Several decades ago, during the USSR regime, a communist governor is visiting one of the small towns in his district.
The mayor of the town is excited to show the governor how dedicated his people are to the Communist Party, so as they are walking through the town bazaar, he pulls one of the farmers aside to ask him a couple of ques-tions.
He asks: “Comrade, if you had two apartments, wouldn’t you be happy to donate one to the Communist Par-ty?” The farmer replies, “Of course, Comrade Mayor, I would be happy to contribute to the Motherland.” The mayor continues: “And if you had two automobiles, wouldn’t you be happy to donate one of them to the Com-munist Party?” Again, the farmer responds: “Of course, it would be an honour.”
The governor is very impressed, but the mayor decides to keep going. “And comrade, if you had two cows, wouldn’t you also happily donate one back to the people?” At this the farmer hesitates and with a dismayed look says, “No, I wouldn’t.” Puzzled, the mayor asks him, “But if you would donate an apartment and a car, why wouldn’t you donate a cow?”
The farmer looks back at him and says, “Well, I actually have two cows…”
When I started off as a young professional in the fund management industry, in 1998, prior to the emerging mar-ket crash, I was chatting to a senior fund manager at an evening function. We were chatting about the mar-ket, the valuations on the night. He confided in me that he had liquidated all his investments as he was con-cerned about the market valuations. I asked him if he had sold out his clients’ positions and he confided in me that he had not.
I was shocked that what he did for himself he did not do for his clients. When the market corrected, he boasted that he was out of the market. New to fund management, I was disturbed and uncomfortable with the view taken.
At Platinum Portfolios I am confident in our process and philosophy. Our shareholders and directors have all their savings invested in the Platinum Portfolios solutions. We have all our money invested alongside our clients’ investments. When our funds go up, we share in the pleasure of the returns and when the market goes down, we feel the same pain as our clients.
It is vitally important when investing your money with a fund manager, that client and manager interests are the same. The long-term results will be better, and the risk taking will be in the best interests of the clients.
This article first appeared in the Platinum Portfolios Q3 of 2023 newsletter.
