As an analyst, I often base my investment decisions on chart patterns, moving averages or market trends. It dawned on me after another date last week that my methodologies could be useful in analysing another volatile market: London’s single men. But just how much, I asked, do these guys resemble financial instruments?
I started off my comparisons with Mr Predictable as gold: only desirable in times of war, invasion, looting or major economic crisis. Or if I get terribly fat. Then there was Mr Arrogant, the real estate bubble, with his ego spiralling ever upwards like the over-inflated house price index before the crunch.
Which brings us to Mr Too-Good-To-Be-True. Where you have housing bubbles, you also have subprime “teaser” loans facilitating them. These instruments start off charismatic, asking for no down payment while giving lots upfront, but within a year or two turn into demons – blood-sucking, needy, with quadrupling interest rate liabilities which, if you’re not careful, will cause your foreclosure.
The beauty of options is that they convey the right, but not the obligation, to enter into a rendezvous at some future exercise date. One of my favourites is Mr 007, the exotic option. Slick and sophisticated, the investment is notoriously fickle and prone to short maturities. The odds of this gamble turning into a stable relationship are low, but you can enjoy the ride in the Ferrari while it lasts.
Of course, those ladies ready to take on the most liquid financial market could dabble in foreign exchange currency products, aka Mr Married. This market is unique for several factors, notably its large number of players, its geographical dispersion and its low margins of profit for us girls. There is no “inside information” on the FX markets and as you rack your brain trying to decipher why your latest speculation hasn’t booked that trip to Barbados yet, it’s not because of fluctuations in interest rates, but because they have those hidden trading fees attached – the wife and kids.
I found short-selling loads of out-of-the-money options a profitable strategy – like getting taken for loads of dinners by guys you don’t give a hoot about. This strategy pays off 99 per cent of the time. But when that one option in 100 becomes exercisable, and breaks your heart, he wipes out all the gains.