Is this the top version #389 featuring Nuns
Amid a global search for yield in a sea of negative interest rates in Europe sits a solitary convent in Germany. The nuns who occupy the facility live a Spartan life, selling milk and candles and at one point collecting interest off a nearly $2.1 million investment portfolio. With rates turning negative and economics being turned upside down in the Eurozone, the nuns pray and actively manage their money. Their strategy is working. With a hope and a prayer, the sister’s sacred portfolio delivered a 2.6% return on investment, significantly higher than the 0.3% return on German government debt but also well below the 9.6% the German DAX stock market index delivered.
Interest income no longer pays to fix the roof at Nunnery
The problem for the nuns living in the Mariendonk Nunneary in rural Germany is limited investment options.
“Twenty years ago we could get enough money from interest to renovate our whole building,” Sister Christiana Reemts was quoted as saying in The Wall Street Journal. “Now the interest rate can bring tears to one’s eyes.”
Faced with limited options, Sister Lioba Zahn, the Nunneary “cellerarin,” similar to a chief financial officer, determined that if they didn’t find appropriate investments they couldn’t sustain their religious order. The group receives no help from the Catholic Church. “You don’t need to have studied mathematics to see that we were going down,” straight down the negative interest rate rabbit hole.
Sister Lioba recognized something needed to be done. So the 54-year-old prayed for inspiration and then called a meeting of nuns. Outlining a plan to enter the market like a hedge fund manager, she walked out with a new mission in life.
Nuns – After learning about SWAPs, Sister Lioba sells Deutsche Bank
With a Bible on one side and bank research reports on the other, Sister Lioba was determined to save their way of life. She started to learn what a SWAP was. This education was later followed by her selling shares of Deutsche Bank just before the stock started its historic downfall, her best trade. There was not definitive connection between her SWAPs education and selling Deutsche Bank, although her timing was reasonably perfect. She also sold shares of Volkswagen AG in the fall of 2015 prior to accusations the company cheated emissions tests.
Did she have divine inspiration or just the ability to spot a massive con?
“Once those were stocks that you could take with you to bed,” she said, pointing to changing morals inside the companies. “Good that we got out in time.”