London Briefing:  When small investors pile in, it must be time to sell.

That was the cynical reaction from many market professionals in London this week to news that private investors ploughed almost £1 billion into shares during August and September.

Full-time traders in the City of London do not always call the market right, far from it, but they may well have a point this time - aggressive buying in these volatile markets is a risky strategy for anyone, let alone small investors.

The buying over the past two months marked the first net increase in investment by private investors in a year, according to Capita Registrars' Private Investor Watch, which tracks trading activity of some 1.6 million private investors. The trend is in sharp contrast to the previous 10 months, when they are estimated to have sold off £7.4 billion of equities.

A break-down of the buying shows punters have been tempted back into the market by the steep falls in financial stocks, which have been the biggest victims of the global credit crunch.

In total, private investors are estimated to have poured more than £800 million into the financial sector over the past two months.

The amateur players may be proved right - and they certainly showed foresight in trimming their portfolios ahead of the summer shake-out.

But buying a share simply because it is cheaper now than it was a few months ago is not the safest of strategies, particularly in these troubled times.

Among professional City folk, the highly regarded banking team at Credit Suisse (CS) is certainly not convinced by the bargains on offer. In a stark note published on Monday, CS's Jonathan Pierce urged clients to avoid the sector, citing the uncertain outlook and potential impact of a housing crash and economic downturn on the sector.

The strong yields offered by the banks - always attractive to small investors - could also be under threat, as the increased cost of money, the prospect of greater scrutiny by regulators, and limited earnings growth will combine to curb significant dividend increases in the near term, he warned.

There are always bargains to be found in equities, whether in a bull or a bear market. The trick, as always, is to get the timing right - there's no point picking up cheap stock if it's going to be much, much cheaper in a few months.

Meanwhile, the market turmoil looks to have been good news for publishing group Pearson, owner of Penguin and publisher of the Financial Times.

Proving the old adage that bad news sells newspapers, sales at its FT Publishing division rose by 8 per cent over the first nine months of the year, with both the newspaper and its FT.com website gaining readership, no doubt boosted by those small investors plunging back into the market. Growth in advertising revenues accelerated from 7 per cent over the first half to 9 per cent for the nine-month period.

With all other parts of the Pearson empire, including its education arm, performing well, chief executive Dame Marjorie Scardino is predicting another record year for the group.

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Bryan Sanderson, the man with the toughest job in British banking, has come out of retirement to take control of the board at stricken bank Northern Rock, following the ousting of chairman Matt Ridley last week.

Ridley's abrupt but inevitable departure came just days after his public drubbing at the hands of MPs on the Treasury Select Committee. They accused him of "damaging the good name of British banking" and clinging on to his job in the face of the deepening crisis at the country's fifth-largest mortgage lender, resulting in the first run on a British bank in living memory.

The geneticist and former journalist, who took over as chairman from his father Viscount Ridley three years ago, leaves without any compensation for the loss of his £315,000 post, and the betting is that the rest of the Northern Rock board will not be far behind.

News of Sanderson's appointment was at the time generally well-received in the Square Mile, where the 67-year-old former head of Standard Chartered bank is known for his near-40-year career at oil giant BP and his chairmanship of the private healthcare group Bupa.

His appointment also played well in Newcastle-based Northern Rock's northeast England heartland - Sanderson was born in the area and has maintained his local credentials, including a lengthy stint on the board of Sunderland football club.

Eyebrows were raised, however, by those who recalled the reason given by Sanderson when he quit Standard Chartered last year.

He was leaving, he said, because the job was "taking more time and effort than I wish to give at this stage of my life".

Northern Rock and its 6,000 employees can only hope that the new boss's batteries have been fully recharged during his brief retirement.

Fiona Walsh writes for the Guardian newspaper in London