THERE ARE OBVIOUSLY exceptions to the rule but in general it holds true. The last person you want to ask for investment advice is the first to offer it to you, namely your stockbroker.
This is not necessarily for the reason commonly advanced that the stock he advises you to buy is the stock he wants to sell. I am speaking of stockbrokers here, not investment banks.
The reason is simply that I have never known anyone get it as spectacularly wrong as a stockbroker routinely does and I do not know why.
They do it as a group as well as individuals and we have an instance of it on our hands again with our stock exchange's appointment of an investment bank (an exemplary case of the blind leading the lame) to find other stock exchanges in which our exchange can invest its reserves.
Now I may have this wrong here. Perhaps it is just once again an instance of the majestic self-esteem of civil servants who scorn the advice of all others in their all-knowingness. I would have thought, however, that exchange chief executive Kwong Ki-chi had been a little humbled recently by the penny-stock debacle and might have deigned to descend from his Olympian perch and ask a few other people before proceeding.
Let us assume he has. What makes it folly is that no one seems to have addressed the first question of any initiative: what is it we are trying to do here?
For the stock exchange there are three possible answers to this question. The first is to break out of its shell of being an exchange only for Hong Kong equities and give itself a wider international role. The second is to make itself a more efficient marketplace and the third - which should really be the first now that the exchange is a listed company - is to make money for its shareholders.