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12 Days of Christmas
VALUES WORTH SHARING
The illustrations in this publication are part of the Princely Collections. For more than 400 years, the Princes of Liechtenstein have been passionate art collectors. The Princely Collections include key works of European art stretching over five centuries and are now among the world’s major private art collections. The notion of promoting fine arts for the general good enjoyed its greatest popularity during the Baroque period. The House of Liechtenstein has
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Detail from “A Dutch village in winter”, Joos de Momper (1564-1635)
© LIECHTENSTEIN. The Princely Collections, Vaduz–Vienna
A look inside the Princely Collections
On the first day of Christmas
Dear LGT Vestra,
My true love has been sending presents to me every day for
the last twelve days. Each day I am given all the gifts that have
been given to me the days before along with a new one.
Each day it multiplies and accumulates. Today is the twelfth
day of Christmas and my true love has sent me:
Twelve drummers drumming, eleven pipers piping, ten ladies
dancing, nine Lords a-leaping, eight maids a-milking, seven
swans a-swimming, six geese a-laying, five gold rings,
four calling birds, three French hens, two turtle doves and
a partridge in a pear tree
Whilst not wishing to discourage such generosity of heart,
I am somewhat overwhelmed. Please could you advise on
how to best manage these investments?
Kind regards,
Your client
Jan
van
Kes
sel,
det
ail f
rom
“Tw
o tr
app
e-lik
e b
ird
s th
row
sal
aman
der
s in
to t
he
fire
”, (1
641
-16
80)
On the first day of Christmas, my true love gave to me a partridge in a pear tree.
3
An
dre
a Pr
oca
ccin
i, d
etai
l fro
m ”
Thre
e an
gel
s m
akin
g m
usi
c“,
bef
ore
172
0
Dear client,
Clearly you have a very devoted admirer who wishes to
provide for your future. I can see a balance of gifts in your
portfolio, however, the cumulative nature of these gives me
concern for your true love’s ability to keep you in the style
to which you may become accustomed. How should one
interpret gifts such as a partridge in a pear tree, gold rings
and drummers drumming? They seem to be providing for
your future with food, entertainment, political influence and
defence. Sadly, however, I believe your true love to be of a
frivolous, old fashioned and somewhat foolish nature. If your
wish is to secure your future, I recommend you steer your true
love towards more conventional financial investments to best
provide for your life together. We would be more than happy
to advise on this matter.
On the second day of Christmas, my true love gave to me two turtle doves.
In the long term, a positive cash flow is the key to happiness.
As Dicken’s character Mr Micawber said, “Annual income
twenty pounds, annual expenditure nineteen [pounds]
nineteen [shillings] and six [pence], result happiness.
Annual income twenty pounds, annual expenditure twenty
pounds ought and six, result misery”.1 I fear without proper
investment, these gifts will result in misery.
Partridges, turtle doves and calling birds could make a fine
feast in theory. However, turtle doves and most calling birds
are protected by law and I believe partridges to be worth
more alive than dead. Pears belong to a healthy food group,
but ingredients for a well-rounded diet seem to be missing.
Goose eggs would make a decent omelette and a roast
goose would provide for a more traditional Christmas. Whilst
providing food for the short term, there is little here to provide
a long-term income.
Fran
z W
ern
er T
amm
, d
etai
l fro
m ”
Flo
wer
s, F
ruit
an
d Po
ult
ry“,
170
7
On the third day of Christmas, my true love gave to me three French hens.
1 Charles Dickens, David Copperfield
5
Jan
van
Kes
sel,
det
ail f
rom
“V
ario
us
bir
ds
and
a p
hea
sant
on
a tr
ee”,
(16
41-1
68
0)
With 40 maids a-milking, assuming they come with cows,
would provide plenty of milk to drink, with enough left over
to make butter and cheese. Sadly, the dairy industry is a hard
place to make money at the best of times and manual milking
is time consuming, old fashioned and expensive. I suggest
you investigate an automated milking parlour and find
alternative postings for the maids if you want to keep your
cash flow positive.
Since all mute swans are owned by the Queen, except those
owned by the Dyers or Vintners livery companies, these gifts
seem purely ornamental. You may want to offload them to St
John’s College Cambridge who have Her Majesty’s permission
to eat swan. Yet again, the power to generate cash from this
gift appears limited.
On the fourth day of Christmas, my true love gave to me four calling birds.
Pipes and drums, ladies dancing and Lords leaping sound like a
wild party. However, thirty-six ladies, thirty Lords, twenty two
pipers, twelve drummers and not forgetting the forty maids,
with all that activity, will be hungry. The food provided will
not last long. Lords, when not leaping may give you political
influence, but remember that the hereditary peers no longer
have an automatic right to sit in the House of Lords. You will
need to examine their credentials to see if they are worth
keeping. Pipes and drums are traditionally associated with the
armed forces, perhaps your true love is looking to protect you?
Nonetheless, these will be expensive to maintain.
One gold ring could signify an honourable intent but what to
do with forty of them? Rising interest rates and the political
stability that your Lords may provide, do count against
investment in gold. I therefore suggest selling all but one of
the rings. This should allow you to raise the cash you will
need to maintain the other gifts that you have been landed
with so generously.
Du
tch
mas
ter,
det
ail f
rom
”Po
rtra
it o
f a
man
in t
he
serv
ice
of t
he
Hab
sbu
rgs“
, c.
152
0
On the fifth day of Christmas, my true love gave to me five gold rings.
