Case studies are the lifeblood of a wealth management firm, which is why we have decided to write one. This is the story of a client named Walnut, an elderly black cat of great calm, and the sardine that changed his life.
The beginning
Eleven years ago Walnut walked into our office with a single sardine. It was a modest sardine. It was in a tin, which he had pushed with his nose across three rooms. He wished to invest it. We asked him what he wanted from the investment. He said, ‘More sardine.’ We took that as a clear objective.
The strategy
We devised a plan with the following elements:
- Leave the sardine in the tin
- Do not open the tin
- Do not discuss the tin
- Review the tin every year, by looking at it
This strategy is known in the industry as Buy and Hold. In our case it was known as Sit and Stare. The results were identical.
The first five years
For five years the tin sat in the vault, which is a cupboard. Walnut visited once a year to confirm the tin was there. It was. In the sixth year, a second tin appeared next to it. Nobody had put it there. We have chosen to call this growth.
The next six years
Over the next six years Walnut’s holdings remained stable. The two tins sat quietly. There was some concern when the cupboard door was left open and the sardines were found to have been moved to the floor, but a careful review concluded that the tins had been rearranged by the draught, and by Penny.
The result
After eleven years Walnut owns two tins of sardines. This represents a gain of one hundred percent, a figure that we have not checked. He has expressed satisfaction. He has asked that the story be told with discretion. We have ignored him.
Lessons
- Patience is rewarded
- The cupboard is a safe place, mostly
- If a second tin appears, do not ask questions
- Sardines do not compound, but cats do
A reminder
This is a parody. Please do not take investment lessons from a cat. Walnut certainly would not, and he is the wisest cat in the building.
Leave a Reply