I had attended a talk organized by the Economics Society, here at the University of Warwick,recently. The speaker was the founder of an asset management firm ‘Hutchinson Lilley Investments Ltd’ London. This company just has 5 employees on its payrolls, including the speaker, and manages a portfolio of 700 million pounds. As an experienced individual, in private equities and wealth management Mr. Robert Hutchinson managing director, predicted the economic crisis much before his counterparts in other such boutiques.
Her Majesty the Queen of England, had visited the London School of Economics, recently to declare open a building which was funded by one of her endowments. She asked a senior professor, why couldn’t anybody predict such a severe downturn in advance? She received an unconvincing answer, that at every stage someone constantly relied on someone else. This resembles a fall of a pack of cards. This was then published in the daily telegraph, on reading this news, Mr.Robert, sent a letter to her Majesty explaining briefly but precisely, what he thought was the main cause for this depression. His opinions were based on the need for stable performance, low volatility and Humility of fund managers. He gave a promising picture for the UK down the lane, and signed his letter off as a humble servant of her Majesty!
Banks were safe places where people deposited gold, in those days and received a ‘bearer certificate’ without their name on it. A pound coin was actually made of silver and much bigger than what is currently in circulation now. That is why even today cash rich investors are investing a fortune in gold and silver. Inflation was one of the causes that even led to the collapse of the Roman empire, Mr.Robert believes, who has keen interest and deep knowledge about the history of financial systems.
When Governments promise citizens reforms and tax cuts, they have to borrow money or they inflate prices. Government policies pass through central banks and monetary funds to reach the economy. High taxation in countries like Britain, seem to follow a principle, where they plug the goose (people), till the point it starts to hiss.
"In prosperity our friends know us; in adversity we know our friends." This quotation by John Churton Collins, is very apt to every fund manager in today’s scenario, he says.
The insight given by the speaker about the concepts of hedge fund mechanisms and the recent Madoff Ponzi scandal, will be cited in the next article, as a continuation.
(Picture source: http://stillfinancial.com/uploads/Investments.jpg)
This is interesting, is the letter to the queen available on the internet?
ReplyDeleteA actually bought a copy of the letter he sent her when he cameover! and showed it to us, but it was a really brief letter,so he musnt have published it! he also bought one of the old silver bars used those days, a bit heavy actually.He remembered promptly to take them both back though!!!
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