7
Jan
van
Kes
sel,
det
ail f
rom
“Sw
ans
and
oth
er b
ird
s in
ree
d”,
(16
41-1
68
0)
My chief concern, however, is your true love’s desire for
cumulative giving. Your true love has already provided you
with three hundred and sixty four gifts, enough for every day
next year bar one. If by any chance he continued to compound
these gifts for another week, he will have given you one
hundred Lords, ninety-nine ladies, ninety six maids and one
hundred and ninety five strong band of pipers and drummers.
Feeding all of these mouths is likely to bankrupt you, if it has
not already bankrupted your true love. Your cash flow will be
alarmingly negative.
On the sixth day of Christmas, my true love gave to me six geese a-laying.
Compounding has surprising results. Let us not forget the
folktale of the man who, when offered a reward, asked for a
grain of rice on the first day and for it to be doubled each day
for a month. His ruler thought this a cheap reward and after a
week had only given away 127 grains of rice. However, at the
end of the month he realised his foolishness when the granary
was empty and it had cost him over two billion grains. When it
comes to compounding, it is important to be on the right side
of the deal.
Jan
van
Kes
sel,
det
ail f
rom
“Sw
ans
and
oth
er b
ird
s in
ree
d”,
(16
41-1
68
0)
On the seventh day of Christmas, my true love gave to me seven swans a-swimming.
9
Pete
r Fe
nd
i, ”
The
Cau
tio
us
Parl
ou
rmai
d“ 1
83
4
Rather than pipers, drummers, Lords and maids who incur
costs and have finite resources, I suggest you request a longer
lasting way to provide for your future. A portfolio of equities
would be a good starting point. A single equity will allow
you to participate in the profits of the work of many people
over an indefinite period of time. If you reinvest the profit, a
gain of just 7% each year will double your money in ten years.
Single companies can be risky, so to mitigate this I recommend
a diversified portfolio of such investments. Spreading the
investment between companies reduces risks, but I should
warn you that like Lords leaping, equity markets alone would
not provide you a smooth sail. If you want to sleep easily at
night, a more diversified approach is appropriate. However
you go about it, this compounding will work in your favour
rather than against you.
On the eighth day of Christmas, my true love gave to me eight maids a-milking.
Whilst a lovely gesture, the gifts you are receiving look rather
19th century. When we advise your true love, we will have to
bring him into the 21st century. As we have already noted,
hereditary Lords no longer have political power. At times
political power seems to be vested more in the Internet than
parliamentary debate. In France, Emmanuel Macron forged a
political party on the Internet and rose to be President. In the
United States, a 280-character tweet by President Trump has
moved markets. It is not just politics that are changing; our
whole way of life and the way we do business has changed.
We now shop online rather than on the high street. The
milking maids may find out, they can be replaced by machines.
Companies that do not take advantage of these advancements
may fail altogether. Investors need to be aware of these
changes in technology and to pick companies that benefit
from technological change rather than suffer from it.
Jan
Bo
eckh
ors
t, d
etai
l fro
m ”
The
Five
Fo
olis
h V
irg
ins“
, m
id-1
7th
cent
ury
On the ninth day of Christmas, my true love gave to me nine ladies dancing.
11
Pete
r Pa
ul R
ub
ens,
det
ail f
rom
“Po
rtra
it o
f A
lber
t an
d N
iko
lau
s Ru
ben
s”,
c. 1
626
/27
Pipes and drums were once used to inspire bravery and
discipline at times of war. As recently as D-Day in 1944,
Lord Lovat landed his commandos to the strains of his
personal piper Bill Millin. Your gift of pipes and drums is
generous yet antiquated; today warfare is often fought
remotely using drones and internet sabotage, thus the
need for pipers and drums has gone. The power of weapons
is such that a conventional war between super powers is
unthinkable. Perhaps a laptop with top-class virus protection
and enhanced security would be better.
On the tenth day of Christmas, my true love gave to me ten lords a-leaping.
Overall, the gifts you have received indicate a true, although
perhaps misguided, love. When it comes to investment, we
look for positive cash flows. Presently, investment markets are
volatile and day-to-day valuations vary enormously. However,
when investment prices fall we can comfort ourselves with
a continuing positive cash flow and the compounding of
these returns adds to their attraction. When banks pay low
interest rates and the bond markets pay little more, we turn
our thoughts to the equity market. When it comes to tradition,
previously we invested in bonds for income and equity for
growth. In recent times, this has reversed. The positive cash
flows for your long-term future are more likely to come from a
good equity portfolio than “a partridge in a pear tree”.
We would be happy to help your true love select some sound
investments for future gifts.
Wishing you and yours a happy holiday season and a
prosperous new year.
Sincerely,
Jonathan Marriott
Chief Investment Officer, LGT VestraA
bra
ham
Blo
emae
rt,
det
ail f
rom
”M
ercu
ry,
Arg
us
and
Io“,
16
45
On the eleventh day of Christmas, my true love gave to me eleven pipers piping.
13
Ant
ho
nie
Pal
amed
esz,
det
ail f
rom
”G
uar
dro
om
“, 1
64
8
On the twelfth day of Christmas, my true love gave to me:
twelve drummers drumming, eleven pipers piping,
ten ladies dancing, nine Lords a-leaping,
eight maids a-milking, seven swans a-swimming,
six geese a-laying, five gold rings,
four calling birds, three French hens,
two turtle doves and a partridge in a pear tree.
On the twelfth day of Christmas, my true love gave to me twelve drummers drumming.
14
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