It will also be true that for some time the great wizards of finance no longer disdain to tell their life and their miracles, but "Men and money“, the agile and pleasant book published by Rizzoli and written by Paul Basil, the founder and until a few days ago the number one of Kairos, one of the most innovative and successful realities of the Italian financial industry of the last twenty years, is anything but self-celebration for its own sake. As the subtitle of the essay clearly explains, that of Basil is the story of a life that aims to reveal the secrets to successful investing.
There were many ways to advise savers to enter the mysterious world of finance without making mistakes and chasing chimeras, but the one chosen by Basilico - intertwining with the story of a life lived as a person even before as a money manager of great intelligence and great success – it is never trivial and much less obvious. On the contrary, it is full of surprises: Basilico even confesses that in his second life he would like to be a journalist and does not hide the anxieties and fears for the very fate of Kairos after the unexpected bankruptcy of Lehman and the Great Crisis. Also unforgettable is the sincerity with which he wrote to his clients to confess that he, like many others, had understood nothing of the disappointing 2018 on the markets.
Above all, the essay has the merit of recounting the crucial passages of his life and the fundamental lessons drawn from his experience in the world of finance, not only with elegance and sobriety but with great passion and absolute clarity with the stated aim of making himself understood and addressing not to financial investment professionals but to ordinary people and simple savers. It is useless to lie: "Money - the first chapter is not by chance entitled - is important: get to know it".
Basilico, in his life as a finance leader, has seen it all, from the take-off of the Italian stock exchange to the many bubbles that accompanied the markets, from the bankruptcy of Lehman to Madoff's scam up to the danger that the crisis would also overwhelm the euro if there hadn't been Mario Draghi's "whatever it takes", but wonders why Italians, knowing everything about football and politics and having in more recent years cultivated in-depth knowledge of health and physical well-being or nutrition, however, they know little about money, finance and savings management. Yet, with a relatively modest effort, they could easily honestly find their way to a better and more comfortable life. But all this is not accidental, because for generations the wealthiest Italians have been used to investing only in real estate or in government bonds, obtaining moderate returns and almost completely ignoring the Stock Exchange.
“Fortunately – notes Basilico – things are changing”, but too slowly. It's not just a question of technical knowledge, which is certainly useful but not enough. Actually to "be successful with money - says Basilico - you need a balanced person more than a mathematical genius". A balanced person who does not delude himself that he has understood everything and mastered finance on his own, who has a good knowledge of the psychology of human behavior, of the main rules of the economy and of the world of investments and the financial industry and who always on the bedside table a copy of the Odyssey. Of Homer's book? Yes, exactly that, because “when it comes to money, we have only one possibility of salvation: that of tie us hand and foot like Ulysses to the mast of the ship to resist the song of the Sirens” and do not fall into temptation by allowing yourself to be seduced either by the alleged financial oracles or by the illusions of the salons.
Actually, according to Basil, there are not many rules for cultivating one's financial well-being, "there are only ten and they are simple, like all real things": a lot diversification, especially for Italian investors who are dealing with a stock market that is too small, more space for actions than to bonds, always keep a little liquid assets, do not allocate more than 10% to trading of your assets, give yourself a time horizon of medium-long term and so on. You have to know the basic rules but without falling into another one dangerous trap, which is that of manage their own financial investments instead of relying on proven professionals.
In front of the frightening volatility of the financial markets, which for even short periods can be unpredictable and detached from the rationality of numbers and which today are characterized by exchanges that more than half come from algorithmic systems or indexed funds, there is no hope of anticipating or managing market swings. Here because a good advisor is essential. But how to choose it? The basic knowledge of the psychology of behavior and of the fundamentals of economics and finance are used to make the right choice without blank proxies. “Sharing the risk and return of your results” by consultants or financial promoters is the first rule to keep in mind. And if this professional invests like you, even better. But, “remember then that a consultant is good not only for what makes you gain, but above all for what prevents you from losing“. Sacrosanct. It is truly true that Basilico's beautiful book is not only a useful handbook of financial rules but a lesson in great wisdom. To be read every night together with the Odyssey.
