Today Gubay’s conduct would bring him a prison sentence. Back in the mid 1970s it brought just a mild reproach from a Department of Trade inspector who concluded that he had simply breached minor bits of company law. And there is every chance that, when Gubay decided to sell his Kwik Save shares secretly, he had gambled that, when the fuss had died down, he would face no sanctions.
Because that’s what Albert Gubay did – he gambled. His entrepreneurial career started when he secured a loan on his mother’s rings to buy a job lot of Blackpool rock that he reckoned he could sell from the back of a van. Later he gambled that no-frills retailing – selling groceries in chilly, damp warehouses, the goods stacked on concrete floors, their cardboard boxes functioning as the in-store display – could undercut the likes of Tesco.
When the gambles got really big he wagered that the passion for shopping among the nouveaux riches of Cheshire would justify the capital outlay on shopping centres. Finally he reckoned that fitness centres would be a great way to take money from affluent people who wanted the appearance of healthy living more than the reality.
True, there was more to it than that. You don’t get to be as rich as Albert Gubay without being as driven as the JCB earthmovers he liked to use when he took charge of his own building sites – he wasn’t labelled “Britain’s richest navvy” for nothing – or being as sharp as a scouser’s wit. Indeed, Rhyl-born Gubay was pretty good with the one liners himself. When a gaggle of City fund managers once toured Kwik Save’s operations, a pin-stripped slicker asked him in the neatest of clipped tones: “Mr Gubay, to what do you owe your firm’s success?” Gubay took his arm, pointed to the tower block of council flats opposite and said: “See that. You’ve got a lorra lorra people up there – and they’re all eating.”
But what was most remarkable about Albert Gubay was the biggest gamble he took. He was the man who in a real sense made a gamble with God. He was a living – and eventually dying – embodiment of Pascal’s Wager.
Pascal’s Wager is important for investors because it is all about probability theory – the formal use of maths to predict the outcome of events. It’s not too much of a stretch to say that without probability theory there would be no insurance industry, no sophisticated financial services and, therefore, no financial markets. In the 17th century the theory was formalised by two Frenchmen, Blaise Pascal and Pierre de Fermat. As well as being a mathematician, Pascal was a religious philosopher who devoted much thought to the nature of God. So it was appropriate that he should combine these two passions in what became known as Pascal’s Wager.
Like much of probability theory, the wager begins with two binomial propositions. The first – God exists; God does not exist. The second – you choose to believe in God; you choose not to believe in God. Given these propositions, Pascal argued that only a fool would choose not to believe in God. His logic was simple – believe in God and God exists, then paradise is yours; if God doesn’t exist, all you’ve sacrificed is a few earthly sins. Choose not to believe in God and God does not exist, then you can happily commit those few sins with no post-mortal comeback; but if God does exist, then eternal damnation is yours.
In a phrase – and with some understatement – there is more upside than downside in the proposition. What you give up to get the eternal reward is piffling compared with the ephemeral gains whose price is damnation.
Albert Gubay accepted the logic of Pascal’s Wager. He embraced it so strongly that he gave half of his immense fortune to the Roman Catholic church. As he once said: “I know there is a day of reckoning and I want to be prepared.” The Roman Catholic church was certainly impressed. It gave him a papal knighthood in 2011, making him a Knight Commander with the Star of the Sacred Equestrian Order of St Gregory the Great.
Whether God was so impressed is another matter. Because the trouble with Pascal’s Wager is that it is deeply flawed. It assumes that man knows the nature of God and that God will be a sucker for reward seekers. What works in probability theory may not work in death. Then again, anyone who uses the theory is life knows that, helpful though it is, it’s also flawed.
Whether Albert Gubay now knows he lost his bet, we cannot say. That said, we can be confident that, if he’s up there, he’s not discussing theory with Blaise Pascal. More likely he’s negotiating with St Peter to build a supermarket at Heaven’s Gate.
