Modern day investment management resembles, sadly, another old profession – and I’m not thinking of the oldest one, although there may be parallels there as well. Rather, I’m thinking of ancient alchemy with its near constant promises to turn lead into gold,1 just as investment managers repeatedly offer to transform low returns into high returns. This raises the question as to why investors/people keep falling for the stories offered up by investment managers/alchemists.
The sorry tale of Sir Roger
I think one can gain some insight into the reason people constantly fall for such stories by examining the sorry tale of Sir Roger Tichborne. Like many a well-heeled young Victorian Englishman, Sir Roger went gallivanting around South America. Eventually he boarded the Bella in Brazil. Four days later, wreckage of the Bella was recovered, and all souls were declared lost. Lady Tichborne (Sir Roger’s mother) refused to believe that he had perished. Encouraged in her beliefs by a medium who kept telling her that she couldn’t find Sir Roger in the afterlife, Lady Tichborne posted regular advertisements in newspapers around the world offering a reward for information about her lost son.
Some 10 years after Sir Roger’s disappearance, Lady Tichborne received word from an Australian solicitor claiming that her son was alive and well and living in Wagga Wagga, working as a butcher. Lady Tichborne was ecstatic, and sent funds to cover her “son’s” repatriation to the U.K. Upon his arrival, Lady Tichborne declared the man to be her son and instigated a £1000 stipend.
Top value fund managers are ready for the small cap bear market to be done
During the bull market, small caps haven't been performing well, but some believe that could be about to change. Breach Inlet Founder and Portfolio Manager Chris Colvin and Gradient Investments President Michael Binger both expect small caps to take off. Q1 2020 hedge fund letters, conferences and more However, not everyone is convinced. BTIG strategist Read More
Not everyone was quite so convinced that the new arrival was in fact Sir Roger (see Exhibit 1). Now it is perfectly possible for a man’s weight to change over the years (trust me, I know).However, Sir Roger spoke both Greek and Latin, the claimant spoke neither.
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