Don't ever think you're clever, ever. Ever.

I don’t think I have self-esteem problems (but nor am I, I hope, conceited) but one ‘moral’ lesson I have tried to teach my children is that ‘there’s always someone cleverer than you. Always’. Others are that ‘there’s no such thing as a free lunch’ i.e. you get nowt for nowt, ‘if it sounds too good to be true, you can bet your bottom dollar it is’ and ‘try to keep an open mind’. I know full well that it’s futile and that, like me, they will learn their lessons the hard way, but every parent likes to protect his ‘young ones’ as long as possible, not realising that they are a lot older in many ways than we think.

The lessons above I told them when they really were still young: I always prefaced it by saying that they might not yet know what the bloody hell I was talking about but to remember it anyway. Perhaps it is only me who seems to bump into people who are by far cleverer than me, but these days I try to anticipate and mitigate any disadvantage by trying never to underestimate anyone.

For example, years ago I lived in Milan for five months and one day, while leaving the (I think Loretto) underground station - the system only had two lines in 1973, now it has four - I spotted a small crowd near an exit. I went to see what was going on and found it was the old three-card trick, sometimes the three thimble trick. In this case the chap doing it had three small pieces of wood, one with a stamp on the underside and each had a rubber band around it. I watched for a while.

At one point one guy shouted ‘stop’ (in Italian, of course) and then took my hand and planted it firmly on the piece of wood he reckoned had the stamp on it so that it could not be changed. Then he went through his pockets and bet something like 20,000 lire (which was around £20 I think.) And - of course - he won. And - of course, as I was supposed to by being psychologically involved in it all by having my hand clamped down on the ‘winning’ piece of wood, I thought I could win, too.

I had noticed that the the rubber band around the piece of wood with the stamp on its underside was crooked, whereas the rubber bands on the other two pieces of wood were straight. ‘Easy,’ I thought in the way complete fools think, ‘I’ve sussed it. I don’t have to even try to follow the chap as he shuffles the pieces of wood around to keep an eye on the one with the stamp. All I have to do,’ I thought in that way complete fools think, ‘is look shout stop and then look for the piece of wood on which the rubber band is crooked. And that will be the one.’ Immensely pleased with my cleverness I let the chap shuffle the pieces of wood around, paying no attention at all to which might be the one with the stamp. Then I shouted ‘stop’. And then he said ‘OK, give us your money’.

By the way he said it, the contempt in his voice that another sucker had been hooked, told me that I was just another sucker who thought he was cleverer. Rrealising this, I didn’t wager nearly as much as I planned to wager. I just pulled out 5,000 lire, handed it over, pointed to the piece of wood on which the rubber band was crooked, but I already knew it wasn’t the one. And of course it wasn’t.

The guy didn’t even look at me. I felt about six inches tall. Why did I even bother handing over money? Well, all I can say is that it didn’t occur to me not to, and that I thought I had slightly saved the day by handing over far less than I was going to. But I now realise that had I not, I would probably have been taken to one side, given a good kicking and then had everything of value on me stolen. That’s when I first decided not to underestimate anyone, but of course it takes years to learn such a lesson completely. And I’m not even too sure I have even learnt it yet.

 . . .

This is all a long-winded way of getting round to my SIPP (self-invested pension plan) and the shares I chose for it. Or rather one share.

Until about 2006 my private pension - my pitifully small private pension - was with a completely useless company called Abbey Life. I had taken out the pension with one company, but as is the way of these things, they are sold on, then sold on again, and then again until total no-hopers like Abbey Life are in charge of the money which is supposed to keep the wolf from the door when you are in your dotage. (And, by the way, Mr Ward, I can’t afford to buy and sell gold. Admitting you had ‘sold all your gold’ as you did a week or two ago was a novel way of shooting yourself in the foot, but you carried it off no bother.) I heard about SIPPs and decided I couldn’t do worse than bloody Abbey Life. So I withdrew all the money I had with them I was able to withdraw and opened a SIPP.

That’s when I did a little thinking. This was towards the end of the boom years (a boom wholly based on people borrowing money to spend on the back of ‘ever-rising house prices’ and a feeling of affluence created by China selling a great many goods at ridiculously low prices in order to get a toe-hold in the market), and I felt in my bones that the good times were going to come to an end. They always do (and incidentally, before someone writes me off as a dour pain-in-the arse pessimist the same is true of bad times: they always eventually come to an end). So I asked myself: if times are hard, many business quoted on the stock exchange will do badly and their share price won’t grow. But what kind of business actually does better than it usually does in a downturn. And then it hit me: pawnbrokers do.

I did a little ‘research’ (a hi’falutin word which can mean anything from tracking down the Higgs Bosun to looking up a bus timetable) and found that a pawnbrokers called Albermarle &; Bond were quote on the stock exchange. So I bought in, at about 157p a share. And boy was that good - for which read lucky - timing. Over the next few years they doubled in price and were at over 300p just a few months ago. And all the analysts, or most of them, at least, said ‘strong buy’. Boy did I feel smug. There’s was me a rather clever stock picker. But not quite clever enough. Had I really been clever, I would have sold at 3oop. But I didn’t. They would carry on climbing, I thought.

They didn’t. They started coming down again, inexorably. I kept an eye on the price and kept telling myself that wise investors - yes, I even thought of myself as ‘an investor’ which strictly speaking I was but... Wise investors are in it for the long haul. That’s true enough but no one actually ever know how long a long haul should be. So I held off selling as the prices kept falling, from 250p to 220p and then to 211p.

That’s when I cracked. I was still ahead, so why not. I sold the lot. I then googled news reports on Albermarle &; Bond to find out just why their price had fallen again so much. And the answer was simple. In 2006, when I discovered them and bought shares in the company, there were only three largish pawnbrokers, so they all had a healthy slice of the business. After 2009, when the bad times started, others realised there was good money to be made from the misery of others and pawnbroking outlets sprung up everywhere. So there was less business to go round and Ablermarle & Bond’s profits suffered. Simple, really.

And the price of ABM’s shares at close of business today, April 26, 2013? Fucking 230p. Oh, well, c’est la vie (he said through very gritted teeth).