked the Trust up in the 'financial columns and couldn't find it anywhere. So I phoned the bank manager. ..

"I have reason to believe," I said, "that I have £100 invested in the Bonus Unit Trust. Could you tell me whether you have a record of it?"

"It won't take a moment," he said, "to find out. Will you hold on?"

Ten minutes later a junior clerk told me that the bank held no document relating to Bonus and was sorry.

"It's very mysterious," I said, "I can't find it in the list of unit trusts. D'you think it's gone broke or what?"

"I'll make inquiries, sir," she said, "and call you back."

An hour later I got the information I needed.

"Bonus was taken over by Coronet Allied in 1963 and Coronet Allied merged with Glowtrust Unit Trusts in 1971. You should be getting a dividend of sorts from Glowtrust."

"I don't think so," I said. "I seem to recall that it was an accumulating unit trust."

"But you'd still get a notice about your number of units."

"Really?" I said. "Wouldn't they send it to you?"

"No, you see," she said, "we have no record of your investment."

Naturally, I looked up Glowtrust. It wasn't listed. But the problem was solved, I think, when I received 43p, half-yearly dividend, from something called Cleo Unit Trust. So it wasn't an accumulator after all. I wrote off for a certificate replacement and they had the cheek to charge me 50p.

I don't want to give the impression that I'm proud of my inefficiency. On the contrary it worries me deeply. For one thing it means that I'm constantly making fresh wills, and my solicitor doesn't really approve of items such as: "To my _grandson, Thomas Nesbitt, I leave £50 invested in whatever was once the Absolom Unit Trust and was subsequently (probably) for a short time something like Coelacanth or Sealcon Unit Trust.

"To Mavis De Trench, my granddaughter, I leave 150 unquoted shares in British Leyland, trusting in Almighty God that the Government will see fit to recompense those patriots who invested in the company and forgot to cash in their shares at 10p each.

"To Honor, my sister, I leave the £80 originally invested in Melex International which is now merged with some company whose name I forget except that it rhymes, possibly, with Tonic."

If you have a full-time job, successful investment is only possible when you delegate everything to a professional. He'll lose money for you, but he'll at least know which companies have let you down.