If Snow White had taken a different route through the forest while on the run from her stepmother, she might have stumbled across a different cottage inhabited by different dwarves. Instead of dig-dig-digging the whole day through, this lot scour-scour-scour the stockmarket for metaphorical diamonds, all the while singing – naturally – ‘High low, high low, it’s off to trade we go’.
Distantly related to their better-known neighbours Happy and Grumpy, they number 12 in total – Optimistic, Excited, Thrilled, Euphoric, Anxious, Fearful, Desperate, Panicky, Despondent, Depressed, Hopeful and Relieved. Two others, Denial and Capitulation left home – partly because it was so crowded but mainly they felt left out due to their names not being adjectives.
Unlike the cottage in which Snow White found shelter – where Doc was clearly the boss and everyone picked on Dopey – this one is more egalitarian. On a strictly rotational basis, each dwarf spends time in the ascendancy and so that being the case – and my whimsical analogy fast running out of steam – who would you say was on top at present?
One hears a lot about equities being overvalued and certain indices have been hitting record highs more frequently than feels comfortable but can we really describe investors as euphoric, thrilled, excited or even optimistic? On the other hand, if we are not somewhere on the greedier part of investing’s emotional arc, why have I started finding fund managers’ arguments so plausible?
Yes, I know that is part of their job but, seeing as chairing events is part of mine, my newly-contracted susceptibility is a worrying and potentially expensive development. Deep down, I still know my very best investments were made when I was sick to my stomach – somewhere during the reigns of Despondent and Depressed – but it is growing tougher to resist the siren calls.
At one conference recently, I found myself making mental notes to investigate further after presentations on Europe, Japan, Asia Pacific, emerging markets and global property. And while it is still going to take the Jedi mind trick to persuade me to buy anything with a bond in it, I even heard enough from a US manager to persuade me to hold off taking some meagre profits there.
Clearly there is something in the air but, if so, where are all those tell-tale signs I am sure I remember from, say, 1999 and have in no way sketched in after the fact? Where are the eye-watering M&A deals based on little but ego and consultant invoices? Where are the friends and relatives who are buying in now but will still blame me for observations (not advice, note) I may have offered years back?
Most tellingly, where are the cab drivers offering me red-hot investment tips? Maybe I just do not get out as often as I once did or maybe they are pulling into a rank somewhere down the road and I can be hopeful for a while longer. Why is there is never a magic mirror around when you need one?
Julian Marr is editorial director of Adviser-Hub and co-author of ‘Investing in emerging markets – the BRIC economies and beyond’
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