Cluster Family Office Blog

Marriage and Heritage (2)

It appeared a few days ago the news Curious, though not surprising, that the octogenarian George Soros had been indicted by a 28-year-old Brazilian soap opera actress, Adriana Ferreyr. It seems that the billionaire, who recently retired as a fund manager, allegedly promised the actress to buy her a $2m Manhattan flat. He did in fact buy it, but with such misfortune for Adriana that their relationship broke down immediately afterwards. Her lawyers are now claiming 50M to compensate for the displeasure, moral damage, harassment and I don't know how many other things.

It sounds like the familiar repetition of mixing stupidity and wealth with beauty and liveliness. And it probably is. So, to distract us from so much turbulence in the markets and to lighten and brighten up the summer, we offer you once again the article entitled Marriage and Wealth, which fits the case of Soros and Adriana, and also so many and so many cases of investors who think they see love in the libidinous eyes of their bankers. Now you will see why. Some of you will already know it because it is a publication of an advertisement in the US business press. I have taken the liberty of polishing the English translation a little. The ad in question reads as follows:

“I am a beautiful girl, wonderfully beautiful, 25 years old. I am well built and classy. I want to marry someone who earns at least half a million dollars a year. Are there any men among the readers of this website who earn $500,000 or more? Maybe the wives of those who earn that can give me some advice.

I've been the girlfriend of men who make 200-250k, but I can't go above that and 250k isn't going to make me live on Central Park West. I know a woman, from my yoga class, who married a banker and lives in Tribeca, yet she is not as beautiful as me, nor is she intelligent. So what is it that she did that I didn't do, and how can I get to her level?”

Rafaela S.

So much for a peculiar advertisement in a business newspaper, in the country where all this is possible. But pay attention to the response from a reader and wealthy investor:

“I read your query with great interest, thought carefully about your case and made an analysis of the situation. First of all, I am not wasting your time, as I earn more than 500,000 per year, and that said, I consider the facts as follows: Putting the roundabouts aside, what you are offering, seen from the perspective of a man like the one you are looking for, is simply a lousy deal. Here are the reasons: You provide the physical beauty and I provide the money. Clear proposition, without any between the lines. However, there is a problem: Your beauty will surely decline and one day it will end, and most likely my money will continue to grow, more and more.

So, in economic terms, you are a depreciating asset and I am a dividend-yielding asset. Not only do you suffer depreciation, but since depreciation is progressive, it always increases! To clarify further, you are 25 years old today and you will continue to be beautiful for the next 5/10 years, but always a little less each year, and suddenly if you compare yourself with a photo of today, you will see that you will already be old. This means that you are in a ‘bullish’ position today, at the ideal time to be sold, but not to be bought. To use Wall Street parlance, whoever has it today must have it in a ‘trading position’, and not in a ‘buy and hold’, which is what you are offering yourself for... Therefore, still in commercial terms, a marriage with you (which is a ‘buy and hold’) is not a good business in the medium/long term. However, renting it can be and, in social terms, it can be a reasonable business that we can think about and intend. I think that by certifying how ‘well-built, classy and wonderfully beautiful’ she is, I would like to do what is standard practice: I would like to have a ‘test drive...’ in order to finalise the possible transaction. I can make an appointment.

Jack Paul Henderson Investor.

Funny ad and funny response, no doubt. But let's go a little further in our reflection: let's extrapolate the rich/sexy girl relationship to that of investor/bank. Perhaps some stock market investors and, above all, their bank managers or the managers of the financial institutions with which they risk their money, have been thinking for months or years that the right decision is to marry this lady. In other words, to entrust their money to the manager so that he can do what he wants with it in the long term. Until the stormy disaster or the break-up of a relationship that is really only looking for quick sex and not a lasting love.

Perhaps investors think that those incipient wrinkles on their brand new bankers are about to disappear and that in the long run their wives will always gain in beauty, even though they may age in the short run. And it is quite possible that in that particular case they will one day, but perhaps their client will not live long enough and will spend his last years with a very unpleasant companion. But there are other ladies who can make us happier today, without having to wait for a long term that we may never know, and who will age just as well or better. Or perhaps our managers are only interested in keeping us as long as possible by repeatedly marrying and divorcing us in order to get unmentionable commissions on each of our new romantic dates, with their subsequent visits to the office of the matrimonial lawyers who will eagerly realise our munisvalues. Perhaps they will propose polygamy with as many “assets” as possible (as much as our wealth allows), rotating our hearts several times a year, regardless of whether the beauty of our conquests is bullish or bearish. Woe betide the poor heart that pays his girl according to the carnal pleasures she gives him. His heart will be short-lived... or he will find it increasingly difficult to climax with his ageing companion.

At most, our managers will join the bandwagon of the most Machiavellian marketing by charging success fees, i.e. depending on the amount of pleasure received. To do this, they will obviously provide us with a large number of candidates, assuming health risks, sentimental risks and unbridled and lustful costs of all kinds, and they will cross their fingers that on one of these dates, one of these candidates will satisfy us enough to achieve their established success fee. They don't care if in the multiple failures we take serious risks, they will try everything to get enough pleasure to collect their success fee, theirs, of course.

What is certain is that none of our managers will be concerned about our heart, but only about our body. However, just as in a marital relationship, in our assets we need a stable long-term relationship that can more than compensate for natural ageing with a relationship of Love, complicity, companionship and, in short, all the virtues of a stable partner with whom we can find Happiness. Why do managers call it Love when they really mean Sex? Even the lady and the Investor in the advert distinguish one thing perfectly from the other.

Well, sex has always been economically more profitable. But only when life smiles on us, when we are young, handsome and rich. That is to say, only in the short term, and the life of the Investor in capital letters is something else. If we follow the indications of these managers, we will surely end our investment life old, tired, sick, lonely and poor, very poor. When we talk about asset management, we must keep both concepts in mind: Love and Sex, in that order. Because if we focus only on the latter, we will have a very bad time in the medium or long term. But unfortunately, private banking and other asset managers focus exclusively on giving us a good time... or even a bad time. After all, that is of little importance to the macarons.

It is easier to look good as a lover than as a husband; because it is easier to be timely and witty once in a while than every day.

Honoré de Balzac (1799-1850)

Shall we help you search?