We are concerned. There seems to have been a sudden outbreak of wishful thinking in the world of finance. Some would argue that rose-tinted risk assessment has been with us for some time – but this, we fear, is something else.
First, we received a cautionary release from Moneyspider.com: Look to reality, not the stars, for tracing down best investment profits, it read. With apologies to our US readers, it goes on:
Immensely popular in the States — where many financial fads originate — financial astrology, as the term suggests, uses planetary movements to predict the performance of currencies, stock markets, property prices and other financial asset classes. Websites — predominantly based in the US – are currently targeting potential UK investors with spam email inviting them to invest via this unconventional methodology.
We would suggest that those who take up the offers in these emails have far greater problems than losing a few quid on the stock market. Is it really necessary to warn the UK population not to follow the advice of what Moneyspider director, Bill Ross, calls, “a man in a pointy hat rambling on about when Mercury is rising in Gemini, or whatever”?
Yet in the UK Christeen Skinner uses the movement of the heavens to predict the market, by looking at the ‘birthdate’ of companies and drawing up an astrological chart. Her reputation though suffered a blow a few years ago when she was beaten by a four-year old in a week long stock-picking contest on the LSE.
The FT has also recently reported on Henry Weingarten, a US fund manager, who looks to the stars to determine investment for his Astrology Fund. According to the article:
Jupiter in a prominent position can mean upwards movements are more likely, whereas Saturn can mean the opposite. A strong Neptune can signal confusion in the markets.
But the backlash has begun. The WSJ reports this week on the case of Nylon Capital, a UK hedge fund backed by Barclays, which launched back in 2005 with $1.2bn to its name. Amid poor performance, claims have been lodged in the High Court alleging that business decisions taken by the fund’s top manager were influenced by an astrologist and a feng shui expert, leading to a breakdown in relationships between the partners. The story adds:
The fund acknowledges that a consultant in feng shui, a Chinese geomantic practice, was employed and says the top manager is acquainted with an astrologist but denies these connections affected the fund\’s performance.
Another question for the due diligence checklist: will you be investing my money according to a) the alignment of the planets b) the position of pot plants and/or mirrors in your office or c) the behaviour of crystals when held aloft over the markets pages of the FT?