A business-savvy friend at the CBC admitted to me this week that he still has shares in Nortel.

He bought them long after their steepest slide, betting that, with clever new management there was a good chance the company could turn around. Even as the share bumps along near zero, my friend is holding on to them, calling it an investment lesson to himself.

Just about any Canadian who has ever bought shares has a Nortel story. And only a few of them are good.

A relative of mine had a good one, with a twist. She sold her shares right at the top and took her extended family on a holiday. But she gave one young family member actual shares. Wanting him to learn about investing, she told him to hold on to the stock. Some lesson.

A lot of us are learning lessons these days.

The latest figures on Canadian mutual funds out this week show ordinary folks are getting out of the easiest way to have a stake in stock. In December, Canadians cashed in $800 million dollars in mutual funds. Compare that to a year ago, in December 2007, when Canadians bought $3 billion in mutual funds.

Not buying isn't the lesson

As we pointed out on CBC News: Business on Friday, a lot of ordinary people invest at the wrong time for the wrong reasons. On CBC Radio's The Current, we heard about the couple who took out a loan to buy Nortel stock just when it was at the top. The same thing with energy shares just last year.

The couple on The Current said the lesson they learned was to never buy shares again. But that's the wrong lesson.

I remember my own early lesson in investing in the 1980s. As a forestry student at Lakehead University, I invested my tuition in oil shares, Norcen I think, until the university sent me dunning notices, and then I sold at a profit to pay up. We were in the middle of the biggest oil boom anyone had seen and energy shares just kept going up. I felt pretty smart.

When the oil boom started to die, one of the greatest Canadian oil companies ever, Jack Gallagher's Dome Petroleum, fell to $1 a share. On the grounds that shares in a once-successful giant like Dome couldn't possibly go any lower, I bought a few hundred. Shortly afterwards, Dome disappeared from the stock market altogether.

When stocks are rising everyone looks smart.

When stocks are high, the urge to get a piece of the action is hard to resist.

And when stocks are falling, they can fall farther and stay low for longer than you ever thought possible.

Nothing lasts forever

On Friday on CBC News: Business, Dave Simms reported on a Calgary investment club that was shutting down after 40 years. It wasn't just the state of the market they said, but they had been through bear markets before, and trading just wasn't as much fun when markets were flat or falling. When the club started out, markets were flat for 13 years, and they don't want to do that again.

We saw a similar collapse of investment clubs after the tech bust that first knocked Nortel off its perch.

For a while, everyone waited for the boom to reignite. But as the months and years stretched on more and more amateur investors lost interest.

I've heard that one of the biggest mistakes people make when imagining the future is the conviction that the next period of time will be very like the most recent period.

When stocks and euphoria were high, those Nortel investors on The Current, and many others, thought that high stocks and euphoria would go on forever. It didn't happen.

That is the lesson.

Everyone is gloomy now and predicting more gloom ahead. And if the current gloom continues, people will start to think it will last forever. But you and I will know, it won't.