Adam Parry – Time for a DVD day?

Monday 19th Oct 2020|London

Now let me be perfectly frank here… I know that the first lockdown in March must have been hell for those living in tower blocks and in the middle of a crowded city. But out here in the sticks it was, to be honest, an absolute joy.

I could go out for long walks in the country. Practice my cricket and golf in the back garden. Develop my menu for a pop-up venture in the autumn, which included plenty of dishes cooked over charcoal on the Big Green Egg. There was a sourdough loaf cooked fresh in the oven every morning (for my – sourdough starter recipe see the end of this drivel) and we even got a couple of hours lie-in every day thanks to Mrs P shirking from home. Bliss.

But now the autumn is very much with us and it is increasingly apparent that we are hurtling irretrievably into another full lockdown scenario in the UK and indeed across much of the globe as virus cases rise aggressively.

And this time it could be far less than heavenly, even in this rural utopia. For a start, there most certainly will not be any pop-ups anytime soon. Secondly, the days are drawing in rapidly and it will be dark at 4pm in a couple of weeks, which is always a touch depressing. And thirdly the weather is already deteriorating. October 3, for example, was the wettest day since records began in the UK.

So what to do with ourselves? Well, long country walks are still on, but when the weather closes in and prevents even that, may I suggest a good, old-fashioned DVD day.

You could do all nine Star Wars. Or eight Harry Potters. Six Jurassic Parks, or maybe four Indiana Jones? On a filthy day last week, I decided to dig out some films about the financial markets.

I started off with Oliver Stone’s 1987 masterpiece on eighties greed and avarice, Wall Street. Excellent stuff and it took me back to the mid-90’s when I was trading short-dated European government bonds. One futures broker on the LIIFE floor would always whisper down the line when he had a fund sniffing round the offer “Blue Horseshoe loves Sep Swissy”.

Once Buddy Fox had been led from the trading floor in tears, I turned to another reprobate who was a lot closer to my own heart.

In August 1985, I decided to take a year off before heading up to Edinburgh University. And in order to earn some money, I went into the City and secured a position at one of the most prestigious merchant banks in the Square Mile.

Baring Bros and Co had been formed in 1762 and counted the Queen and Elton John as customers and was as old school as they come. Even a lowly jubb like me – who was employed to tear pieces of paper in half and play cricket – was furnished with a three course luncheon washed down with a decent claret every day.

And then a mere ten years later it was gone. Brought down by a Watford boy called Nick Leeson punting on the Nikkei on the Simex exchange. I had left by that time, but my then wife was still at the bank, so Leeson’s actions still directly affected me. Four years later, the film Rogue Trader was released starring Ewan McGregor and Anna Friel. Well worth a watch, even if only to see how not to run a risk management department, but that is another story.

Next up I stayed in the 1990’s for Martin Scorcese’s Wolf of Wall Street. A story of broker excess if ever there was one. Now, of course, those of us trading the markets a quarter of a century ago did get up to no good on a few occasions in a similar – if not quite so extreme way – as Jordan Belfort and his Stratton Oakmont chums. Many of the stories from those times would be less than suitable for a family blog like this, but a couple might raise a smile.

First there was the diminutive short-end trader who found himself donning a motorcycle helmet at a German beerfest in Finsbury Park one night, shortly before being hurled head-first down a slippery alley into some inflatable skittles. Then there was the 25 stone settlements clerk, aptly named the Big O. A game was developed whereby we would duct-tape the entirely willing O to his wheelie chair and push him toward the far end wall of the trading floor over the lino. The trader that got the O closest to the wall without hitting would scoop the pot – which could be as much as £100. The sport was known as O curling.

Now the Wolf is a long, old film and is best enjoyed with a glass in hand. So the next day I finished off my viewing experience in the cold light of day with The Big Short. This 2015 effort based on Liars Pokers Michael Lewis’ 2010 book tells the story of how a few smart fund managers realised that the housing market was built on a massive pillar of sand, which in hindsight given the events of 2007 and 2008, was obvious. It features several cameo appearances with celebrities trying to break down some of the financial jargon.

The most memorable was probably The Wolf’s female lead Margot Robbie lying in a bubble bath, sipping a glass of champagne and explaining sub-prime loans and why these new mortgage bonds were so sought after, why things started to go wrong and the definition of sub-prime bonds.

