"What do you mean it's the end of the party?" asked the chairman of the improbably-sized investment company Prandeamus Asset Management when I bumped into him this week at the launch of Gervais Williams's new book.
"I've only had one glass." "That's not what I said," I replied. "I was observing the two speeches we heard - and indeed the tone of the book - were in keeping with the end-of-the-party theme of our recent chats."
"Ah," said the chairman. "I knew there was a reason I stopped listening. I thought we cleared this up last week - the FCA's Asset Management Market Study is not the end of the industry or even the death knell for anything that isn't passive. It is simple the chrysalis of opportunity from which the better active players will emerge like giant killer butterflies - at which point we are going to party like Prince was still alive."
"Crikey," I said. "Are you sure you've only had one glass? And, if so, what was in it? And it's sweet that you count Prando's among the ranks of better active managers and thus a potential killer butterfly. Still, I think my point is still relevant - the Market Study was like the FCA switching on the lights and calling ‘time' on the fun the asset management sector has been having over the last two or three decades.
"And now we have just heard both Mr Williams and financial commentator royalty and the writer of the book's foreword Merryn Somerset Webb discussing how something very similar is happening to globalisation as chunks of the population realise that, while it may have worked out very well for the world in aggregate, very little of the gravy has ended up on their individual plates.
"As such, the thesis of The Retreat of Globalisation is that people are going to have to change their investment strategies more over the next three years than they have over the last 30 if they want to be one of the happy few who survive "peak globalisation" with their assets intact." "Oh … is that what it's about?" said the chairman vaguely. "I thought it was a book on botany or horticulture."
"I'm sorry?" I said. "Botany or horticulture," the chairman repeated. "I admit I've only dipped in a couple of times - just while you were yabbering on - but, each time, young Gervais has been talking about plants. Look - page 3: ‘It will be like moving from the vigour of a rainforest to the seasonal cycles of a temperate woodland. The corporate world will once again become a more even mix of growth and decay.'
"For its part, chapter five is actually called ‘The balance between growth and decay' and then, here on page 107, we have a passage headed ‘Nutrients in the forest', which says: "As mature trees age, they rot as their vitality ebbs away. In time, it is the collapse of ancient trees that starts the process of bringing through the more vigorous, by releasing nutrients for subsequent generations'.
"And so on and so forth. Do you think he's making a play to front the next series of Planet Earth?" "I think he's just being very consistent with his use of metaphor," I shrugged. "That's dangerous," sighed the chairman. "We're not very good on metaphor in the wonderful world of investment." "So says Mr Giant Killer Butterfly," I said, raising an eyebrow. "I think that rather proves my point," he replied.
"Speaking of chapter titles," I said, "I enjoyed the nod to David Bowie in chapter eight being called ‘Turn and face the change'." "For sure," nodded the chairman. "And speaking of ‘change', didn't you and young Merryn used to be contemporaries?" "We were both editors of consumer-facing financial magazines 10 or 15 years ago," I agreed. "But it's fair to say she was a little bit higher up the food chain than me."
"And now she's a whole lot higher up the food chain than you, isn't she?" the chairman pointedly observed. "And?" I said defensively. "Tell you what - you stop implying my golden future now lies behind me and I'll stop suggesting the Prando's style of investing has no future at all. Deal?"