There are some fund names which can just grab you, and today’s launch of the Fat Prophets Smartfund was one said fund. Forget the Smartfund bit, it’s the Fat Prophets that grabs you. The research and fund management group was established in America in 2000 and launched its British arm in 2003. To fit alongside its Prophet the group has its 10 Commandments:
1. Thou shalt not pay ridiculously high prices for stocks because overvalued companies always fall back to earth!
2. Thou shalt pay close attention to charts when making decisions – a picture can be worth more than a thousand words!
3. Thou shalt not get caught up in the latest stock market fad with stock market tips. Every fad ends, and they ALL end the same way…badly!
4. Thou shalt not follow the crowd – when it comes to investment, inevitably the crowd is ALWAYS wrong.
5. Thou shalt be cautious when investing borrowed money. Borrowings must be repaid in full whereas investments can fluctuate in value.
6. Thou shalt carefully consider a company’s downside risk before investing. Preservation of capital is just as important as trying to make a fat profit.
7. Thou shalt be patient when investing. Waiting for the right time to invest and exercising patience when investing is critical in the stock market.
8. Thou shalt be disciplined and cut losses when necessary. Hoping the stock market will bounce back often leads to ruin.
9. Thou shalt buy straw hats in winter – what the stock market shuns today is often embraced tomorrow!
10. Thou shalt be honest with thyself. Admitting investment research mistakes is imperative in share markets.
The “Fat” side of the name is self evident, the group intends to make its investors investments as “FAT as possible”. For once being fat is definitely better than being thin.