The FSA Spy market buzz – 08 March 2019

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Spy regales you with a tale about the land of the alpha fairy portfolio manager…and not much more.

The FSA Spy market buzz - 06 April 2018

This week, a departure from Spy’s usual overheard rumours and gossip mixed with boozy opinion. But don’t assume this report is drink-inspired! Spy has been entertaining the young children of a distant relative. Spy will not bore his regular readers with songs of praise of their charm, their intelligence and their obvious future destiny as geniuses (as described by their over-enthusiastic parents). Naturally, one is over-impressed by the precocity of youth, of the speed with which they pick up ideas and technology, but Spy is rather convinced his relatives are, in reality, no more special than the two kids who live down the hall and about as likely to change the world as a Labrador puppy. What did capture, Spy, however, was reading delightful children’s stories to the young scallywags that always begin, “Once up a time…” For if ever there was a collection of modern adult fairy tales, they are surely to be found in the fund prospectuses that regularly drop through Spy’s post box.

Therefore, pull up comfy chair while Spy dips into his newly printed tome, “The Story of the Alpha Fairy Portfolio Manager and Other Enchanted Tales.

“Once upon a time, there was a fairy portfolio manager and not just any fairy portfolio manager but an Alpha Fairy Portfolio Manager. She regularly invested in cheap stocks and sold those stocks when they became expensive and in so doing, made all of the investors of the enchanted forest plenty of gold. She was fêted throughout the land and trumpets blew as she passed while people often threw silver stars at her.

There was only one problem. Our Fairy Portfolio Manager had a dirty little secret: the companies she often invested in were not terribly good for the environment, in fact they often spilled their nasty, but useful, potions into the indigo river that gurgled through the enchanted forest making the trees become a bit sickly. Some of the companies she invested in paid fairy godmothers less than fairy godfathers. However, possibly worst of all, some of these companies, treated the elves who did the real hard work, appallingly. They made them work long hours in rather grotty conditions underground just because they were small and elvish. But, on the sunny side, they did make pots of gold.

One day, the King, who was a good and benevolent leader, decreed that from now on all fairy portfolio managers must care about the way companies behave and they should invest with far more care about the environment of the enchanted forest, the social welfare of the elves and those companies which have a good balance between fairy godmothers and fairy godfathers.

The companies who did not do these dastardly things, declared the King, should be marked with diamonds of good behaviour and the rest shunned. This royal decree left the Alpha Fairy Portfolio Manager in a bit of a bind. She could not, hand on wings, declare that any of the companies she liked to invest in ticked all those diamond boxes that the King loved.

What to do? Well, she was not an Alpha Fairy for nothing. Soon, she came up with a clever plan. She asked the nymphs who did all her analysis work to find an aspect of a company they did in a positive fashion. For example, if the company regularly put nasty potions in the forest river but in another activity gave yoga classes to the elves, rather magically, she discovered she could tick one of those diamond boxes that got the King so excited.

Soon, the Alpha Fairy found the tiniest aspects of a company that ticked one the King’s diamond boxes and so she turned these into the Golden Investing Rules. This made the Alpha Fairy Portfolio Manager smile and she put her myriad of Golden Investing Rules in a special scroll, which she hung on a tree in her glade so that all the elves would know that she was taking the King’s wishes seriously. The elves even cheered her when she did this, telling each other how clever and caring was the Alpha Fairy Portfolio Manager.

The Alpha Fairy Portfolio Manager went on investing just as before, buying whichever companies she really favoured, making lots of gold for the citizens of the enchanted forest, and everyone retired happily ever after.”

In the next chapter of fairy tales, you will read all about the “Fabulous Fund Selector who chose funds on its merits and not its brand name.”

Until next week…

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