Vincent’s Blog: What do dramatic weight loss and dramatic investment gains have in common?

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The winter months in the South of France are mild as well as quiet and it is a nice escape from the cold weather in New York. The coast is beautifully rugged and easy to travel this time of the year. We are planning to visit a few Family Offices; these are companies, which manage the wealth of either a single or multiple families. The Portfolio Managers of Family Offices have plenty of choices to put their assets to work, but mostly invest in Real Estate, Bonds and Equities. Within each of these asset groups the choices of investment managers are so abundant it makes sense for them to set restrictions, otherwise they would look like a bewildered hungry consumer in front of 100+ breakfast cereal products in a supermarket.

We are in Monaco, a small principality steeped on the rocks of the Cote d’Azur and come across… well let’s call him Giovanni. Giovanni is a Portfolio Manager at a Family Office of an old European Family. He is looking for investment managers who behave like Formula One race drivers capable of delivering dramatic performances and due diligence is conducted by him playing backgammon with a prospective manager while visiting the manager’s home. It is a rather funky way to put your family capital at work but hey… stranger things have worked, right? However, anyone who has watched the movie Senna, about a unique Formula One racing champion, and has read the story of Long-Term Capital Management, about an epic blow-up of a hedge fund run by geniuses, knows that dramatic performances often end very dramatically.

I am digging into eggs benedict & fries at Bouchon, a brasserie on avenue Princesse Grace and think of how to spoil the calories of this saturating brunch with friends… I have tried to be in control of my intake but that is very hard when you love good food. Working out is great but takes time and discipline, something that never seems to gain the same level of consistency as having lunch & dinner every single day. Maybe I should try a new dramatic weight loss diet and go nuts for a while.

But I know better because weight loss diets promising an instant big weight loss never work in the long run. Do you know that the average weight of an adult living in our developed world has increased with 25 pounds (11 kilos) since 1960? Does anybody count this as inflation? Do you know the combination of fat and sugar is extremely addictive and hits your brain like a cluster bomb? Do you know we process a lot of new foods combining fat and sugar to feed our growing addiction? Do you know your brain releases dopamine, a chemical that makes you feel happy? Yes, it is the same stuff that is being released when you consume fat and sugar or Prozac, Zoloft, Celexa, Effexor or have a runner’s high, or win a Formula One race or have a dramatic positive investment result.

With pharmaceuticals we now seem to be able to control our happiness and soon also our weight. There are many new weight loss drugs being tested and some are in the process of making it to the general public. So get ready to invest in them and eat whatever you want. However, realize that there are no shortcuts in life. It is better to dose your weight loss and investment gains in small increments. Dramatic weight loss and dramatic performances are both rarely sustainable… with or without drugs.