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Invest like a legend: Stephen Jarislowsky

Chairman and CEO, Jarislowsky Fraser

FIRST INVESTMENT: It was in stocks, when I was in business school after the war. Reynolds Metals went up very sharply, and then for a long time did nothing. Abbott Laboratories went up year after year, and increased the dividend. United Airlines went up and down like a roller coaster, and I finally sold it when a merger was announced.

WORST INVESTMENT: Buying International Asbestos in 1953, which went broke after no one wanted asbestos any more. It was really a promotion on the Montreal Stock Exchange. It was as bad as anything.

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BIGGEST OPPORTUNITY NOW: I would buy something with a good yield, that raises the dividend every year, has excellent management and is a leader in a stable industry, which operates all over the world. A stock like a tobacco stock or a liquor stock or McDonald's or Procter & Gamble-something like that.

WHAT KEEPS ME AWAKE AT NIGHT: The fact that I'm getting older. I'm 85. Only about 7% or 8% of those in World War II are still alive. I'm one of the lucky ones.

ADVICE FOR INVESTORS: For old investors, don't take any risks. If they lose the money, they can never earn it again. I don't believe in taking undue risks. You can do that when you're young and have a long career of earning money ahead of you, but not once you get into your late 50s. And for young investors, don't buy commodity stocks. I think commodity stocks are in a bubble.

BIGGEST BUBBLE: Gold, obviously. I don't know if you can call gold a commodity, because it isn't. It's nothing. It doesn't have any particular application. And when I see that everybody is investing in gold through exchange-traded funds and derivatives and God knows what, it scares the hell out of me. It really is not a proxy for money. I dare anyone to go into a grocery store with an ounce of gold in his hot little fist.

HOW I WOULD INVEST A $100,000 WINDFALL: I would buy a nice piece of art. If you really know something about art, you make more money with it than with many other things. I would go for Canadian art, since I live in Canada. I would look for a young artist with a really great gift, and make sure I have a trained eye. When I was younger, in the 1950s and 1960s, I bought paintings for $300 which are probably worth $150,000 now. I still own them.

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