'You should have been here in '29'

TERENCE Ahern, London's oldest stockbroker, delivers his verdict slowly, with deliberation. 'I'm not saying the City is corrupt, but there is not the same degree of ethics any more,' he laments. 'Public respect for the City and managers of quoted companies has fallen,' he says. 'Too many company directors are more interested in their personal profits than those of their shareholders.'

Even at the age of 87, he should not be mistaken for a man who is out of touch. Is he thinking of anyone in particular? Ahern grins and his eyes twinkle. 'No names, no pack drill,' he says.

Sitting at his desk in the offices of broker Walker Crips Weddle Beck, where he has worked for 33 years, Ahern still keeps a close eye on the stock markets. He is contemplating retirement with reluctance as he is still fired by his interest in a market that, apart from wartime service in Burma, has been his trade for more than 70 years.

Ahern says: 'When the Footsie 100 went below 3,700 last week, that may have been the bottom.' But then comes the classic broker's caveat: 'I am not guaranteeing that and I am not saying that anyone should rush to buy. I wouldn't recommend anyone to buy any shares at the moment.'

Ahern joined the City in 1931 aged 18, working for Ullman & Co, a broker in Throgmorton Street in the shadow of the Bank of England.

At that time few people would have been eager to become a 'blue button', as stock market trainees were then known. The markets were still falling after the Great Crash of 1929 and industry around the world was in the grip of the Depression.

But Ahern was following in his father's footsteps. 'He was a Stock Exchange member and a partner at a stockbroking firm,' he says. 'He was an options trader and he taught me the business before he died very young two years later at the age of just 42.'

What was the young Ahern's first trade? 'A company called Swedish Match and Krugerrand Gold Debentures,' he recalls after only a moment's pause.

Ahern became a full member of the Stock Exchange in 1938 and remembers being well off. 'I was on 2 1/2% of profits and a salary of £5 a week. Bus drivers got about £2 a week,' he says.

Now Ahern keeps on working to keep his mind alert. 'I was in a position to retire 20 years ago but I wanted to stay active,' he says.

Age may have shrunk his stature and he moves with cautious precision, but he is lean and tanned. 'I am in very good health apart from my eyesight, which is going,' he says. 'The problem is called macular degeneration, which means it's just old age, really. But I was refereeing rugby matches until I was 73.'

Ahern expects his deteriorating sight to force him to retire in the next few months but he has no plans to rest. He says: 'I have a son in Australia and a sister in South Africa, and as long as my eyes are good enough I will live with each for a month every year.'

Unsurprisingly, Ahern has little time for the booze-swilling, strip club-visiting habits of the younger City generation. 'The behaviour of some people...' he tuts.

It is an old-fashioned view for which the party animals of the Square Mile today may have little time, but Ahern's lack of flashiness is refreshing.

During the Second World War he fought for four years with the famous Chindits behind Japanese lines in Burma. Then he went back to the City, trading on the Stock Exchange floor with a broking firm called Donnison & Co. He moved jobs a couple of times before settling at Walker Crips in 1969.

With Ahern's down-to-earth style, it is perhaps not surprising that his favourite industrialist and entrepreneur was Lord Weinstock, or plain Arnie as he was known to Ahern in the Sixties. That was when Weinstock carried out his ambitious takeovers of Amalgamated Engineering Industries and English Electric - the deals that set GEC on the path to industrial greatness. 'The establishment did not back Arnie when he bid for AEI and English Electric,' Ahern says. 'But I stood by him and talked to him about the deals, and he took over both. I am afraid that after that I lost touch with him.'

Ahern shakes his head when he considers the present wreckage of Weinstock's business empire. 'It is a great disappointment that a respected company such as GEC should end up as it has done in Marconi,' he says.

But it does not surprise him that the telecoms boom should have seduced so many investors, even the most senior professionals. He pushes his glasses up his nose and carefully lists some of his professional beliefs:

'If you are a fund manager you can get it wrong. But as long as every other fund manager gets it wrong at the same time you won't get into any trouble.

'Many fund managers are brought into the City straight from university with economics degrees but with no experience. This cannot be put into computers or textbook. They are just not as good if they don't start at the bottom and learn the business.'

Ahern, of course, has experienced more market ups and downs than any other broker still in business. 'All the big falls are similar - the market was just too high to begin with,' he says. 'Yields were low and price-earnings ratios were too high. That leaves no scope for a rise, but great scope for a fall should anything bad, like a scandal, happen to the economy.'

Ahern's is the simplest explanation - and the most accurate - for the latest crash. The market was simply overvalued. But he has chalked up some losses in his time. In 1973, he personally lost £20,000 - £150,000 by today's standards - in a sudden stock market slump.

Ahern held shares in a company called SW Berisford, which had been riding high in expectation of a takeover. But as the market slid the takeover evaporated and the shares fell quickly. 'The hard thing about the stock market is not making money - it's keeping it,' he says.

It is a lesson he has learned thoroughly. He was always sceptical about the dotcom bubble and managed to avoid serious losses. That in turn has stood him in good stead as he approaches retirement. 'I'm mostly in cash now,' he says. 'I am 87 and I have plenty for my retirement.'

How many clients of the City's young generation of pension fund managers can say the same?

By Simon Watkins