BIO: Bill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge.

STORY: Bill loves airships, and many of his investment mistakes involve airships.

LEARNING: Ignore the worst and the best estimates and focus on the middle consensus. In a difficult market, a bid is a bid, and you’ve got to sell fast.

 

“The market has one objective only; to inflict the maximum amount of pain on the maximum number of participants.”Bill Blain

 

Guest profile

Bill Blain is a well-known financier and commentator on financial markets, contributor, and editor of the Morning Porridge. His day job combines his role as Strategist for Shard Capital, the leading investment management firm, and heading the firm’s Alternatives Group – financing Private debt and equity deals and direct lending transactions. His clients include sovereign wealth funds, hedge funds, insurance and pension managers, credit funds, and family offices.

Worst investment ever

Bill absolutely loves airships, and many of his investment mistakes—unsurprisingly—involve airships. When Bill was relatively young, he discussed with his grandfather about going to Dundee. He told him about reading about it and his interest in airships. Bill’s grandfather encouraged him to invest in that airship. Billy took his grandfather’s advice and put his pocket money into the airship company. He lost all his money when the company folded a year later.

A few years later, as a young banker again, the airship industry came up, and Bill thought investing in it would work this time. So invested and lost a lot.

About 10 years ago, there was yet another airship. Bill tried to invest in it, but somebody else beat him to the race since it was a private equity deal. The guy who beat him in the bid lost all their money.

Over time, Bill has also made other poor investment decisions, like buying UK bank stocks just before Northern Rock went into meltdown. He also once did lots of serious analysis and market research and concluded that all the world’s growth would be in Southeast Asia. So he piled into Chinese stocks a couple of days before Ali Baba and Tencent were closed down.

Another big mistake Bill made was with Tesla. He learned about Tesla very early on and thought it was interesting. He even invested in it. But his confidence in the stock evaporated because he let it get personal.

Bill was distraught by the behavior of Elon Musk, particularly his attitude towards a British cave diver trying to rescue children stuck in a cave in Thailand. He felt the way Elon treated that diver, accusing him of being a pedophile, was unforgivable. So Bill decided to exit Tesla at that point. He decided for all the right moral reasons, and it cost him millions in the foregone upside that he would have made if he had held on to the stock.

Lessons learned

• Markets are not clever themselves. They’re not artificial intelligence. All they are is a voting machine.
• The market has one objective; to inflict the maximum amount of pain on the maximum number of participants.
• Things are never as bad as you fear but seldom as good as you hope.
• Ignore the worst and the best estimates and focus on the middle consensus.
• In a difficult market, a bid is a bid, and you got to sell fast.

Bill’s recommendations

According to Bill, a phone is the best resource for understanding what’s happening in markets and what you should do. Bill recommends calling people, speaking to them, and asking their opinions.

No.1 goal for the next 12 months

Bill’s number one goal for the next 12 months is to go skiing and spend much of the summer sailing his boat with his wife and puppy. And if his kids also come along, it will be even better.

Parting words

 

“Eat the beans, cool the pie, and eat that porridge.”Bill Blain

 

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