In January, at the height of the investment boom, the Business Herald looked back at the 1987 stock market crash with an article headlined "Could it happen again?"
Two quotes stick out.
Bridgecorp boss Rod Petricevic - co-founder of 1980s crash victim Euro-National:
"We're older and wiser for the experience. And investors are
more savvy. We survived and in the process learned the hard lessons of the eighties and business is better for it."
And from property investor Olly Newland - whose listed investment company Landmark was also wiped out by the 1987 crash:
"Do you really think [regulation] makes a difference? I think human nature is constantly looking for a deal. I think the investing public is just as mad as ever. When you can borrow 100 per cent to buy a home, even 110 per cent. I think that is daft."
Without applying hindsight, Petricevic sounds sensible. Newland sounds cynical. But in the harsh light of 2009 the gulf between the reality of Newland's words and the fantasy of Petricevic's looks as wide as the holes in Bridgecorp's balance sheet.
We now have another crash to look back on. It has been a very different beast. This time thousands of local investors were locked in fixed-income investments when the downturn hit. It is these supposedly lower risk investments that have been hardest hit.
Most of the damage is now done and the slow, painful process of apportioning blame and responsibility - important as it is - is unlikely to yield much in the way of compensation. So the big question is can we learn? Can we produce a generation of investors who are too savvy to venture out of their depth in the investment market?
To do so we need to talk about risk. We need to teach the concept in schools and talk about it in the home. As Lehman Brothers has proved to the world you can have a wealth of technical knowledge but if you fail to assess risk it can sink you.
There will always be new investment trends and new products to dazzle and entice investors with high rates of return.
The investment industry needs to play its part. New Zealanders have a right to feel they can outsource the complexities of investing to trusted professionals. But no amount of regulation will rid the world of crooks and sharks.
At a fundamental level we must all take responsibility for understanding our own appetite for risk and matching that to the investments we choose.