Which brings me neatly onto today’s topic. Having spent most of the last three years behind the hobs, some new types of investments have passed me by. As ever, the investment community is always on the look-out for the next big thing. Nothing has changed much since Lewis Ranieri and co came up with the mortgage market at Salomon’s in the 1980’s.

So, I thought I’d take a quick butchers at the instruments that are going to make everybody rich in the COVID-20’s – as I’m sure this decade will be dubbed.

Firstly we have Environmental, Social and Governance. Or ESG for short. ESG refers to three key factors when measuring the sustainability and ethical impact of an investment. ESG factors are a subset of non-financial performance indicators which include ethical, sustainable and corporate government issues. For example, a company will have systems in place to ensure accountability and managing its carbon footprint.

All of which is very worthy in these Greta Thunberg inspired times. And there are now loads of ESG funds looking to entice willing investors with that very worthiness.

Now one would hope that these funds will not follow the route of the mortgage bond market, but as we should all know by watching those films above, when it comes to the rewards to be accrued from the financial markets, there are always some that are ready, willing and able to bend the rules.

A very interesting recent investor’s letter from Bronte Capital’s Amalthea Fund compared some of the Gold mine scams that worked through Facebook a few years ago and targeted just – or just about to – retired people. Once their marks had been hooked, potential investors were taken through several otherwise invisible websites before ending up investing in various gold mining companies and subsequently being fleeced. The letter went on to describe how ESG funds could be used in a similar fashion.

Now that may be very much a worst case scenario, but the potential to dupe investors is definitely there. And therefore, it would be prudent to come up with a pseudo ratings agency to monitor these ESG funds.

And that is precisely what research management software provider Mackey RMS are trying to do as they launch ESG Scorecards, which is a toolkit to improve investment selection, monitoring and reporting in ESG portfolios. Let us hope that these scorecards provide a far more accurate picture of the health of a fund than the ratings agencies did in regard of Sub-Prime paper.

ESG at least makes some sense from both an environmental and investing perspective. The second instrument that is currently en-vogue makes little sense to me at all.

This is known as Special Purpose Acqusition Companies, or SPACs for short.  These things raise money from investors with the aim of finding a private company to buy. If the sponsors fail to do that within a certain period, the SPAC is dissolved and the money returned to the shareholders.

Eh? As far as I’m concerned, the only winner here are the syndicate desks of the investment banks who will pocket the fees to underwrite the SPAC very happily indeed. The FT’s due diligence team has done a thorough investigation into these – – and guess what? Most of these SPACs do very poorly in the long term. Quelle surprise.

So here is that recipe for the sourdough starter:

Day 1: Mix 20g rye flour with 20g water in a bowl and then ad 5g clear honey. Cover with a clean cloth and leave for 24 hrs in a warm place. If it curdles, start again

Day 2: Bubbles should have formed on the surface. In a bigger bowl mix 40g rye flour, 40g water and 5g honey. Stir in mix from previous day. Re-cover with a cloth and leave for 24 hrs.

Day 3: It should now be bubbling noticeably. In another bigger bowl mix 80g rye flour and 80g water and stir in the previous day’s mix. Cover with a clean cloth and leave to ferment for 24hrs.

Day 4: To the day 3 mix add 100g plain flour and 100g water. YOUR STARTER IS NOW READY. Store in an airtight glass jar and it will keep in the fridge for months.

Use it to make fantastic bread or make a pizza to stick in your Ooni on a rainy day. Crack open a bottle of Rioja and sit down to enjoy your own DVD day to pass the time.

Have a great week.

The Week Ahead:  



  • 20/10 Housing starts and building permits
  • 21/10 Jobless claims; Existing home sales; Kansas City Fed
  • 22/10 PMI’s


  • 20/10 Spanish PPI
  • 22/10 German GfK consumer confidence; Area-wide Consumer Confidence
  • 23/10 PMI’s

Central Banks:

  • Fed Speakers:
    • 19/10: Williams, Clarida, Kashkari,Bostic, Harker.
    • 20/10: Quarles, Evans.
    • 21/10: Mester, Kashkari, Kaplan, Beige Book.
  • ECB: 19/10: Lagarde speaks at congress of the Regions de France
  • BoE: 22/10: Haldane at Rebuilding Macroeconomics Understanding Macroeconomics 3rd Annual Conference.

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